Ally Bank 2011 Annual Report Download - page 49

Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10−K
Consumer Automotive Financing Volume
The following table summarizes our new and used vehicle consumer financing volume and our share of consumer sales.
Ally consumer automotive
financing volume % Share of consumer sales
Year ended December 31, (units in thousands) 2011 2010 2009 2011 2010 2009
GM new vehicles
North America 779 694 488 38 40 27
International (excluding China) (a) 360 299 272 28 22 20
China (b) 134 119 74 12 11 11
Total GM new units financed 1,273 1,112 834
Chrysler new vehicles
North America 330 322 64 29 38 8
International (excluding China) 1 1 —
Total Chrysler new units financed 331 323 64
Other non−GM / Chrysler new vehicles
North America 69 33 10
International (excluding China) 3 4 4
China (b) 104 89 33
Total other non−GM / Chrysler new units financed 176 126 47
Used vehicles
North America 476 269 142
International (excluding China) 38 25 22
China (b) 1 — —
Total used units financed 515 294 164
Total consumer automotive financing volume 2,295 1,855 1,109
(a) Excludes financing volume and GM consumer sales of discontinued operations, as well as GM consumer sales for other countries in which GM operates and in which we have no
financing volume.
(b) Represents vehicles financed through our joint venture GMAC−SAIC. We own 40% of GMAC−SAIC alongside Shanghai Automotive Group Finance Company LTD and Shanghai
General Motors Corporation LTD.
Growth in consumer automotive financing volume in 2011, compared to 2010, was primarily driven by higher industry sales. Additionally, the
increase in volume during 2011 reflects our continued focus on the used vehicle and diversified markets, as well as lease−related volume. The penetration
during 2011 reflects a competitive market environment and a return to normalized levels. The decrease in Chrysler penetration is related to a reduction in
automotive manufacturer rate incentive programs. The improved penetration levels for our International operations reflect aggressive manufacturer
marketing incentive programs coupled with existing Ally campaigns, the reintroduction of products, and more competitive pricing.
Manufacturer Marketing Incentives
Automotive manufacturers may elect to sponsor incentive programs (on both retail contracts and leases) by supporting finance rates below the standard
market rates at which we purchase retail contracts. These marketing incentives are also referred to as rate support or subvention. When automotive
manufacturers utilize these marketing incentives, we are compensated at contract inception for the present value of the difference between the customer rate
and our standard rates, which we defer and recognize as a yield adjustment over the life of the contract.
GM historically provided lease residual support to provide incentives on leased vehicles by supporting an above−market residual value, referred to as
residual support, to encourage consumers to lease vehicles. Residual support results in a lower monthly lease payment for the consumer. We may bear a
portion of the risk of loss to the extent the value of the lease vehicle upon remarketing is below the projected residual value of the vehicle at the time the
lease contract is signed. Under these programs, GM reimburses us to the extent remarketing sales proceeds are less than the residual value set forth in the
lease contract and no greater than our standard residual rates. To the extent remarketing sales proceeds are more than the contract residual at termination, we
reimburse GM for its portion of the higher residual value.
In addition to the residual support arrangement for leases originated prior to 2009, GM also participates in a risk−sharing arrangement whereby
GM shares equally in residual losses to the extent that remarketing proceeds are below our standard residual rates (limited to a floor). Over the past several
years, our automotive manufacturing partners have primarily supported leasing products through rate support programs.
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