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GMAC said on Tuesday it would stop making new consumer car loans in seven European countries from Nov. 1, the latest financing cutbacks by the finance firm controlled by Cerberus Capital Management.
GMAC, which is 51 percent owned by Cerberus and 49 percent by General Motors, said it pulling back from the auto loan market in Europe in response to the significant capital and credit market disruptions.
Detroit -based GMAC said it would stop making retail auto loans in the Czech Republic, Finland, Greece, Norway, Portugal, Slovakia and Spain, GMAC said, adding that it also was assessing the markets in Hungary and Denmark.
The finance company also said it would implement a more conservative pricing policy on auto loans throughout Europe.
Earlier this month, GMAC said it would pull back from riskier and longer-term auto lending in the United States due to tight credit conditions that had limited its access to funds. GMAC has also moved to limit its exposure to vehicle leases in North America.
GM [GM
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] dealers have complained that the sharp limits to vehicle financing are costing them sales at a time when industry-wide auto sales are contracting sharply.
GM and Cerberus are in talks over the potential merger of GM and Chrysler, which is also owned by Cerberus. The discussions have included a request for some $10 billion of U.S. government support to complete the arrangement, according to people familiar with the private talks.
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