Ally Bank 2012 Annual Report Download - page 44

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Total commercial wholesale revenue of our Automotive Finance operations was $999 million, $976 million, and $909 million in 2012,
2011, and 2010, respectively.
Commercial Wholesale Financing Volume
The following table summarizes the average balances of our commercial wholesale floorplan finance receivables of new and used
vehicles and share of dealer inventory in the United States.
Average balance % Share of
dealer inventory
Year ended December 31, ($ in millions)2012 2011 2010 2012 2011 2010
GM new vehicles (a) $ 15,331 $ 13,407 $ 10,941 71 78 82
Chrysler new vehicles (a) 6,693 6,228 4,665 58 67 72
Other non-GM / Chrysler new vehicles 2,230 1,844 1,704
Used vehicles 2,985 2,920 2,727
Total commercial wholesale finance receivables $ 27,239 $ 24,399 $ 20,037
(a) Share of dealer inventory based on a 13 month average of dealer inventory (excludes in-transit units).
Commercial wholesale financing average volume increased during 2012, compared to 2011, primarily due to growing dealer inventories
required to support increasing automobile sales. GM and Chrysler wholesale penetration decreased during 2012, compared to 2011, as a result
of increased competition in the wholesale marketplace.
Other Commercial Automotive Financing
We also provide other forms of commercial financing for the automotive industry including automotive dealer term loans and automotive
fleet financing. Automotive dealer term loans are loans that we make to dealers to finance other aspects of the dealership business. These
loans are typically secured by real estate, other dealership assets, and are personally guaranteed by the individual owners of the dealership.
Automotive fleet financing may be obtained by dealers, their affiliates, and other companies and be used to purchase vehicles, which they
lease or rent to others.
Servicing and Monitoring
We service all of the wholesale credit lines in our portfolio and the wholesale automotive finance receivables that we have securitized. A
statement setting forth billing and account information is distributed on a monthly basis to each dealer. Interest and other nonprincipal charges
are billed in arrears and are required to be paid immediately upon receipt of the monthly billing statement. Generally, dealers remit payments
to us through wire transfer transactions initiated by the dealer through a secure web application.
Dealers are assigned a risk rating based on various factors, including capital sufficiency, operating performance, financial outlook, and
credit and payment history. The risk rating affects the amount of the line of credit, the determination of further advances, and the management
of the account. We monitor the level of borrowing under each dealer's account daily. When a dealer's balance exceeds the credit line, we may
temporarily suspend the granting of additional credit or increase the dealer's credit line or take other actions following evaluation and analysis
of the dealer's financial condition and the cause of the excess.
We periodically inspect and verify the existence of dealer vehicle inventories. The timing of the verifications varies, and ordinarily no
advance notice is given to the dealer. Among other things, verifications are intended to determine dealer compliance with the financing
agreement and confirm the status of our collateral.
Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10-K