Campbell said that GM's other brands, Buick, Cadillac and GMC, stand to gain from the AmeriCredit purchase, too. “Even for luxury brands, you have people who are stretching,” to afford a vehicle, he said.
Tom Waurishuk, general manager of White Plains Buick-GMC in White Plains, N.Y., says he's “real happy” about the AmeriCredit purchase.
“We have a very good relationship with GMAC (now Ally), but they're limited in what they can buy below a certain score. ... If you have somebody below a 620, they're going to go to another car like a Honda or Toyota. Toyota is especially aggressive,” Waurishuk says.
Getting more customers financed
Chevy dealer George Fritze, owner of Red River Motor Co. in Bossier City, La., says his dealership does business with both Ally and AmeriCredit, but he says he could sell more cars if he could get more customers financed.
“There are a lot of customers who want to buy and they can't because they can't get financed. That's frustrating every day for consumers, and it's frustrating every day for our salespeople,” Fritze says.
Chevrolet could feel the lack of subprime financing even more acutely as it rolls out new small cars such as the Chevy Cruze, set to go on sale in the fourth quarter; a new generation of the Chevy Aveo, due next year; and the even-smaller Chevy Spark, based on the Chevy Beat concept car, starting in 2012.
A 'core' finance unit
Last month GM said it will acquire AmeriCredit of Fort Worth, Texas, for about $3.5 billion. The deal is expected to close by the end of the fourth quarter. When announcing the deal, GM CEO Ed Whitacre said that AmeriCredit will form the core of a new GM captive finance company.
Eventually, GM expects AmeriCredit to become more of a full-service captive, moving into lower-risk segments and getting more heavily into leasing. From the start, though, AmeriCredit's strength and experience is subprime.
Carroll Smith, president of Monument Chevrolet in Pasadena, Texas, says his dealership doesn't do much subprime business, probably no more than eight or 10 cars a month. But, he says, every little bit helps. Smith represents southern Texas on the National Automobile Dealer Association board of directors.
“Long term, I don't think this (acquisition) is gong to supplant Ally or banks,” he says. “One of the missing pieces has been subprime.”