Rudd government acts in Australian car dealer finance crisis.
Australia’s federal treasurer, Wayne Swan, today threw a lifeline to car dealers hit by the withdrawal of the two major industry financiers.
Swann announced the establishment of a Special Purpose Vehicle (SPV), with support from leading Australian banks, to provide liquidity to car dealers and car dealer financiers. The SPV goes live on January 1, 2009.
“This is most welcome news for new car dealers, in particular, and the Australian economy as a whole,” says Victorian Automotive Chamber of Commerce executive director, David Purchase.
“The Australian Automobile Dealer Association (Victoria), the new car division of the VACC, has been working hard to assist dealers since GE Money and GMAC announced they were withdrawing from motor floorplan finance.
“Today’s outcome is a creative solution to the problem, and the federal government and banks involved are to be commended.”
The rescue package follows the announcement by major dealer financiers, GE Money and GMAC that they were withdrawing because of the worsening world economy. Dealers had until December 31 to try to find alternative sources of finance.
Purchase says the 60-day notice period provided by GMAC and GE Money was too short, and the VACC was among the many voices calling for a deadline extension.
“The SPV, with the support of ANZ, Commonwealth Bank, NAB and Westpac, and with technical support to be provided by Credit Suisse, will allow viable dealerships who were affected by the withdrawal of GE and GMAC, to keep trading.
“It will operate for a period of 12 months and enable dealers to establish permanent solutions within a reasonable time-frame.
“(We) will continue to work with our new and used car dealers to ensure they are well-equipped to ride out this economic slowdown.”