Floorplan financing fosters deeper dealer relationships, Chris Halmy, chief financial officer at Ally Financial Inc., said during the Deutsche Bank Global Financial Services Investor Conference last week.
“There has been a lot of competition in that space, and it doesn’t necessarily have the best ROA,” Halmy said. “But that business is the gateway to the relationship with your dealers, to other products, and to get an application flow.”
Despite losing subvented leasing for General Motors and Buick brand vehicles to General Motors Financial Co. last year, Ally continues to have “pretty nice” floorplan penetration with General Motors and Chrysler dealers,” Halmy said.
Ally also made the decision to go slightly further down the credit spectrum last year, Halmy said. “It was a capital deployment decision, to put on some incremental, nonprime assets, and a lot of that was in response to our lease book rolling off,” he said. “The place to deploy that capital, that had equal profitability to some of the leases, was really in that nonprime sector.”
