Opel Creates Finance Arm in Europe

General Motors Co.'s Opel unit has established a $1.7 billion European auto lending arm to enable the company to offer more attractive financing deals to buyers of Opel and Vauxhall vehicles.

Opel says it aims to boost its sales in the region with such deals as 0% financing with no down payment.

Last month General Motors Financial Co. acquired most of Ally Financial Inc.'s auto financing operations in Europe and Latin America. The former, which include a German banking license, have become Opel Financial Services.

As competition intensifies in Europe's shrinking car market, automakers with strong captive lenders are offering low-rate loans and leases to bolster sales. Opel intends to boost the proportion of sales financed in-house from 40% now.

The lending arm is initially offering loans in Austria, Belgium, Germany, Italy, Luxemburg, Netherlands, Sweden, Switzerland and the U.K. Opel says the unit will add financing in other markets.