GM takes charge of its branded F&I products

Published in Automotive News Oct. 29, 2014

General Motors is bringing the sales of its branded F&I products in-house, taking over responsibility from captive finance company GM Financial, in a move designed to give those sales a shot in the arm and get those products on more GM dealerships' radar.

“Looking at the business and the focus it needs, and the whole landscape, we determined in conjunction with GM Financial to have GM Customer Care and Aftersales be the sales force,” said Ken Mac, director of extended protection products for GM.

The change means a sales force dedicated exclusively to F&I products carrying the Buick, Cadillac, Chevrolet and GMC brands, he said. GM dealers learned of the change in a memo last week.

Slow start

GM also is expanding its offerings to include prepaid maintenance, lease wear-and-tear protection and other products, on top of the existing lineup of extended-service contracts, tire-and-wheel policies and Guaranteed Asset Protection, Mac said.

Last year, GM assigned GM Financial field representatives to introduce GM dealerships to the program as part of their contacts with dealers and dealership F&I teams. GM launched the F&I products with a pilot program in Ohio in May 2013. It planned a nationwide rollout by the end of 2013.

However, today, “just north of 20 percent” of GM’s roughly 4,300 U.S. franchised dealerships are signed up to sell the branded products, Mac told Automotive News on Tuesday.

He said GM Customer Care and Aftersales hopes to start improving sales penetration in the fourth quarter of this year and the first quarter of 2015. He said the new sales team also wants to help GM dealerships sell extended-service contracts in their service lanes.

‘Building up’

“We’re building up a great deal of people to sell to GM dealers exclusively. That will allow GM Financial not to worry about these products. They can devote their effort to becoming the full-force captive we need them to be,” Mac said.

GM Financial also is introducing new products, especially the nationwide rollout starting this year of prime-risk loans. GM Financial, in Fort Worth, Texas, also is trying to get more dealerships to sign up for commercial loans, including floorplanning.

Mac said the branded F&I products introduced last year ran into a tough market. “F&I products are ultracompetitive,” he said. “There are very formidable competitors out there who have been doing this for decades. Dealers need and deserve this attention and focus.”

Rival Ally

Former GM captive Ally Financial is at or near the head of the list of formidable competitors. That’s especially true since Ally retains the right to use the GM Protection Plan brand name. Ally’s license to use that brand name continues until November 2016, Mac said.

Ally, of Detroit, used to be known as the GM captive finance company GMAC. GM sold majority control of GMAC in 2006 but retained a minority share until December 2013.

“The message I’d like to get out is, we’re not waiting. We’re building what we believe is a world-class manufacturer-backed business,” Mac said. “Dealers really shouldn’t wait for the time when Ally no longer has GMPP for sale, because we’ve got some exciting things as a member of the GM family that you can’t get anywhere else.”

You can reach Jim Henry at autonews@crain.com

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