Inventory Floor Planning Solutions

Archive for the ‘Investor News’ Category

Now let’s turn to some key factors that influenced our wholesale sales, that is the boats we sold to our dealer network. In addition to the underlying retail demand, another factor that is having an effect on overall wholesale demand is the availability and cost of floor plan financing. Several traditional floor plan lenders have exited the market or materially reduced their exposure, and the remaining lenders have imposed stricter lending criteria as they seek to protect the quality of their loan portfolios.

Although Brunswick dealers continue to benefit from the financing availability provided by BAC, our joint venture with GE, beginning April 1, dealers became subject to revised terms, including higher financing costs and long curtailment payments. These changes translate to higher costs for dealers to carry inventory, which has led Brunswick and our dealers to reassess and ultimately reduce wholesale orders. This will ultimately lead to a healthier Marine environment with lower inventory levels held in the dealer system.

In response to these market factors, and our strategy to do all we can to protect our dealer network, we’ve reduced the number of units that we sold to dealers nearly 60% in the second quarter versus last year. This is the same percentage decline experienced in the first quarter of 2009.

Technorati Tags: Brunswick Corporation, Floor plan

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

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

I just finished reading this at www.businessweek.com, while I like the Prosper.com idea the risk of unsecured lending to strangers seems to great for the private investor. We believe investors should focus on their local communities and reduce risk by holding title to physical collateral, that is what floor plan financing is all about.

Excerpt,

Once seen as the future of financing for entrepreneurs, the social-networking approach has suffered from high defaults

By Amy Barrett

It has been a year of setbacks for peer-to-peer lenders such as Prosper, Lending Club, and Zopa, which use the Web to connect those who need a loan with individuals willing to act as lenders. Once positioned to become an alternative financing spigot for entrepreneurs, the nascent industry has been hit by regulatory issues, a slow economy, and a slew of defaults.

Read the full story here www.businessweek.com

Technorati Tags: entrepreneurs, Financing, Peer to Peer Lending, Prosper

There is no doubt that car dealers have been going through difficult times in 2008.  This has been a year for testing the strength of car dealers and the dealers that survive will prove to be well-capitalized and well-managed.

Although the used car business has been going through a recession, the franchise dealers have been experiencing a depression.  People that need to purchase a car have been keeping the market alive – it has been a “need” driven market as opposed to a “want’ driven market.  Dealers that have catered to this “need” market have performed, while the new car dealer in the “want” market has experienced difficulty.

The used car dealer has far less overhead than a new dealer and has the flexibility to react to changing inventory needs – this dealer has absolute discretion in what inventory he purchases.  The used car dealers that have that have capitalized these strengths have the management skills to do well in years to come.

We believe Dealers First Affiliates effectively demonstrates a more secure means of reentry into this market for local lenders. Our business model offers a simple and fair way of doing business, and the accessibility and appeal of a hometown setting encourage strong, long term relationships with dealers. Our computer software provides both lender and dealer with concise, pertinent information and can enable you to create a highly competitive profit center within your organization.

Technorati Tags: Floorplan Financing