More bad news concerning the local car industry has hit the headlines today, with the announcement that Ford Credit is pulling out of retail financing (financing cars for private buyers) in Australia, with some in the banking sector expecting its involvement in wholesale finance (financing cars for dealers) to meet a similar fate in the future.
The announcement was made to staff of Ford Credit and car dealers at Melbourne Airport during a lunchtime meeting and follows similar decisions made by GE Money and GMAC late in 2008, who both pulled out of retail and wholesale financing in Australia.
"This was a difficult but necessary decision," said Libbey Meredith, a spokeswoman for Ford Motor Credit in Detroit.
The decision not to continue financing private car buyers will take effect from February 28, meaning that dealers will have six weeks to make alternative arrangements. Ford Creditâ€™s decision will also impact Volvo, Jaguar, LandRover and Mazda dealerships, and will see around 160 Ford Credit staff lose their jobs.
Ford dealers have understandably, had little positive to say about the decision, with some claiming that they will be selling rival Japanese and Korean models before the end of the year.
"I'll be selling Mitsubishis and Toyotas by the end of the year, and I reckon about a third of Ford dealerships around the country are thinking the same thing. The company is falling into disarray, and customers just don't want the Ford product," The owner of one of Melbourne's largest Ford dealerships told The Age
Once again, it is the country dealers who will be hardest hit, as they simply do not have the sales turn-over to enable them to find an alternative financier.
It was only in December that Treasurer Wayne Swan said that Ford in the US and Australia had confirmed that Ford Credit remain in Australia and continue to provide financing services for its dealer network.
[Source: The Age]