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Credit Crisis, New Car Dealers Call for Leadership from Government

November 24th, 2008
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The Australian Automobile Dealer Association (Vic), the new car division of VACC, is calling on the Federal Government for decisive leadership, and action, to secure a solution to the dealer finance crisis.

The AADA (Vic) is urging Prime Minister, Kevin Rudd, and Treasurer, Wayne Swan, to realise the gravity of the situation and the potential for large scale job losses should a solution not be found.

“The time has come for a decisive lead from the Federal Government on this crisis,” VACC Executive Director, David Purchase said.

“Time is running out for new car dealers. Those affected by the withdrawal of GMAC Financial Services and GE Money have only until December 31, barely five weeks away, to secure wholesale finance for their dealerships. Without it, they will close.

“AADA (Vic) and VACC are calling on the Government to put pressure on the credit providers to extend their 60 day deadline.

“It can take months for a car dealer to secure new credit finance, made worse by the credit crisis affecting financial markets. There are only 37 days left of 2008. Any dealer who needs new finance and does not have it in place by now is at serious risk of closure. This could result in thousands of job losses.

“Drastic times call for drastic measures. This may be the opportunity for Government, credit financiers and dealers to explore new methods of financing the industry:

  • Could new finance be fast-tracked?
  • Can more credit companies, banks and financial institutions be enticed to branch into floorplan finance?
  • Can existing contracts be renegotiated?
  • Can GE and GMAC be prevailed upon to extend the December 31 deadline?
  • Can interest payments be suspended?

“VACC and AADA (Vic) have written to GMAC Financial Services, GE Money, State and Federal Governments laying bare the gravity of the situation. We are exploring every means possible to alleviate this situation.

“We need a solution, and we need it quickly. For that we may need the intervention of Government,” Mr Purchase said.


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