NEW YORK — Revealing preliminary third-quarter results, Ally Financial said that for its auto finance business one of the areas it sees as a strong growth opportunity is the used-vehicle market. And the company has already been ramping up originations for this market segment.

Year-over-year originations for this segment climbed from $800 million in the 2009 period to $1.3 billion in the latest quarter.

In a breakdown of originations, Ally pointed out that the third quarter consisted of $9 billion in new originations, $1.3 billion in used originations and about $1.1 billion of new leases.

For the third quarter of 2009, the company generated $6.8 billion of new originations, about $800 million of used originations and approximately $100 million in leases.

Explaining the results, management explained, "Growth in consumer financing originations was driven by improved conditions in the auto market, higher used-vehicle originations, improved leasing levels and continued strong penetration levels at General Motors and Chrysler as Ally continues to focus on originating loans from across the credit spectrum under prudent underwriting principles.

"Additionally, the used-vehicle market represents a growth opportunity for Ally, as the company continues to diversify its auto finance business," the team added.

North American consumer financing originations for the third quarter came in at $9.4 billion, which includes $8.3 billion in the U.S. Meanwhile, looking at the same time frame last year, management noted that originations in North America were $6.2 billion, which included about $5.6 billion in the U.S.

Looking at international originations, management pointed to strong growth in China, Brazil and the U.K. during the quarter. Consumer originations increased 67 percent in China, 56 percent in Brazil and 29 percent in the U.K, compared to the third quarter of 2009.

As for wholesale penetration for GM dealer stock, this came in at 83.7 percent in the quarter, compared with 86.6 in the previous quarter and 85.9 percent in the third quarter of 2009.

U.S. consumer penetration for GM was 34.2 percent, compared with 34.4 percent in the previous quarter and 31.7 percent in the previous year.

"GM consumer penetration levels in the U.S. have remained relatively stable despite lower incentivized origination levels, demonstrating Ally's ability to win business and remain competitive in the marketplace," company officials highlighted.

"In the third quarter, 44.1 percent of new GM contracts booked were incentivized, compared to 64.9 percent in the third quarter of 2009," they continued. "Ally continues to diversify its business as GM incentivized business accounted for only 20 percent of Ally's overall consumer originations in the third quarter of 2010, compared to 45 percent for the full-year 2009."

Continuing on, Ally said its average U.S. wholesale penetration for Chrysler dealer stock was 76.2 percent, compared with 77.1 percent in the second quarter of this year and 31.7 percent in the third quarter of last year.

"Ally's U.S. consumer penetration for Chrysler during the third quarter of 2010 was 49.4 percent, compared to 52.5 percent in the prior quarter and 13.3 percent in the third quarter of 2009," management indicated.

North American Auto Finance Results

For the third quarter, the North American auto finance division, which includes the U.S. and Canada, reported pre-tax income from continuing operations of $568 million, compared with $272 million in the same period of 2009.

"Results were driven by strong growth in origination volume due to improved economic conditions and continued diversification," according to Ally. "The company's diversification efforts are being supported by the expanded rollout of the Ally Dealer Rewards program and the DealerTrack channel."

The company went on to boast that its success is also driven by strong dealer relationships, which include about 14,000 dealers throughout North America.

"These relationships are fostered by competitive pricing, Ally Dealer Rewards and a broad array of dealer and consumer products," management suggested.

Moreover, officials said, "The business also benefited from remarketing gains due to favorable used-vehicle prices, lower operating expense and a lower loan loss provision. This was slightly offset by lower operating lease revenue due to the continued decline in the size of the operating lease portfolio."

Global Auto Finance Results

This segment of the company's business, which includes N.A. automotive finance, international auto finance and insurance, posted a third-quarter pre-tax income from continuing operations of $756 million, compared with $412 million in same time frame last year.

Officials boasted that this is the seventh consecutive profitable quarter from the core automotive business.

Company-Wide Results

Ally Financial as a whole reported net income of $269 million, compared with a net loss of $767 million in the previous year.

Core pre-tax income, which the company said reflects income from continuing operations before taxes and original issue discount amortization expense from bond exchanges, came in at $636 million, compared with a core pre-tax loss of $565 million.

Officials said core pre-tax income was driven by slightly higher net revenue, a lower loan loss provision and lower operating expenses thanks to the company's continued focus on cost reduction.

Speaking out about the third-quarter results, Michael Carpenter, Ally's chief executive officer, said, "The third quarter demonstrated continued positive momentum for Ally with all four operating segments recording profitable results. Our dealership position in the auto finance industry is evidence by consistent market share, a more diversified product mix and the addition of another auto partner with Fiat in the U.S."

He went on to note, "We remain focused on being an independent, market-driven competitor and are optimistic about the long-term prospects for the company."

Ally Brand Adopted for Commercial Finance Business

Earlier this week, Ally Financial announced it is rebranding its GMAC Commercial Finance operations in North America as Ally Commercial Finance. This comes in light of management seeking to expand the commercial finance platform for extending commercial credit to small and mid-size businesses, which include dealers.

"We are pleased to bring commercial finance under the Ally brand as we look to leverage our competency in offering financing solutions to a variety of businesses. Commercial finance is a proven provider of secured loans that has performed well over the year," said Carpenter.

Meanwhile, Bill Hall, president and CEO of Ally Commercial Finance, added, "We see opportunities to finance mid-size companies, many of which are in a growth or transition mode. In many cases, we are the primary source of financing for our clients, and we also play a role in larger credit facilities."