50 HOLDEN Dealers to Close Down ?

[csv8]

GENERAL Motors' finance arm is to shut down its Australian and New Zealand business, costing 185 jobs and putting a question mark over the operation of about 400 car dealers nationwide.

GMAC, which has operated in Australia since 1926, will close the division by the end of the year and wind up its local loan book, worth about $2.6 billion.

"We're going to cease retail and wholesale vehicle financing in Australia and New Zealand," GMAC spokeswoman Tina Proia said.

She said GMAC had decided to abandon Australia because of funding woes brought on by the global credit crisis.

In the US, the struggling company has slashed new lending and demanded dealers start paying off the full amount of loans over floor stock.

Adding to the sector's woes, the finance arm of multinational GE is winding down its Australian motor finance book.

GM, which trades in Australia as Holden, holds 49 per cent of GMAC after selling 51 per cent to a consortium led by private equity outfit Cerberus Capital in 2006.

About 160 staff in Australia and 25 in New Zealand are to be made redundant.

In addition to consumer finance, GMAC provides the wholesale motor finance dealers use to buy their display stock.

Those dealers will have to find new finance or repay the capital amount -- a potentially ruinous scenario for smaller dealers lacking in cash flow.

It is believed GMAC services about 50 of the 265 Holden dealers in Australia.

[charles_wif_xf]

Sheesh...

Very interesting times ahead in the automotive industry

[smally289]

Weird set up if the dealers have to pay for floor stock. When I was with Ford the dealer didn't pay for the cars until they were sold. That was a couple of years ago though and things may have changed.

[loony888]

floorplan is cool for a dealer, they get cars from the manufacturer for a predetermined period, usually 90 days and if it's still unsold after that time they start paying interest only on the invoice price. some smaller dealers even have to back pay from the date the car was received but bigger dealerships usually avoid this. the amount of finance they sell with their cars empowers them to get a better deal, that and the commision they get makes it easy to understand why they push it down your throat when you look at buying.
There's going to be a lot of floorstock deals to be had, and not just holden dealers, i'll bet this is the tip of the iceberg because GE is involved somehow and they aren't brand loyal, they have their fingers in a lot of pies. we're up for a rollercoaster ride now!! ooohh boy!


paul.

[Laminge]

GE have run out of funds and are not taking on new dealerships, which leaves Esanda, interesting times indeed.

[outback_ute]

I heard a bit about this yesterday, I don't remember exactly, but the dealerships only have a month or a fortnight to get new finance in place

[Smoke Pursuit]

Esanda and St George will be the only ones doing dealer floor plan.

There is talk however that if the Westpac / St George Merger goes ahead that Westpac will go back into floor plan financing.

AGC (which was taken over by westpac) was big in floor plan, which was subsequently sold off to GE... Now GE is gone who knows what will happen.

I think we will see some dealerships closing / desizing their operations in the coming months..

[Jason[98.EL]]

how does this play out for those that have a private vehicle finance with ge

i have me el with them and this is all making me worried

Jason

[FGII-XR6]

the car companies get paid as soon as the cars are dispached the cars are on a "floor plan" finance package which is offset by finance written by the dealer on new sales . if enough finance goes through their floor plan costs are zero

Originally Posted by smally351

Weird set up if the dealers have to pay for floor stock. When I was with Ford the dealer didn't pay for the cars until they were sold. That was a couple of years ago though and things may have changed.

[Laminge]

Originally Posted by Grimus

how does this play out for those that have a private vehicle finance with ge

i have me el with them and this is all making me worried

Jason

We are talking about dealerships with $1M plus facilities to buy cars, not Joe.....

What the flow on effect will be is an increase price in new cars and turnaround times on 2nd hand cars to below 30 days, should see a reduction in the 2nd hand car market even further to what it is today

[Jason[98.EL]]

thanks garry

i thought that was what it was but wasnt sure

Grimus

[rodderz]

I wonder how Ford Credit will be affected, they could be in the same boat

[yift]

from what i read somewhere on the net ford credit is in the safe zone.

[woteva]

How do you get 50 dealerships to close from that article? GMAC pulling out? So what! They'll find someone else to do their finance.

[Laminge]

Originally Posted by woteva

How do you get 50 dealerships to close from that article? GMAC pulling out? So what! They'll find someone else to do their finance.

Please do share, who?

[Laminge]

Something of interest, looks like Ford Credit is either going to be bailed or shut.

US equities continue to slide lower…down 6% in total over last two days. Let us all remember with gratitude the 1999 book Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market. The blurb from the authors: "Glassman and Hassett believe that both investors and official commentators have misperceived stocks as a risky investment which should require a premium return, when compared to ‘safe’ investments such as government bonds." The Dow is currently at 8175, the recent peak about 15700 - "Dow 36,000" now a book-shop curiosity or being used at your local fish-and-chip shop as wrapper! The big USA auto-maker finance arms (GMAC, Ford Credit and Chrysler Financial) apparently next in line to require a govt bail-out. Oil 62.8, gold 736, Eur 1.25, Jpy 92.9, Gbp 1.557 and aussie 0.602. Various Central Banks believed to be in the currency markets selling USD after its amazing run higher at the expense of all others. This RBA intervention is known in the trade as "smoothing" rather than "manipulating" exchange rates. RBA meeting next week…..market seems to be pricing in 1% rate-cut. Logic check: usually nothing happens at Dec meeting; RBA Cash 6% today; a 90 day bank bill to be exchanged in mid-Dec currently yields 4.7%; therefore RBA Cash must go to 5% pretty quick-smart?? We'll see next week how many errors of logic I have just documented!!

[snakeoil]

No car ever leaves a factory without being paid for( ie Floorplan)
Some dealers do have the cash to pay for the cars at the gate but historically they are in the minority
GMAC is sadly going down Ford credit will in all likely hood follow
AC Delco is now on the market
How it will all pan out is unknown but what I do know is that the financial geniuses who rebirthed sub prime lending ( these people are called financial advisors) and remember its not just houses should be taken out to the nearest road and run over.......several times Holden or Ford matters not ( on this Occassion)

As Gordon Gecko once said "Greed is good"

My advice........... if you want the product in your garage buy it now and show the financial advisers that they have got it all wrong and that their is a core fundamental here.

This in my view is why a Phase 111 is not worth 1 million dollars its a just a Falcon

Same people same mindset

Cheers

[Smoke Pursuit]

Ford credit have already died in the , alot of Ford dealers have ditched Ford credit in the last 18 months and gone with Esanda.

Ford credit will be the next.

[snakeoil]

Thanks BFii
the sad part is that Ford and GM invented affordable cars