With six weeks to go before the launch of its Commercial Lending Services business, General Motors Financial has set some clear goals for the unit.
“It’s a de novo business, so it’ll progress slowly,” said GM Financial President and Chief Executive Dan Berce on a conference call with investors this morning. The ballpark estimate is 20% to 25% marketshare in two or three years ― a $5 billion-type number. “That’s something we’d like to shoot for,” he added.
GM’s commercial business will launch April 2, offering floorplan financing; capital, real estate and construction loans; floorplan insurance; and cash management programs to GM dealers in the U.S. and Canada.
In addition to outlining growth plans for the commercial unit, Berce mentioned on the call that GM Financial’s lease activity in Canada could outpace volume in the U.S.
“There’s a lot of opportunity in the Canadian market for us,” he said. “Banks aren’t able to do leasing in Canada.”
For now, GM Financial’s Canadian lease business is financed through a CA$600 million credit facility in Canada. As volume grows, the captive will consider financing the business through securitization. “I don’t see us needing to securitize that until at least the end of 2012,” Berce said.
Last year, GM Financial originated $987 million of leases and $5.1 billion of loans. The captive earned $386 million for 2011.
Comment by Frank Rauscher on February 17, 2012 at 5:50pm Sounds like they are going to be hiring a lot of new people.
They will need a lot for the goals which are ambitious. It will require top quality staff at premium salaries or else they will have "to buy" any new business or provide very loose commercial credit.
Good luck!
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