Ford Motor Co. of Australia Ltd.’s credit arm receives A$230 million ($209 million) in taxpayer backing from a special government fund to provide liquidity to dealer-lending firms.
The Australian newspaper says FCA Holdings Ltd., operating as Ford Credit, is the sole beneficiary of the A$2 billion ($1.8 billion) federal guarantee to help car dealerships secure financing.
The Car Dealer Financing Special Purpose Vehicle program originally was established to prevent the collapse of dealerships when private lending began to evaporate in the heat of the global financial meltdown.
The fund, dubbed OzCar, was created after GMAC Financial Services LLC and GE Capital Finance Australasia Pty Ltd. (GE Money) quit vehicle financing in Australia and New Zealand.
Ford Credit will use OzCar financing to lend money to more than 90 Ford and Volvo brand dealers. The newspaper reports the federal government has downgraded the size of the OzCar scheme to A$450 million ($408 million).
Ford Credit ceased offering retail loans and leases in February but said it was still servicing and collecting on an outstanding loan portfolio of some 67,000 customers with a receivable value of A$1.3 billion ($1.1 billion).
Managing Director Greg Cohen told the Australian Senate’s Economics Legislation Committee in June the government guarantee was critical to the future of Ford Credit’s operations.
With the government’s industry finance guarantee legislation, the company decided to continue offering wholesale financing to dealers.
