DETROIT -- In a bid to bolster its floorplan business, Ford Motor Credit Co. is pushing a new batch of incentives to get dealers to switch from other lenders.
Ford Credit field representatives want to meet with all Ford dealers before the end of the first quarter to make their pitch. The stronger push from Ford Credit comes as the captive lender's share of the wholesale finance business has slipped slightly and as banks are offering rates that are lower than Ford's, dealer and Ford Credit sources say.
George Gorno, chairman of the Ford national dealer council's Ford Credit committee, took the unusual move of sending a letter to the dealer body at the end of January. Its message? Floorplan with Ford Credit because what's good for Ford is good for the dealers.
"There's no arm-twisting," Gorno, president of Gorno Ford in Woodhaven, Mich., said in an interview. "This is strictly a dealer decision, but they need to know that a lot of our new products evolve from dividends from the credit company. Sheet metal sells."
Gorno's letter says Ford Credit has contributed $10.5 billion in dividends to Ford Motor Co. during the past 33 months.
Through the first nine months of 2005, Ford Credit's share of the Ford, Lincoln and Mercury wholesale or floorplan business was 81 percent, according to Ford Credit. That was down from 84 percent during the same period in 2004.
There is no hard target for increasing share, but A.J. Wagner, Ford Credit's president of North America, would like to see it jump to 90 percent or more. Wholesale financing accounts are less volatile than retail contracts, he said.
"It's a good core business for us," Wagner said. "If we have that business, we can buy (loans) more aggressively on the retail side."
But some dealers say they haven't floorplanned with Ford Credit because its rates aren't as good as those of local banks. The rate spread can be as much as two percentage points, some dealers said.