Australian auto dealerships have not yet used a special government-negotiated A$2 billion ($1.29 billion) fund, called the Special Purpose Vehicle (SPV), to obtain credit for wholesale vehicle purchases.
The special fund was created after GMAC Financial Services LLC and GE Capital Finance Australia Pty Ltd. (GE Money) announced they were quitting wholesale vehicle financing in Australia and New Zealand.
The two firms, combined, provided about A$2 billion of wholesale financing. Their departure left up to 500 dealerships struggling to refinance their floorplans.
The government’s SPV fund involveds Australia’s four largest banks creating a A$2 billion trust for loans to dealerships backed by a federal guarantee.
But Industry Minister Kim Carr tells The Australian newspaper there have been no claims for assistance. “(The fund) aimed to inject confidence into the market, and it has done that,” he says.
The Motor Trades Association of Australia tells the newspaper about 300 dealers have found financiers without using government money, but it may be tapped by about 100 dealers still seeking loan assistance.
Motor Trades CEO Michael Delaney says the government move has succeeded. “It has re-liquefied this market without being called upon.”
Victorian Automobile Chamber of Commerce CEO David Purchase tells The Age the fact the fund was not drawn upon is a measure of its success. “It has returned confidence to this market, which is exactly what it was intended to do.”
But Purchase is concerned at the number of regional car dealerships yet to find new credit lenders. If they were to close, he says, entire communities would be left without any dealerships.