TOKYO - Starting in July, all new- and used-car loans issued at Mitsubishi dealerships will be put on the books of a joint venture set up by Merrill Lynch and Mitsubishi Motors Credit America.
Mitsubishi Motors Credit will continue to handle and own leases and dealer loans.
"The process will be transparent to the customer," says Rich Gilligan, CEO of Mitsubishi Motors North America Inc.
The joint venture is named MMCA Services LLC. By selling retail loans to
MMCA Services as soon as they are generated, Mitsubishi Motors Credit aims to "reduce its exposure to default risks."
Mitsubishi says it will provide marketing money to MMCA Services if necessary to offer "highly competitive sales financing products."
The venture will aim to raise the percentage of loans to Mitsubishi buyers that it handles "to the 50 percentile" range, he says. That would be up from the current "low 20s" handled by Mitsubishi Motors Credit, Gilligan says.
In addition, Mitsubishi Motors Credit will outsource its claims-management and call-center functions to reduce costs. As previously announced, that will result in the loss of about 300 jobs.