Chrysler Close to Deal with Spanish Auto Lender

Chrysler Group LLC is nearing an agreement with Spain's Banco Santander SA to create a captive finance joint venture to be called Chrysler Capital, The Wall Street Journal reports.

The newspaper, which cites unidentified sources, says a deal could be reached within a couple of weeks. Chrysler CEO Sergio Marchionne told reporters late last week that the company was close to signing a deal with an unidentified finance company.

Chrysler said last year it would not renew its contract with preferred lender Ally Financial Inc. That deal expires on April 30. The automaker teamed up with the Spanish bank last May to offer subprime loans to buyers with weak credit scores.

An in-house lending unit would ensure a steady source of financing to the company's dealers and subsidized loans and leases to buyers of Chrysler vehicles. The carmaker's sales downturn in the recession was exacerbated when outside firms curtailed leasing and subprime lending.