DETROIT — Chrysler Group LLC notified Ally Financial Inc. on Wednesday that it won't renew its partnership, raising the likelihood that it could establish its own in-house lending arm to better compete in the U.S. market.

The auto maker told Ally it declined to continue its current pact beyond the April 30, 2013 expiration date. Chrysler has begun talks with other financial institutions about providing automotive financing to its dealer network.

Chrysler, which gave up its struggling finance unit during its 2009 bankruptcy, has used the government-owned Ally as its preferred lender for customer loans and leasing.

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