From Bloomberg:
Without access to floorplan financing, most dealerships would be forced out of business, said John Casesa, partner in Casesa Shapiro Group in New York.
Casesa said another sign of the struggle is that so-called captive finance companies are less willing to make floorplan loans to dealerships of different brands. Credit availability for consumers wishing to buy cars already has been cut. Many lending companies have stopped offering leasing, and yesterday Regions Financial Corp., Alabama’s largest bank, told about 2,600 auto dealers that it will stop issuing loans through their businesses after Jan. 1.
From The Auto Channel:
Major banks such as Bank of America and Wells Fargo also have increased interest rates on dealer inventories, or floorplans.
At the same time, many lenders are demanding more collateral for floorplan loans. Some lenders are refusing to floorplan unprofitable dealerships, to the point of recalling their loans, and sluggish car sales have made a bad problem worse.
Macroeconomics may bankrupt the Big Three:
GM rose 13 cents, or 2.7 percent, to $4.89 at 4:02 p.m. in New York Stock Exchange composite trading, its first advance since Sept. 30. Ford dropped 9 cents, or 4.3 percent, to $1.99, its lowest since Oct. 5, 1982. Chrysler is closely held…
Global demand in 2009 may be even worse, with “an outright collapse” now possible, according to J.D. Power, which is based in Westlake Village, California.
Citigroup is bailing on GM:
GM shares have plunged to a nearly 60-year low amid the decline in U.S. auto sales and the credit crisis.
Meanwhile, Chrysler‘s outsourcing:
Sources say, Chrysler is interested in contract manufacturing its SUV range (which includes once-best-sellers like Jeep Cherokee and Grand Cherokee) and Dodge line-up (for which it’s looking for small car options) in India both for sale in India and North America.
It’s not just the automakers:
This spring, reports began surfacing that some factors and lenders were tightening credit, requiring suppliers to take more risk exposure and cutting back on the credit dollars available to furniture stores. GE Capital Solutions cut — and by some accounts effectively eliminated — its unsecured inventory financing program to the industry.
Recent Comments