Happy Fifth Anniversary, GM Financial!
Happy Fifth Anniversary, GM Financial!
Published October 2015
GM Financial turned five on Oct. 1. As we pause to appreciate our current status as General Motors' captive lender, let's take a glance back to see how we got here and touch on what's ahead.
Setting the stage
Five years ago, the auto finance industry wasn't what it is today. It was 2010, much of North America was still limping through the aftermath of the Great Recession that had supposedly ended in 2009. Within the auto lending sector, the effects were palpable as many companies folded, unable to support themselves with little-to-no business coming in and a lack of bank securitizations in place to keep them propped up.
And yet, there were those that were able to weather the storm. One such lender, AmeriCredit, was even able to complete multi-million dollar securitizations at a time when banks weren't lending to anybody, even other banks. AmeriCredit, a traditionally subprime lender, saw its customer base wracked by the economic conditions, but thanks to its astute planning and foresight, remained in the same business pool that saw other lenders go under or get out entirely. This success during such a trying time did not go without notice.
Oct. 1, 2010, AmeriCredit was acquired by General Motors to serve as its finance arm while still offering lending products to dealers around the country. On that day, GM Financial was born.
"The strategy for GM Financial when GM purchased the company has evolved significantly over the last five years," said GM Financial President and CEO Dan Berce. "Originally we were going to be a niche provider for GM participating in subprime, leasing and commercial lending."
Immediately, GM Financial began broadening operations, beginning with the launch of a leasing platform just three months after the acquisition. That milestone was quickly followed by the acquisition of FinanciaLinx on April 1, 2011, which allowed GM Financial to launch a new Canadian lease program.
In May 2011, GM Financial grew substantially with the creation of the Commercial Lending department. Now, instead of lending to individual customers, GM Financial had the capability of lending to dealers themselves, helping them broaden inventory and expand their business. But the company's growth wasn't done.
On Nov. 21, 2012, GM Financial announced plans to acquire Ally Financial's international operations for $4.2 billion, and on April 1, 2013, the first phase of the global expansion officially began. Through a system of steady rollouts, GM Financial is now active in 18 countries, plus the U.S. and Canada, and has gained more than 2,000 IO team members operating across the globe.
In the summer of 2014, the company launched one of its most anticipated sectors, prime lending. The new area gave GM Financial the pivotal piece it needed to become a true captive finance company, something that wasn't even considered back in October 2010. "Our strategy has evolved to the point that GM Financial is now General Motors' full captive finance company, providing a full spectrum of products and services - loan and lease products as well as commercial products," explained Berce.
All things considered, GM Financial has experienced an enormous amount of growth in its first five years, and Berce knows what it took to make it happen. "The real key to our successful execution is the talents and efforts of our people. We've had the benefit of retaining our teams from five years ago and adding specific resources to supplement the skills we already have," he said. "Our organization is all about teamwork. Everyone in the company deserves credit and they should all feel proud of what we've accomplished."
Next up - More growth
"At the date of the purchase, we had earning assets of roughly $9 billion and as of our recent quarterly results we have increased our earning assets to $53 billion," Berce said. "Part of that growth is the addition of our International Operations, but the majority of the increase is the expansion of operations in the U.S. and Canada and we're not done. We expect to again double in size in the next three to five years."
Still, throughout all of the changes and expansion, Berce is well aware of where we've come from and what will continue to guide us in the future.
"The most important thing to me is that we've been able to maintain our culture despite our rapid growth and change in ownership," Berce concluded. "Our culture and our people are our biggest asset and maintaining this is the key to our future success."