Paced by General Motors Acceptance Corp. (GMAC) and AmeriCredit, the financing industry weathered Ford Credit’s pullout from nonprime and non-Ford brand financing with strong showings in the first quarter and optimistic projections for the balance of 2002.

Even parent Ford Credit shook off the fallout from its announced phaseout of Fairlane Credit by reporting a $256 million profit for the March quarter and noting a substantial recovery from its performance in the fourth quarter of 2001.

“The economy continues to pose challenges,” said Ford Credit President and Chief Operating Officer Gregory C. Smith. “But it is showing signs of recovery, evidenced by our improved financial performance over the last quarter. We remain focused on the fundamentals of our business and recognize that further improvement is required.”

The approaching midsummer shutdown of nonprime carrier Fairlane Credit was noted by first-quarter reports from both GMAC and AmeriCredit, as well as the announcement that a new competitor -- Capital One Financial Corp., of Falls Church, Va. -- was entering the field to help pick up the slack left by the Ford Credit subsidiary’s exit.

As the largest independent nonprime provider, AmeriCredit said its loan originations rose 47 percent in the first nine months of its fiscal year ended March 31. CEO Michael R. Barrington, declaring that AmeriCredit earned net profit of $91.6 million in the March quarter, said the Ford move was contributing to the Fort Worth, Texas-based provider’s portfolio and “demand for nonprime financing remains strong despite a weak economy.”

One sign of the finance industry’s inherent strength, Barrington said, is the growth of the DealerTrack system for dealership loan approvals shared by AmeriCredit with five other lenders – Chase Auto Finance, Subaru Finance, Wells Fargo, Arcadia and Regions. Some 17,000 dealers are expected to be on the DealerTrack network by year-end.

GMAC, whose net income in the first quarter rose to $439 million on sales of $6.4 billion, compared to $431 million and $6.3 billion a year earlier, is en route to an eighth consecutive year of increased profits.

But the giant GM subsidiary, half of whose profits are forked over to parent GM, is maintaining a presence in the subprime business with its own captive offspring, Nuvell Credit Corp., of Little Rock, Ark. Nuvell has now expanded into prime-risk loans and earned more than $20 million in 2001, according to John E. Gibson, executive vice-president of GMAC’s North American Operations.

With more than 250,000 contracts, up 60 percent from 2000, Nuell also now provides new-car financing for GM-Owned Saab Cars USA. Gibson said GMAC is “very happy with Nuvell’s performance and outlook.”

Ford Credit and GMAC improved their showings from 2001 after rolling back their lease portfolios as the result of rising lease-end losses on returned vehicles. Ford Credit’s retail and lease loss in the first quarter amounted to $1.4 million, up from $1.1 million in the same quarter a year ago but down from $1.7 million in the fourth quarter when its overall loss reached $297 million.

Independent Credit Acceptance Corp., of Southfield, Mich., pioneered a nonprime lease initiative in 2000 with DaimlerChrysler Financial Services, but residual losses caused CAC to drop the program earlier this year, according to CAC’s new CEO, Brett Roberts.

GMAC reported that it reduced retail leases to 9.8 percent of retail sales in the first quarter this year, from 16.5 percent in the same 2001 period.

DaimlerChrysler Services AG, joining Chrysler Financial and Mercedes-Benz Credit, reported $60 billion in managed receivables at its January 1, 2002, organization date. This compares to $208 billion for Ford Credit and $118 billion for GMAC. DC’s new subprime partner is Chase Auto Finance, of Garden City, N.Y., its alternate preferred lender in a deal signed last year.

Westcorp, of Irvine, Calif., whose nonprime subsidiary is WFS Financial, reported that auto contract purchases rose 7 percent in the first quarter and net income totaled $16.9 million, compared with $17.7 million a year earlier.

Westcorp’s new president, Tom Wolfe, said that although its provision for credit losses was raised to $65.7 million from $27.0 million, WFS experienced a lower than expected number of repossessions, higher auction resale prices, and reduced delinquencies in the first quarter. The WFS auto contract portfolio rose to $8.4 billion as of March 31, up from $8.2 billion December 31, 2001.

“We expect to see further improvement in our asset quality trends during the rest of the year,” Wolfe said, a sentiment that appeared to be universal throughout the auto lending community this past spring.

Moreover, AmeriCredit’s Barrington told analysts that franchised new-car dealers originated $228 billion in subprime loans last year, a sum that has grown about 5 percent annually since 1996.

Ford Credit, although winding down Fairlane, said it plans no changes in its thriving Triad Financial subsidiary, of Huntington Beach, Calif., also a nonprime specialist. Wells Fargo introduced a nine-tier nonprime package in a new business campaign -- all of which underscores the underlying strength of the subprime market, as the industry first-quarter financial results affirmed.