Dealer floorplan ABS losses currently remain low, with performance metrics within range of historical levels. U.S. dealer networks have been exhibiting some stability and improvement in certain areas since the middle of last year. With the U.S. economy and auto industry stabilizing, automobile sales have picked up, all contributing to higher dealer profits as dealership costs declined, a notable change from the tremendous stress that dealerships were feeling in 2008 and the first half of 2009.
Following several years of mounting pressures, the financial condition of U.S. auto dealers is recovering, albeit slowly, as the majority of dealers recorded a profitable 2009. This bodes well for the overall performance of U.S. dealer floorplan ABS in 2010. U.S. auto dealer networks appeared to have reversed course financially starting in the second half of 2009, coinciding with the U.S. economy stabilizing and showing signs of improvement.