According to a new report by SNL Financial, Wells Fargo & Co (WFC -0.26%) has overtaken Ally Financial (ALLY -0.07%) as the number one auto lender in the U.S.

Source: SNL Financial

Already the nation's top mortgage lender, it looks like Wells aims to dominate all aspects of consumer lending. With nearly $53 billion in auto loans on the books, how much more room for growth could there possibly be for Wells? And, should Ally's shareholders be worried about losing the top spot?

Excellent growth
Of the top ten U.S. auto lenders, Wells Fargo produced the highest quarterly growth rate at 3.54%. This is equal to annualized auto lending growth of nearly 15%, which is extremely impressive for a company of this size.

Wells Fargo has grown its auto lending operation by partnering with car dealers across the U.S. In fact, about 95% of the bank's auto loans come directly from dealerships, according to the report. In fact, Wells Fargo Dealer Services has relationships with more than 15,100 auto dealers across the country.

Wells' relationship with General Motors has improved tremendously since Ally's exclusive relationship with GM expired.

Source: Company.

The bank is also doing what it does best – cross selling auto loans to existing customers by sweetening the deal. According to Wells Fargo's website, those customers who make automatic car loan payments from a qualifying Wells Fargo checking account can qualify for a "customer relationship discount" of up to 0.5% off their interest rate.

As far as future growth possibility is concerned, Wells Fargo wants to be their customers' only bank. In other words, they want to provide every banking service their customers need. The average Wells Fargo customer currently has about six different banking products with the company, and Wells wants to increase this number to eight over the next few years.

Just to illustrate this, the average auto loan in America is currently about $27,400. So, as a rough estimate, Wells Fargo's auto loan portfolio represents about 1.9 million individual loans.

Well, the bank has about 70 million customers. So, if Wells gets as aggressive and creative about cross-selling auto loans to its customers as it has been with some of its other products, there is definitely a lot of potential to grow.

What about Ally?
Ally shouldn't necessarily worry about losing the number one spot. However, what the company should be concerned about is the lack of growth, and the loss of partnership agreements.

Source: Company.

In addition to losing GM's exclusivity a couple of years ago, Ally's partnership with Chrysler Group, LLC and Fiat expired this past year, and Santander Holdings USA won Chrysler's business, instantly catapulting it to the number six spot.

It's completely fine to lose the top spot if someone else is simply growing a little faster than you are. It's another thing entirely to lose the top spot because your growth has sputtered out entirely. While one quarter's performance can be overcome, the quarterly loan growth of just 0.4% should indeed be a concern for Ally's investors. Year-over-year, Ally's auto loan portfolio actually shrank by more than $8 billion, mainly as a result of losing the partnerships with the major automakers.

This is especially true since Ally relies so much on auto lending to make money. About 52% of Ally's loan portfolio consists of auto loans, and even after the tremendous growth, just over 6% of Wells' portfolio is made of auto loans. And, unlike Wells Fargo, Ally doesn't have nearly as many banking customers to attempt to convert to auto loan customers.

So, to answer the original question I proposed: Yes, Ally should be worried. A giant like Wells Fargo has the ability to undercut the competition, offer better incentives to dealers and consumers, and can afford to take more risks to grow its business.