[January 07, 2009] Anniston Suzuki closing its doors Tweet (The Anniston Star Via Acquire Media NewsEdge) Jan. 7--Owners of Anniston Suzuki confirmed Tuesday the auto dealership's doors were closed for good, citing the economic downturn. George Drakos, co-owner of Suzuki dealerships in Anniston and Birmingham, would not reveal sales numbers but said the dealership, which opened in June 2007, lost what the industry terms "floorplan financing." Dealers rely on floorplan financing to buy vehicles from the manufacturers, according to information provided by Charles Cyrill, spokesman for the National Automobile Dealers Association. The national average for floorplan loans to a dealer is $4.9 million, and dealers collectively hold approximately $100 billion in floorplanned inventory, according to Cyrill. Drakos said the dealership's lenders, whom he would not name, decided to get out of the floorplan lending business. Drakos' firm tried to find other lending sources and avert closing the Anniston dealership but was unable to secure anything sufficient, he said. "All dealers are struggling to maintain their floorplan services right now," Drakos said. Cyrill said those loans are obtained from a variety of sources, including finance companies, national and regional banks, and credit unions. This is the first time in years lenders have clamped down on credit to dealers, said Thomas Dart, president of the Auto Dealers Association of Alabama. To access capital, floorplan lenders bundle dealer floorplan loans together into asset-backed securities, Cyrill said. Until the fall, the market for these securities was healthy and operating well, he said. Cyrill said that, just like mortgage-backed securities, when the lending crisis hit, the securitization market froze up just like other credit markets. The consequent lack of funds caused lenders to run out of money to lend. To combat the problem, the Treasury Department announced Nov. 25 that the Federal Reserve Board would establish the Term Asset-backed securities Loan Facility, a $200 billion credit to help add liquidity to the market. Dart said, however, that Anniston Suzuki may have succumbed to broader market forces that have driven business down statewide. "Business has been pretty slow since mid-October," Dart said. It may not be as bad as the national trend, he said. Dart said he is only aware of three or four dealership closings in the state over the past year. "We're simply not seeing the massive predicted closures of dealership," he said. Still, while vehicles sit unsold on the showroom floor, dealers have their own car payments to make. Drakos said his dealership, at 1401 S. Quintard Ave., employed 16 people. The inventory at the dealership peaked recently at about 250 vehicles and as of the closing date had about 150. The Birmingham location, which maintains between 200 and 400 vehicles in its inventory, will remain open, he said. Customers who recently purchased vehicles can go to the Birmingham location for service and can call 205-853-8553 with any questions. Drakos and business partner Petros Kartos also own several Fish Market Restaurants in the state. The Anniston Suzuki dealership closing has "no bearing" on the restaurants, Drakos said. About Nick Cenegy Nick Cenegy covers the military, Jacksonville and northern Calhoun County for The Star. To see more of The Anniston Star or to subscribe to the newspaper, go to http://www.annistonstar.com/. Copyright (c) 2009, The Anniston Star, Ala. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]