Ally's auto originations held flat in 2015

Ally CEO Jeffrey Brown: "We've been executing a very disciplined strategy since 2009."

Ally Financial Inc.’s 2015 auto loan and lease originations remained flat compared with the year earlier, but flat originations are fine with Ally.

“If you look over the past several years, the company has been originating roughly in the $40 billion range,” CEO Jeffrey Brown told Automotive News.

Ally doesn’t have a target for 2016. It’s focused on “keeping the machine running,” Brown said.

Originations likely will fall somewhere between $38 billion and $42 billion, and Brown says he’s comfortable with any result in that range.

Ally’s auto loan and lease originations grew 3 percent to $9.3 billion during the fourth quarter but remained at a flat $41 billion year over year, despite losing General Motors’ subvented lease business last year, the lender said in releasing its 2015 earnings on Tuesday.

In the fourth quarter, Ally’s net surged 49 percent to $263 million. In 2015, net rose 12 percent to $1.29 billion.

‘We won’t chase’

Ally originally forecast originations in the high $30 billions for 2015. In November, the company said it expected to exceed $40 billion.

“The most important goal is to take care of customers and dealer relationships and to continue our focus on diversifying franchises and our discipline on smart growth incentives,” Brown said.

“We won’t chase things. We’ve been executing a very disciplined strategy since 2009, which is don’t be too reliant on anyone and don’t have contracts drive your business,” he said.

Ally’s active dealer network increased 5 percent in 2015 to more than 17,500 dealers, the company said. As a part of that growth, Ally developed financing relationships with Mitsubishi, Aston Martin, McLaren and Beepi, an online car buying platform, in 2015. Brown told Automotive News that similar partnerships may be announced in the next few months.

Loan and lease originations from those relationships have been “fairly modest,” Brown said.

Mitsubishi, which originates the most Ally loans and leases out of the group, had $470 million to $500 million loan and lease originations in the second half of the year, Brown said.

Growth channel rises

Ally’s growth channel, which is made up of its non-GM and Chrysler franchised dealer clients, originated $12.7 billion in loans and leases in 2015, a 53 percent gain from 2014. Growth channel brands include Ford, Lincoln, Toyota, Lexus, Hyundai, Mitsubishi, Kia, Maserati, Nissan and Infiniti.

On average, Ally grew the channel by one contract per month per active dealer, Brown said.

Ally’s Chrysler originations also jumped in 2015, growing 41 percent to $9.6 billion. GM nonsubvented originations rose 21 percent to $15.2 billion.

Ally’s GM subvented loan and lease originations, however, plummeted 74 percent to $3.4 billion, reflecting GM’s moving its subvented lease business to GM Financial.

Brown expects the GM nonsubvented loans to be flat this year. “That goes to the strong connections we have with the GM dealer community. Dealers redirect more standard rate business to Ally,” Brown said.

More new, used business

Ally has stepped up its standard, or nonsubvented, new- and used-vehicle loan and lease originations. New retail standard loans and leases made up 47 percent of total loans and leases, vs. 34 percent a year earlier. Used-vehicle loans and leases made up 36 percent of originations in 2015, vs. 29 percent in 2014.

Additional used business was “something that we wanted, that we covet,” Brown said. “We really like the profitability of the used segment. Some of the subvented business went away, and we were conscious to cover some used business from our dealer network.”

Ally’s credit-tier mix changed slightly during 2015. Its nonprime lending segment inched up to 14 percent from 11 percent a year earlier, but Brown said the company still lends on the high end of subprime. Only 1 percent of Ally’s loans are to consumers with a credit score below 540.

You can reach Hannah Lutz at hlutz@crain.com

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