PA dealer David Kelleher on Stellantis establishing its own finance arm

"This is something we cautiously hoped for, for a long time", says David Kelleher.

Stellantis is expected to close a deal by year’s end, creating its own captive financing arm. Mike Koval Jr., Ram brand CEO said “until now, we were the only major OEM in the U.S. without a captive”. On today’s show, we’re pleased to welcome David Kelleher, Chairman of the Stellantis National Dealer Council and President of David Dodge Chrysler Jeep RAM, to give us his perspective on this move from Sellantis and we’ll also get into the overall state of automotive.

When it comes to Stellantis creating its own captive financing arm, Kelleher says, this is something they cautiously hoped for, for a long time. We will have to wait and see how it comes out and how it’s launched. He says it comes in at a time where we start to settle in with the Chrysler capital and it’s exciting.

Related: Stellantis to buy First Investors Financial Services to create lending arm

Kelleher says some relationships were born out of tough times. With banks coming through and continuing to sustain and help build buildings and grow businesses, those are going to be tough to walk away from says Kelleher. He hopes it’s not a situation where they are going to try to push everyone into a ‘one size fits all.”

Last month, Kelleher started with 42 cars and ended the month with 49, when he usually has 700 vehicles. In between that time, he has sold 168 vehicles. It’s a different world but an efficient world, says Kelleher. He says his customers are liking doing business this way. Kelleher says Stellantis plans to get rid of some long-standing incentives, temporary. A lot of dealers may push back on this but Kelleher wants to remind everyone by nature, these are incentives. The incentives were designed to help sell cars. He says everyone needs to understand this is a unique time with limited commodities to sell and you can’t blame the manufacturer for making those moves. As part of the national dealer council, Kelleher’s main focus is making sure the dealer’s bottom line doesn’t get impacted.

For the last quarter, Kelleher thinks we’re at the lowest inventory you’re going to see. He says, dealers should expect that well into next year. Kelleher says to take care of your clients, mark your cars, hold your gross profits and keep your expenses down accordingly.

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