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Tim O'Brien | Jan 18, 2009

Ford Credit Australia's ham-fisted strategy behind its announcement that it is to exit consumer retail finance here, is put into clear perspective by news today from the US.

There, the US Treasury has announced that it will loan US Chrysler's finance arm USD$1.5 billion to finance loans for consumers who want to buy cars from Chrysler dealers.

The reason: to improve Chrysler's ability to lend to prospective buyers. You see – and it's not rocket science – it is easier to sell cars if you can finance buyers into them. And Chrysler US, dragging itself along on the bones of its arse, needs to sell more cars if it is to avoid catastrophe.

Then what, you might ask, is behind Ford Credit Australia's announcement that it is shutting up shop on consumer finance, while retaining its provision of wholesale finance (floorplan) to car dealers?

And if it is easier to sell cars if you can finance buyers into them, why is Ford Credit Australia taking a course of action that is going to make it harder for Ford dealers to sell Ford cars?

Is Ford Australia selling too damn many cars here?

ford-fg-falcon-range1

No. This action by Ford Credit Australia is to put pressure on Ford dealers to secure alternative floorplan financiers (because car dealers normally provide retail finance to customers through their floorplan financier).

Simply put, it is Ford Credit's way of pulling up stumps. In pulling out of retail finance, it has pulled out middle stump on its dealers.

As we said in a previous article on this matter: this action by Ford Credit is part of a two-part strategy, albeit a ham-fisted one, to exit the market in both retail and – later - wholesale finance. It makes no sense otherwise.

The assurances both Ford US and Ford Credit Australia gave Treasurer Swan in December last year that it had no plans to exit, now appear perfectly hollow.

It is time Ford Credit 'came clean' and made its full intentions clear. Ford dealers deserve better; so too do Ford Australia's class-leading cars – the brilliant FG Falcon and Territory.

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