DETROIT -- GM Financial will take on floorplan stalwart Ally Financial by offering General Motors dealers another option to finance new inventory. GM Financial CEO Dan Berce said last week that the company will offer wholesale financing by year end. It will test the floorplan program with a handful of dealers and roll it out nationally in 2012.
Last fall GM acquired GM Financial, formerly AmeriCredit, which specialized in auto loans to people with poor credit. Since then GM has expanded the company to offer leases to prime-risk customers.
GM Financial has 3,200 employees and a loan portfolio of about $9 billion. Last quarter about 40 percent of its loans were to GM customers. It continues to provide subprime loans to customers of non-GM dealers.
More than 70 percent of GM dealers use Ally to finance new inventory. Ally was GM's captive when Ally was known as GMAC. Berce says GM Financial's entry into that market will create competition that could result in better rates and terms.
GM hasn't run a full-scale auto lending operation since 2006, when it sold a majority stake of the former GMAC Inc., which is now Ally. GM executives have said the automaker would like to give dealers more options for financing new-vehicle inventory.
Berce foresees GM Financial providing floorplan financing to 10 to 20 percent of GM dealers. He said the goal is to lessen GM dealers' heavy reliance on one lender.
"If for some reason Ally all of a sudden wakes up and they don't like 20 percent of the dealers they floorplan, or maybe they get bought by a big bank who doesn't like the business, GM is left holding the bag," Berce said.
Ally spokeswoman Sue Mallino declined to comment directly on GM Financial's plans.
"The wholesale floorplan business is very competitive, and dealers have many choices," she said. "We are pleased that many GM dealers continue to choose to floorplan with us."