Government Motors recovery strategy: Make bad loans

Posted by Marc Hodak on June 28, 2010 under Irrationality | Be the First to Comment

General Motors has an impediment to gaining greater market share:

General Motors Co. is in talks with financial institutions to broaden the availability of auto loans, a strategy that for now sets aside any plans to acquire its own lending arm, people familiar with the situation said.

The car maker has had trouble providing loans to more consumers, particularly those with weaker credit history, and views this as a barrier to winning back U.S. market share.

So, if we can only get loans to people with weak credit, we can sell more!  Hmm, where have we heard this before?

In other news, the new financial services overhaul bill–the one designed to never let poor lending practices undermine our credit markets ever again–exempts auto dealer car loans from the same regulations covering bank loans.

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