GM General Motors Company

General Motors Co. will move the marketing support for subvented auto loans in the U.S. from Ally Financial to its GM Financial lending unit, the latest move to bolster the auto maker's internal financing arm and increase customer loyalty.

Alan Batey, GM's North America chief, noted the move in a presentation to analysts Thursday. The auto maker aims to double earnings at GM Financial by 2018, compared with the 2014 performance.

Earlier this year, it moved its financial support of subsidized leasing from Ally to GM Financial, and it informed Ally of this latest move related to auto loans in early September.

The switch will be effective Nov. 3. GM will continue to work with Ally on auto lending and Ally can compete to be part of GM programs. But GM will devote its marketing support to loans by GM Financial offering lower-than-market interest rates.

Ally relied on subvented GM loans for $700 million in the second quarter. That is a relatively modest slice of the $10.8 billion in originations it did over that three-month period.

Still, GM's move is another step back from Ally, which is the former GMAC lender that the auto maker owned and sold late last decade.

Ally's profit fell in the most-recent quarter, though the lender recouped almost all of the auto-origination that it lost when GM took away the leasing business. Earnings were hurt by a charge for early debt extinguishment.

Among the largest auto lenders in the nation, Ally made up for lost GM business by finding growth elsewhere.

A GM spokesman said the move is being made to simplify lending and support GM Financial's growth goals. He said consolidating the business with GM Financial is expected to enhance customer loyalty and improve their experience.

Write to John D. Stoll at john.stoll@wsj.com

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(END) Dow Jones Newswires

October 01, 2015 16:45 ET (20:45 GMT)

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