GMAC said it would relax credit requirements to allow loans to 80 percent of U.S. consumers. In mid-October, GMAC increased minimum credit requirements to a level that shut out 40 percent of GM buyers.

Also Tuesday, GM rolled out promotions to boost sales, including zero percent financing on some vehicles and low-interest rates on about three dozen 2008 and 2009 models. The offers expire Jan. 5.

Local dealers welcomed the moves. Many said that an inability to secure financing in recent months pushed droves of would-be buyers out the door without a new set of keys.

George Fowler, general manager of Superior Pontiac-Buick-GMC in Dearborn, said GMAC’s tight requirements helped lower sales from a monthly average last year of about 150 cars and trucks to just 18 in November.

As of Tuesday, Fowler’s team had sold 24 vehicles this month, compared to 167 in December last year.

“It’s not that people didn’t want to buy,” Fowler said. “It’s that they couldn’t. The credit just wasn’t there.”

GMAC’s move was a big boost for dealers who have not had much good news lately. GM said earlier this month that its restructuring plan could include cutting at least 25 percent of its dealers, or about 1,700, by 2012 and closing, shrinking or selling its Saab, Hummer, Pontiac and Saturn brands.

GM has been hard hit by consumers inability to obtain financing. In November, GM sales fell 41.3 percent, while industry demand plummeted 37 percent to the lowest selling rate in 26 years.

“We will immediately put our renewed access to capital to use to facilitate the purchase of cars and trucks in the U.S.,” GMAC President Bill Muir said Tuesday.

Mark LaNeve, GM’s vice president of North American sales and marketing, said GMAC’s relaxed standards also might allow the automaker to return to leasing vehicles.

LaNeve told The Detroit News that “a viable, healthy finance partner is critical to our turnaround.” He could not immediately predict how much sales might grow with easier access to GMAC loans, but said he expected “a considerable increase in traffic and a lift in sales.”

Continued at Detroit News

General Motors shares are up after its GMAC finance affiliate was given approval for bank holding status, thus achieving eligibility for government loans.  GMAC is a critical part of General Motors, as it finances three-fourths of the inventory held by GM dealers. In recent months, problems at the lender have forced it to reduce financing for dealerships and consumer purchases of new GM cars and trucks.

This approval for bank holding company status was not a surprise for GMAC, given GM’s recent approval for a loan from Washington; in fact, this was a likely part of the overall negotiations. We are still cautious on the auto stocks, and on anything auto-related for that matter. We would look elsewhere for better investment opportunities.

Source:  Forbes

“Cerberus executives have maintained repeatedly that they believe in the industry. They expect to be there for the long term and want to do all they can to position Chrysler for the future,” a source said.

Chrysler has seen sales slide 25% this year alone, a higher percentage than the auto industry as a whole.  It remains a hot topic for automotive reporters to speculate on.  No one quite knows what the future of Chrysler is and with the company being silent to the press it’s an easy target to fill a column with.

Cerberus recently had talks with General Motors about a potential merger.  But according to a source the talks never consisted of giving up any of their stake in Chrysler.  Nor would they swap it for GMs stake in GMAC.

“Cerberus is not dumping Chrysler or simply swapping it for an increased share in GMAC. That deal was not discussed and they have no interest in it,” said the source, who declined to be identified.

“In any business combination with GM or anyone else Cerberus would look to come out on the other side owning a meaningful stake in the combined auto company,” the source said.

I guess with the auto industry in shambles it makes sense for the guys with all the cash to come in and scoop up some of the mess for pennies on the dollar.  The upside would be too hard to ignore.