GM Financial, Ally squaring off in lending market

General Motors and its former financial wing, Ally Financial, are shaping up to do battle in the auto lending industry. First, GM reported that it was preparing to expand its own lending sector, GM Financial. The company was forced to revamp its lending arm after the government assumed a majority control of GMAC, the automaker's previous financial services company. Additionally, GM Financial was forced to reconstruct future plans after a $5 billion offer to purchase Ally Financial was turned down last year, The Wall Street Journal reports. Currently, Ally and GM Financial have significant business interactions, but GM Treasurer Dan Ammann told the WSJ that he expects that relationship to fracture in the near future. "The objective is to make sure there is competitive financing," Ammann told the paper. The news source states that many of GM's dealers and consumers remain Ally customers. The potential splintering comes at a time when Ally is gearing up for an IPO. According to Crain's Detroit Business, the lender may go public as soon as the second quarter of 2011. That would be a major step for GM's former financial sector, after Ally took in more than $765 million in Q4 2010. Crain's reports the IPO is part of a move to shed 74 percent of the company's stock currently owned by the federal government.