Inventory Floor Planning Solutions

For any one looking for Chrysler Dealer list here is a down loadable Excel file which can be sorted by Dealer, Majority Owner, Address, Brand, State or Zip Code.

Chrysler Dealer Hit List Excel file

Technorati Tags: Chrysler, Chrysler Dealerships Closing LIST

Here are the the number of Chrysler Dealers per State on the list to be closed.

PHILIP NUSSEL

AUTOMOTIVE NEWS

MAY 8, 2009 – 1:02 PM ET

Just three days after dodging bankruptcy by restructuring its debt, Sonic Automotive Inc. today said it ended two quarters of losses by posting a $1.7 million profit.

The nation’s No. 3 auto dealership group credited the results to efforts to build local dealers’ market share in a shrinking market. Sonic also continued cutting costs and raised its target for cost reductions during the current year by an additional $10 million, to $135 million.

The $1.7 million first-quarter profit compared with net income of $12.6 million a year earlier and followed combined losses of $711 million in the previous two quarters. Revenue plunged to $1.18 billion, down 25 percent from the same quarter a year ago.

On Tuesday, Sonic avoided bankruptcy when bondholders allowed the Charlotte, N.C.-based dealership group to postpone a $90 million debt payment until 2012. On April 1, Sonic warned of a possible bankruptcy if it wasn’t able to restructure debt that would have matured this week.

Sonic’s profit came as U.S. vehicle sales rates fell to 27-year lows. Overall U.S. sales plunged 37.4 percent during the first four months of the year compared with the same four months of 2008.

“Our continued focus on executing the basic blocking and tackling of our playbook produced solid results in the most difficult automotive business environment in at least a generation,” Sonic President Scott Smith said in a statement. “Our advertising and Internet marketing initiatives resulted in 83 of our dealerships taking share by exceeding their local markets for the quarter. Our used-vehicle business continues to outperform the industry.”

Over the past six months, Smith said, Sonic has cut 10 percent of its work force. He added: “We now have fewer people making more money.”

Sonic said new-vehicle sales plummeted to 16,801 during the quarter, down 30 percent from the first quarter of 2008. Used-vehicle sales remain relatively stable at 15,155, compared with 15,782 sold a year ago.

Sonic ranks No. 3 on the Automotive News list of the top 125 U.S. dealership groups for 2008.

Source: Automotive News

Technorati Tags: Sonic Automotive

LINDSAY CHAPPELL

AUTOMOTIVE NEWS

MAY 7, 2009 – 2:33 PM ET

CHATTANOOGA, Tenn. — Conceding that some of its U.S. suppliers may be too financially troubled to build their own parts plants, Volkswagen AG is seeking help from an unlikely source: real estate investors.

VW said it is asking private developers to build and own suppliers’ factories that would serve the automaker’s new U.S. assembly plant here.

Tom Loafman, purchasing director for Volkswagen Group of America, said the plan would help suppliers reduce their upfront investment. Developers would build parts factories to order and lease them to suppliers, he said.

Loafman said he is talking to suppliers and private investors around the South. VW remains flexible about structuring the financial arrangements, he added.

Nelson Bowers, a Volkswagen, Toyota and Kia dealer in Chattanooga, said he plans to take part in the effort.

VW wants a supplier park on a 1,000-acre parcel that the city of Chattanooga is making available next to the site of the new auto plant. The company seeks 80 percent local content for the mid-sized sedan the plant is scheduled to start producing in 2011.

The new sedan will share half its parts with the next-generation Jetta to be built at VW’s plant in Puebla, Mexico, Loafman said.

Scott Cooper, an economic development specialist with the Chattanooga Chamber of Commerce, is working with Volkswagen suppliers. Many of them, he said, face cash flow problems.

“Volkswagen recognizes that the situation is different now than when a lot of other new auto plants were built in recent years,” Cooper said. “They’re devoting a significant amount of time courting suppliers to this supplier park.”

VW has named only a few of its U.S. suppliers to the new plant. Last month, VW awarded M-Tek Inc., of Manchester, Tenn., a $147 million contract for door components. M-Tek has not decided whether it will build a dedicated facility at the Chattanooga site.

Source: Automotive News

Technorati Tags: Volkswagen

The Federal Reserve Board’s April 2009 Senior Loan Officer Opinion Survey on Banking Practices was released on 5/04/2009. The report addressed changes in the supply of, and demand for, loans to businesses and households over the previous three months. The survey also included two sets of special questions: The first set asked banks about their expectations for delinquencies and charge-offs on existing loans to business and households; the second set queried banks about international trade finance. This article is based on responses from 53 domestic banks and 23 U.S. branches and agencies of foreign banks.

Click here to read The Full Report

Source: http://federalreserve.gov/

Technorati Tags: Banks and Institutions, Federal Reserve System

JAMIE LAREAU

AUTOMOTIVE NEWS

MAY 5, 2009 – 5:32 PM ET

DETROIT — GMAC Financial Services is extending through May a policy that allows dealers to avoid making certain payments on aging inventory.

GMAC had suspended dealers’ so-called curtailment payments in April.

“That’s one of our means to help alleviate stress on dealers while they also reduce their inventory on aging vehicles,” said Sue Mallino, a GMAC spokeswoman.

A curtailment is a payment dealers must make on old inventory. For new vehicles, the curtailment normally would be assessed on all 2007 and 2008 model vehicles that dealers have financed for more than 18 months. The curtailment also would cover used vehicles from 2007 and 2008 that dealers financed for more than six months.

“For aging inventory, we began to acquire a percentage of the financing to be paid down, and that’s what’s known as a curtailment,” Mallino said.

That percentage can be up to 10 percent of the vehicle’s outstanding balance. So if it’s a $10,000 car, a dealer might pay $1,000 a month for 10 months and pay it off, Mallino said. The time frame depends on how much financing is still owed.

Source: Automotive News

Technorati Tags: floor plan financing, Floorplan Financing, GMAC Financial Services

WASHINGTON (May 1, 2009) – The following is a statement from John McEleney, chairman of the National Automobile Dealer Association, on the expansion of eligibility for a Small Business Administration loan guarantee program designed to help small businesses get access to working capital:

“By significantly expanding the SBA 7(a) loan guarantee program, the President along with SBA Administrator Karen Mills and her staff, have taken a significant step toward unlocking the frozen credit markets that are so critical to the success and continued operation of thousands of small, family-owned dealerships across the country. The newly expanded SBA 7(a) program should encourage lenders to assist thousands of additional dealers with the liquidity they need to keep their doors open, make payroll and prevent further layoffs, especially in these difficult economic times.

“NADA, which is encouraged that the SBA has expanded their loan-guarantee program, will continue to work with the Obama administration to lift the existing regulatory prohibition on vehicle inventory financing (floorplanning). Removing this constraint would enable lenders to make floorplan loans to those many small dealers currently finding it difficult to secure the funds they need to purchase new vehicle inventory.

“The nation’s franchised auto dealers-both domestic and international-applaud the Administration for its actions and its understanding that, unless the dealer credit problem is fixed, any effort to revitalize the auto industry simply will not work.”

BACKGROUND: NADA Chairman John McEleney, members of NADA’s executive committee and senior staff, along with leaders from the National Association of Minority Automobile Dealers (NAMAD), met several times with SBA since Nov. 2008 to advocate a more inclusive size standard for dealers seeking access to the 7(a) loan program. These meetings led to the SBA action, discussed above.

In the American Recovery and Reinvestment Act (ARRA), enacted earlier this year, Congress raised the ceiling on 7(a) loan guarantees to 90 percent and reduced or eliminated borrower fees. This has prompted an increase of 25-plus percent in loan volume and sparked the return of hundreds of lenders to the market. Together, the ARRA and the SBA’s new size standard should enable more dealers to obtain working capital under the 7(a) loan program.

NADA is continuing to work with lenders to encourage them to make 7(a) loans to dealers and with the Obama administration to allow proceeds from these loans to be used for floorplan financing.

Source: www.nada.org
Contacts:

David Hyatt
Vice President
NADA Public Affairs
(703) 821-7120
dhyatt@nada.org

Charles Cyrill
Director of Public Relations
NADA Public Affairs
(703) 821-7121
ccyrill@nada.org

Technorati Tags: floor plan financing, Floorplan Financing, NADA, National Automobile Dealer Association, SBA

MCCLEAN, Va. — John McEleney, chairman of the National Automobile Dealers Association, announced his support this week for recent changes to SBA 7(a), a Small Business Administration loan-guarantee program.

McEleney said an expansion of the program under the terms of the American Recovery and Reinvestment Act of 2009 will benefit dealers by providing an incentive for lenders to extend floorplanning lines of credit.

“By significantly expanding the SBA 7(a) loan guarantee program, the President along with SBA Administrator Karen Mills and her staff, have taken a significant step toward unlocking the frozen credit markets that are so critical to the success and continued operation of thousands of small, family-owned dealerships across the country,” McEleney said. “The newly expanded SBA 7(a) program should encourage lenders to assist thousands of additional dealers with the liquidity they need to keep their doors open, make payroll and prevent further layoffs, especially in these difficult economic times.”

The NADA has met with officials from the SBA and the Obama administration several times since last November, all in an effort to rally support for U.S. dealerships. Economic turmoil and frozen credit markets have resulted in record declines in new-car sales and put thousands of dealers out of business.

“The nation’s franchised auto dealers — both domestic and international — applaud the Administration for its actions and its understanding that, unless the dealer credit problem is fixed, any effort to revitalize the auto industry simply will not work,” McEleney said.

Source: F&I management & Technology

Technorati Tags: floor plan financing, Floorplan Financing

ARLENA SAWYERS

AUTOMOTIVE NEWS

MAY 4, 2009 – 12:01 AM ET

Last November, Bob Cockerham closed his Suzuki dealership in Rio Rancho, N.M. Its new-vehicle sales had plunged 60 percent from the previous year.

In January, Wells Fargo Auto Finance, the floorplan lender for Cockerham’s Car World Kia dealership in Santa Fe, N.M., told him it was canceling his loan agreement. The bank said the dealership was losing too much money.

Things looked bleak. Then, in February, David Swanson rode to Cockerham’s rescue.

Swanson operates Save Your Car Dealership, a Seattle company specializing in crisis management for dealerships on the brink of losing their inventory financing. Swanson, a former dealer, reviewed the financials at Cockerham’s Kia store and went to work.

Under Swanson’s guidance, Cockerham slashed his advertising budget by about 70 percent, to $14,000 a month. By changing vendors, Cockerham cut his data processing costs in half, to $7,750 a month, and his telephone expenses by more than 40 percent, to $4,100 a month. He switched his sales managers, who previously earned a salary along with commission, to straight commission.

None of Swanson’s advice was rocket science, Cockerham concedes. He said he knew he needed to make deep cuts to survive, but could not bring himself to do it.

Survival manual

David Swanson, founder of Save Your Car Dealership, says dealers must take these steps to cope with a down market.

• Streamline spending
• Focus on used-vehicle sales
• Monitor financial statements for errors
• Communicate closely with lenders
• Follow through on tough changes

‘Terrifying experience’

“It’s a pretty terrifying experience,” Cockerham told Automotive News. “David takes the emotion out of it. He calmly comes in and says, ‘Here’s what we’re going to do.’ ”

Swanson said Wells Fargo is reviewing the dealership’s streamlined budget. Added Cockerham: “We’re close to putting another deal together. David’s done a great job of convincing them of our long-term viability.”

Swanson, 51, said his four-year-old company now works with about 35 dealerships. He said he has gotten lenders to restore floorplanning for about 60 percent of the 120 clients he has represented.

Often, Swanson said, his biggest challenge is persuading dealers that they need to change with a changing market. Lenders care about a dealership’s cash flow, capitalization, liquidity and liabilities, he said – not a dealer’s wishful thinking.

“Lenders don’t want to hear about a plan to sell more cars,” Swanson said. “The economy isn’t going to get better in the near future. I tell my dealers to cut costs to match the lousy economy. Lenders want to see blood on the floor.”

Swanson said he typically works with dealerships for six to eight months to ensure they follow through on the changes he advocates.

He charges $15,000 to $35,000 for his services, depending on the size of the dealership and the number of dealerships involved in a single restructuring. He says half of the fee is paid upfront. The rest is paid if he is successful in restoring floorplan financing.

If financing isn’t restored, dealers don’t pay the rest of the fee.

Leonard Wantz said he hired Swanson last fall when his Chevrolet dealership in Taneytown, Md., faced disaster. Floor traffic had dried up, as had the retail financing provided by a local bank. The dealership’s inventory lender, which Wantz declined to identify, threatened to cut off financing.

Slashing jobs, ad budget

Wantz and Swanson slashed the dealership’s head count by almost 40 percent, to 27 workers. They cut ad spending almost 60 percent, to about $5,000 a month. With those and other reductions in place, Wantz said, his floorplan lender agreed to maintain his credit line.

“After 44 years in business, I thought it was coming to an end,” Wantz said. “But when David got involved, he painted a whole different picture.”

Swanson said his clients benefit from his own mistakes as a dealer. From 1991 to 2002, he owned two Nissan dealerships, a Hyundai dealership and a Subaru dealership, all in the Seattle area.

Swanson said he bought too many stores, expanded too rapidly and soon became overextended. He invested some of the dealerships’ cash in tech stocks. When the tech bubble burst, he said, his working capital was “decimated.”

Said Swanson: “I was young and stupid.”

Source: Automotive News

NEIL ROLAND

AUTOMOTIVE NEWS

MAY 1, 2009 – 4:29 PM ET

NEW YORK — About 10,000 auto dealers and an untold number of suppliers will be eligible for federally backed loans of up to $2 million each under a new Obama administration program announced today.

The temporary Small Business Administration plan will loosen eligibility requirements for working-capital loans starting early next week, the agency said in a statement today. The loans for working capital typically are provided by small regional banks and guaranteed by the federal government.

Although only about 25 percent of the 19,000 U.S. auto dealers have been eligible for the assistance, that percentage will more than double under the new program, said John McEleney, chairman of the National Automobile Dealers Association.

“This means that thousands more dealers will be able to avoid layoffs, make payroll and keep employees,” he said in an interview.

The money can be used for daily operational expenses, McEleney said. The dealers group is trying to get more federal aid for floorplan loans, which can be used to purchase new cars from automakers, he said.

The new program will be in effect through September 2010, the SBA said. It will affect all small businesses, not just auto dealers and suppliers.

A spokesman for the Original Equipment Suppliers Association did not immediately respond to a request for comment.

The new eligibility requirements are based on net worth and net income rather than revenue.

To qualify, a dealer’s company and its affiliates must not exceed $8.5 million in net worth and $3 million in average annual net income after federal income taxes, excluding carryover losses, for the two preceding fiscal years.

SBA loans cannot be used to finance dealership floorplans. Dealers use floorplan loans to finance the purchase of new vehicles.

The typical floorplan loan is for $5 million. “Two million dollars is extremely helpful, but it’s not large enough to help a dealer’s floorplan,” Bailey Wood, NADA’s legislative director, told Automotive News yesterday. NADA is lobbying the federal government for more floorplan financing, Wood said.

Source: Automotive News