Chrysler Group LLC is in discussions with banks in order to develop a financing joint venture that would aid the automaker to build on its latest sales momentum, two people familiar with the situation have disclosed. The partnership would be similar to the arrangement that Fiat SpA (which owns 58.5 percent of Chrysler) has with Credit Agricole SA, the insiders further explained.
Chrysler is aiming to create a partnership by the first half this 2012, a year before its preferred-lender arrangement with Ally Financial Inc. expires, according to the insiders who requested anonymity due to the confidentiality of the negotiations.
According to the report of The Wall Street Journal, JPMorgan Chase & Co. and Ally are among the banks that Chrysler is in talks with. WSJ cited unidentified individuals who are familiar with the situation.
Chrysler is the only one among the three Detroit automakers that does not have a dedicated financing arm. In the run-up to its 2010 initial public offering, General Motors decided to purchase AmeriCredit Corp for $3.5 billion cash.
This endeavor was intended to settle a major investor concern as well as to satisfy GM dealers who protested that a lack of financing options cost them sales. Fiat has a deal with Credit Agricole that dates back to 2006. Fiat handles relations with the dealers while the Paris-based bank finances the venture. Chrysler spokesperson Ralph Kisiel and Ally spokesperson Gina Proia both declined to make a comment. [source: Autonews]