What is Dealer Floor Plan Financing?

The US Automotive Market in 2008

It seems like every day more and more people are talking about a probable US recession in 2008.  As a result businesses in every industry are exploring the potential repercussions of an economic slowdown.  The automotive industry is one sector that will certainly not be immune to a downturn in consumer spending.  However, the industry may be better prepared than other sectors due to its recent history.  Over the past 5 years many of the US manufacturers have been reengineering their business models to account for the rebalancing of market share that has occurred between domestic and foreign brands.   Many believe that the worst of the transition is over, but the market dynamics are poised to shift once again.  Throughout the past few weeks a number of noteworthy equity analysts at major securities firms have lowered their 2008 forecasts for US auto sales.  Sales projections have been revised downward from bullish estimates of 17 million new vehicles down to lower forecasts closer to 15 million new units.   When times get tough in the automotive industry, much of the attention focuses on the Big 3 OEMs and their Tier 1 suppliers.  But the retail dealerships who sell the vehicles to end consumers struggle as well.

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