Captives see mixed results
DETROIT - The Big 3 captives had mixed results in the second quarter.
General Motors Acceptance Corp. had record second-quarter profits this year. An accounting change erased an improvement for rival Ford Motor Credit Co. Earnings fell more sharply for DaimlerChrysler Services.
GMAC earned $449 million in the second quarter compared with $395 million in the year-ago quarter. Positive effects included lower short-term interest rates, which lowered GMAC's borrowing costs an average of 5.9 percent compared with 6.56 percent a year ago.
Without a one-time accounting change, Ford Credit earned $399 million compared with $388 million a year earlier. The accounting change cut second-quarter earnings to $367 million.
At DaimlerChrysler Services, net income fell 14.7 percent to $98.3 million, at current exchange rates. Part of DCX's problem was a drop in heavy-truck demand in the United States.
Bank keeps Fla. auto business
COLUMBUS, Ohio - Huntington National Bank will continue to originate auto loans and leases from its offices in Tampa and Orlando, Fla., even though the bank announced earlier this month that it intends to sell its 139 Florida branch banks as part of a bigger restructuring. A buyer has not been identified. Huntington said as part of the proposed sale, it could sell off its $800 million worth of Florida-originated auto loans and leases.
The bank also will stop buying subprime auto loans and allow its $150 million subprime auto portfolio to run off. Mike McMennamin, CFO of parent company Huntington Bancshares Inc., said the bank will keep most of its $7 billion portfolio of auto loans and leases nationwide.
Nissan denies lending bias
NASHVILLE, Tenn. - Nissan Motor Acceptance Corp. denied renewed allegations that its lending policies led to racial discrimination in auto financing.
Betty and Robert Cason sued the captive finance company in 1998, claiming that allowing dealers to negotiate the final interest rate on loans in effect allowed dealers to charge black customers higher rates. Similar lawsuits have been filed against other captives.
A July 4 story in The New York Times highlighted a study on behalf of the plaintiffs of about 300,000 Nissan Motor Acceptance customers nationwide. The study seemed to support the original allegations that blacks on average pay higher rates, based on an earlier analysis of about 9,000 Tennessee customers.
A Nissan Motor Acceptance spokesman attacked the study's credibility and said the captive's credit decisions are based solely on risk. An April trial date has been set in U.S. District Court in Nashville.