Ally Financial tapped to finance Fiat vehicles

AUBURN HILLS (AP) -- Chrysler Group LLC said last Thursday it has tapped Ally Financial Inc. to be the preferred lender when the automaker begins selling Fiat vehicles in the U.S. later this year.

Chrysler will begin naming its Fiat dealers in October and hopes eventually to launch 165 Fiat stores in the U.S. by early next year, with the ultimate goal of having 200 locations.

Ally Financial Inc., formerly called GMAC, is already the main lender for Chrysler dealers and customers. Chrysler dealerships who are selected to receive Fiat franchises will be asked to set up separate showrooms and sales staffs will start by selling the Fiat 500 minicar in December. It will eventually be sold as a convertible and electric car, and larger vehicles from Italy's Lancia brand may come later.

Chrysler hopes to sell 50,000 of the stylish, bulb-shaped 500s the first year they arrive. It wants the cars, which are popular in Europe, to be a serious competitor in the U.S. small-car market, where the Detroit automaker has struggled for years.

About 400 dealers attended a presentation in August on the Fiat product lineup in Detroit as the brand tries to re-enter the U.S. market after a 30-year absence. Chrysler has been run by Fiat CEO Sergio Marchionne since the automaker emerged from bankruptcy protection last year.

Ally Financial became the preferred lender for Chrysler last year. Nearly all automakers have preferred lenders, which can offer lower interest rates and other perks to customers and dealers compared with other lenders.

Published: Mon, Oct 4, 2010


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