Ally Counts on Inventory Drop to Reduce Floorplan Balances by Midyear | Auto Finance News | Auto Finance News

Ally Counts on Inventory Drop to Reduce Floorplan Balances by Midyear

Ally Financial Inc.’s floorplan outstandings climbed in the first quarter, but are expected to drop by midyear, according to Chief Financial Officer Chris Halmy. The $4 billion increase — to $35.4 billion — was primarily due to higher dealer inventory levels and an increase in higher priced vehicles, such as trucks and sport-utility vehicles, the company stated in its 10-Q filed in early April.

Ally expects floorplan balances to come down “a couple of billion dollars, as we get into the middle of the year,” Halmy said during Ally’s earnings call in late April. “We are obviously hoping that OEMs stick to what they said and close down some of their production plants for
retooling,” Halmy said, “which we think will be the right thing to do and really help the overall dealer lots.”

As some lenders have chosen to reduce retail financing, Ally will continue to support dealers as a full-service provider — including as a new and used floorplan financier, Tim Russi, president of Ally Auto, told AFN. Although the dynamics in retail vehicle sales volume do not typically have a “significant impact on the floorplan lending
market,” the company has demonstrated its commitment to dealers during many business cycles, he said.

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