Inventory Floor Planning Solutions

Diana Kurylko
Automotive News Europe
March 23, 2009 06:01 CET

MAHWAH, New Jersey — Jaguar and Land Rover executives say they are guiding dealers to alternative sources of floorplan financing, but those who are not approved by Chase Auto Finance ultimately are on their own.

Ford Motor Co., which sold Jaguar and Land Rover last June to Tata Motors for $2.3 billion (about €1.5 billion at the time of the sale), will stop inventory lending to the brands through Ford Motor Credit on June 1.

Since January, Chase has been providing retail financing for Jaguar and Land Rover dealers but is handling floorplan financing with dealers on an individual basis.

Sharon Corrigan, vice president of retail operations for Jaguar Land Rover NA LLC, said dealers must “come to terms with and find their sources” of inventory financing.

Jaguar and Land Rover have 174 franchises each. A company spokesman said that only 80 were relying on Ford Motor Credit for credit.

“Of those, 52 have not yet achieved a new source of finance, and they are all working with other sources, including Chase,” the spokesman said in an e-mail. “We know banks that are lending money, and we are providing [the names of] those banks to dealers.”

In interview last week, top Jaguar and Land Rover executives said “virtually all,” dealers will find inventory financing.

Their optimism isn’t shared by the National Automobile Dealers Association. Last month, NADA asked the government to consider loan guarantees for dealer inventory financing.

“Even creditworthy dealers are having trouble finding access to any floorplan financing, or the financing available to them is being offered on terms that are not competitive and not commensurate with the risk,” according to an NADA fact sheet.

NADA says the average floorplan loan is about $4.9 million.

Full Story at Automotive News

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