Credit Australia Ltd. is ending financing for retail car buyers starting Feb. 28.
The Age newspaper in Melbourne saysCredit staff and car dealers from across the country recently met at Melbourne Airport, where they were told of the decision. The firm finances 10% of Ford Australia’s retail sales.
There is no immediate comment from the auto maker in Australia, but the newspaper quotes Libbey Meredith, a spokeswoman for Ford Motor Credit Co. in Detroit, as saying, “This was a difficult but necessary decision.”
Meredith tells Ward’s the move is consistent with Ford Credit’s plan to continue to support wholesale financing in Australia for existing dealers,
However, The Age reports many dealers are considering switching to rival Japanese and South Korean manufacturers and will stop selling Fords. Ford Credit’s decision also affects Volvo, Land Rover, Jaguar anddealerships.
GMAC Financial Services LLC and GE Capital Finance Australia Pty Ltd. (GE Money) quit vehicle financing in Australia and New Zealand at the end of 2008. As a result, the Australian government announced a A$2 billion ($1.32 billion) trust to provide loans to car dealers.
Ford Credit was incorporated in Australia in November 1971 and is a wholly owned subsidiary of Ford Credit in the U.S.
About 160 staff employed by the firm’s retail-finance department will lose their jobs. Only 40 workers from Ford Credit’s wholesale-finance department will remain.
A banking source tells The Age the decision is a “precursor” to Ford Credit pulling out of wholesale finance in Australia, as well, noting Ford dealers will be forced to close if they cannot finance their floor plans.
Ford Australia sold 104,715 vehicles last year.