PLANO, Texas — Tough competition in the floorplan business will likely cause General Motors Financial to fall short of a five-year goal to reach a 20% dealer penetration rate, according to Brian Fallon, the captive’s senior vice president of commercial lending services.
GMF’s commercial lending floorplan business — which launched in April 2012 — has 700 dealers in its North American network, with a penetration rate of 14%.
Floorplan is “very competitive from a rate perspective, which is causing everyone to fight for the business or hold onto it,” Fallon told AFN. “With the floorplan business, dealers are typically loyal to their lender.”
It is easier to get the large dealer groups to switch over to GMF’s floorplan business, but smaller groups are very “relationship-based,” he added. “Rate has something to do with it, but what you do on the retail and lease side, consumer and commercial, that all plays a part.”
While the captive is not on track to hit the 20% mark, “we’re happy we are going to be right near it,” he said. “It’s not like anything changes by not hitting that.”
