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Ford Credit pulls retail pin in Australia

By Matt Brogan |

2:30pm – Updated with Statement from Ford

Ford Credit will pull the pin on its retail finance division in Australia come February with over 160 staff expected to lose their jobs.

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The decision, which comes as the Australian car industry faces its worst sales performance in 30 years, means private (retail) car buyers will no longer be able to seek finance from the company directly.

Volvo, Land Rover, Jaguar and Mazda dealerships which use the retail finance will also be affected, while regional dealerships who depend on Ford Credit for retail finance will be hit hard.

We spoke with Ford spokeswoman Meredith Libbey in Detroit a short while ago who provided us with the following statement:

Ford Credit Australia told its employees and dealers that it has made the strategic decision to cease retail financing in the Australian market. To allow dealers time to select new finance providers in Australia, FCA will originate retail business until 28 February 2009. Ford Credit Australia will continue to service and collect on existing accounts as it winds down the current portfolio over an extended period.

This was a difficult, but necessary, decision. Australia has a well developed financial services marketplace and other companies are expected to provide financing for retail customers. Ford Credit Australia finances about 10 percent of Ford retail sales in Australia.

This decision does not affect Ford Motor Company operations in Australia and it does not affect Ford Credit customers, who should continue to make their account payments in their usual manner. Ford Credit is continuing to support existing dealers’ wholesale financing arrangements and is studying the federal government’s funding vehicle, also for wholesale financing, that was announced last month.

Ford Credit Australia’s employees are highly-skilled financial services professionals who have been dedicated to providing outstanding service to dealers and customers throughout the organisation’s proud history. Employees will be offered separation payments, outplacement assistance and time away from their duties to interview for other jobs as their positions’ end dates near. Some employees will continue with the company for years to service customer accounts; 115 employees will continue beyond 2009.


 
  • JasonP

    These sorts of events hurt the Austalian Motor Industry more than you’d think.

    Any Lender (such as the Banks), stepping in to take up the slack, can pick & choose the cream of the clients out there, be they Dealerships, or Car Buyers.

    That leaves the rest in the lurch.

    No, you shouldn’t lend to everyone, but you shouldn’t only favour the top few either.

    Eventually, these Lenders will need to lend again to others perhaps less credit worthy, & they’ll come begging.

    Remember how the treated the Australian Motor Industry when GE Money, GMAC, & Ford Credit want to enter our market again in a few years time.

  • Wheelnut

    Who’s gonna be the Major Sponsor on Mark Winterbottoms car then?

  • Ian

    Once again negative reporting of anything FORD yet the CEO of GM calls for higher fuel taxes and nothing is said!
    Also unlike GM and crysler, Ford has not taken the government hand out like GM-yet all people can do is stick the knife in , i don’t want to see ford or holden fail we need both of them, lets concentrate on the positive ford thing like you do with holden then maybe just maybe ford might get the credit it deserves, oh and to HSV the BF was a better car than the VE just not advertised or brain washed into people, love the holden marketing department 5 star marks to them, but the VE is not as good as you may think.

  • Howie-VL

    Didn’t they win the V8′s this year HSV?

  • Dan

    @HSV
    Your just another Holden loving, Ford hating, egotistical un-Australian fool. Australia needs Holden & Ford equally. Get over your-self and your Commodore.
    Dan.

  • Ian

    although i agree with you howie, not really a card we can pull on them, yes this year and it sould have been last year as well but todd took jamie out in new zealand and the year before well we all know about rick, well it’s an argument that will never finnish and each side thinks they are the better, i am a huge ford man, but have a healthy respect for the foe, but one must chose his targets wisely,.

  • JasonP

    I don’t think the report was too negative, was it?
    They’ve pulled out, as have GMAC & GE Money.

    Bob Lutz isn’t CEO of GM, & he wasn’t calling for higher fuel taxes, just suggesting that’s one way the US Gov’t could go.

    The situation is different in the US, where their fuel price is apparently only a little higher than half what it is here.

    I don’t see HSVs comments above; perhaps they’ve been moderated…..

    I own a VE SS, & I do think it is a Great Car.

    I’m not really a Turbo kinda guy, & the XR8 just doesn’t compete.

  • WVB

    So the Tata dealership brands of Jaguar & Landrover still use Ford’s credit facilities do they? That’s convenient.

  • Andrew

    In my personal experience Jaguar/Landrover do not use Ford Credit but that of a large Australian bank.

  • Sinead McAlary

    I just wanted to clarify that Ford Credit isn’t closing up in Australia – the company is ceasing its retail / consumer financing but will continue to provide wholesale financing for dealers. This is different to GMAC and GE which ceased operations entirely. As Ford Credit currently only provides retail financing for approximately 10% of Ford sales in Australia, we expect that customers will be able to find alternative providers for their car loans relatively easily. Sinead McAlary, Public Affairs Manager for Ford Australia

  • JasonP

    This is better news; they will still do Floorplan Financing for some dealers.

    But, only 10% of Fords sold use Ford Credit?

    Not exactly huge market penetration is it?

    The Lions Share (no pun intended) of car financing must be through Esanda, CBFC, St George, & previously AGC (now GE Money).

    Good to see Ford Staff following the blogs.

    By the way Sinead, those Fiesta ads on another website (let’s call it Spasales.com.au) are incredibly annoying.

    You just missed me; I bought a Mazda 2 in Oct 08.

  • Ian

    Good to see jason you both a mazda 2 and a ve ss(nice car),don’t care who said just making a point that if it’s negative-ford cop it , if it’s positive it’s mainly about holden, all people need to put thier harts to the side for a moment and look at the bigger picture, my friend has a ve ss and i agree that it is a very nice car,but the rest of the family all have ba & bf falcons, and even my holden buddys agree the ve isn’t as good as holden tell you it is,

  • Ian

    p.s jason i think you will find the XR8 does compete very well.
    p.s if that is really the public affairs manager for ford- tell you marketing people to give me a call and i will put a ford in every home.

  • JasonP

    Wheelnut,

    FYI.

    Cheers.

    Ford Credit had already decided last year to discontinue its sponsorship of the Ford Performance Racing V8 Supercar Falcon driven by Mark Winterbottom. It will be replaced for the 2009 season by the WesTRAC CAT heavy equipment company.

  • Scrap Metal

    Sinead McAlary…thank you for clearing that up because as usual the headlines are worng. “Ford jobs to go” was what I read so as usual the Ford bashing continues. I read a dealers comments that he will be selling Mitsubishis and Toyoyas by the end of the year…..does the Ford dealer network know that floor plan financing is continuing ?

  • Phil C

    Sinead McAlary, it\’s great to see you on here! Ford really need to lift their perception out there in the market and misinformation is rife. So thanks for the clarity.

    If you could talk to Jez Spinks about his bias with the recent stories that other place had run it would be much appreciated. ie GM cancels the RWD platform and he says commodore future cemented. Ford says it’s postponing the the GRWD platform and he says Falcon’s days are numbered…

  • Sinead McAlary

    I share your frustration at times – believe me! Unfortunately, the “general” media goes for the headlines and the Ford name is so well known that when anything happens relating to us, it gets a lot of attention. That works in our favour at other times too though so it’s important to remember that as well. As for our dealers, Ford Credit brought all their dealers to Melbourne yesterday to explain the decision to them in person so they are all aware and most are very understanding.

  • Marcus

    So Sinead, doesn’t look good this scaling down of Ford Credit and all those job losses, don’t lose sight of that fact.
    There will be families hurt by this decision.
    And if the credit crisis gets any worse, is there any guarantee Ford Credit won’t close down altogether ?

  • Scrap Metal

    I am tired of people whining on about job losses in the car industry. There is a simple fix to it……..dont buy imported cars …buy locally made and designed cars. Its so simple…….I have never and will never buy an imported car, Ford or otherwise while we have great cars, like my FG XR6 Turbo ute, made here. Its time we supported our own industries and secured their future. We cant just leave it up to the government ………..

  • Escort_Ghia

    here a better fix take the luxury car tax off local built car and make it larger on imported cars

  • Wheelnut

    The fact of the matter in relation to Fords job losses is that as robots and computer technology has more and more involvement in the design manufacture of a modern motor car in order to improve build quality and reliability [which both Ford and Holden have done over the years] there will be more job losses as less manual labour is required.

    However;if Ford and Holden start when they start building new Focus and Cruze some of the workers would be retained and re-trained to help build them.. maybe even more in the future.

    Unfortunately though Ford Oz has received another kick in the guts by Detroit as they Have decided to cease using our RWD expertise in building the new RWD cars. Although that could change just like the decision to stop production of the Falcons iconic I6 engine did

  • Wheelnut

    Thanks for that Jason P.

  • Wheelnut

    After buying a Home; buying a car is the second biggest purchase most people will make in their lives and just like buying a Home most people will need some sort of finance or assistance in order to fund the purchase.

    Car companies and their dealerships are in the business of making money which they do primarily through selling cars [as well as charging like a wounded bull for various options]

    Therefore; in order to sell cars dealers will often do whatever they can to make a sale and will help their customers find the required finance.

  • Wheelnut

    Howie VL: Although Holden won the final Round Last Year at Oran Park – Ford Won the V8 Supercar Championship

  • Wheelnut

    I agree with you Escort – we are the only country that has been and is continuing to reduce tariffs not only on cars but other imported products
    Because John Howard had a brain Snap and signed up to a number of free-trade agreements. which required both parties to reduce tariffs.. as yet we are the only ones to do so.

    And thanks to a half a–ed report into the Australian Automotive Industry by Steve Bracks [WTF does he know about cars?] the K-Rudd Govt has decided to reduce it to 5% by the end of next year

    As a result we are at risk of becoming a dumping ground for companies who are unable to sell excess stock elsewhere in the world.

  • SamR

    Scrap Metal Says: “dont buy imported cars …buy locally made and designed cars. Its so simple…….I have never and will never buy an imported car,”

    OK I am after a two litre hatchback what should I buy?

    I don’t what a big fat Commodore or Falcon

  • Andrew M

    Wheelnut,
    and just to add further to what “JasonP” has said…..

    FPR have announced an increased budget despite the withdrawl of ford credit, and despite others struggling to find sponsors due to this economic climate.

    Good to hear from you Sinead.
    Its nice to know our thoughts are heard.
    If only more people in such positions as yourself interacted with the “people” a little more.

  • Cupid Stunt

    I think the number of staff indicate the size of the business, only 160 job losses is nothing to worry about. If they can’t borrow money themselves then they don’t have money to lend then presumably they they don’t really have a business. This global downturn is only really sorting the chaff from the wheat as they say.Its a hard world.

  • BJ

    It won’t make any difference to our local Ford Dealer; they closed their doors permanently on 31 December 2008. One of the guys who lost his job said to me that the cars are “impossible to sell”.

  • JasonP

    You’d have to agree though, that Ford have under performed in the Focus & Fiesta classes.

    I’m a Holden tragic, so this isn’t an attack on Ford. The current Barina/Viva/Epica trio are an embarrassment.

    But equally, with better products than most (Fiesta & Focus), they haven’t really had the sales they deserve.

    Focus supply problems, etc haven’t helped.

    Goes to show, even with better, Euro sourced product, you can’t guarrantee sales.

    I really think the Fiesta will kick goals, but they need to lift monthly figures from around 500 units to even dent the 2000 plus that Yaris regularly does.

  • John T

    True JasonP, but at least Ford isn’t rubbishing their reputation as much as Holden is with their small car line-up. Usually it only takes one bad car experience to turn a customer off a particular brand for a long time. How many people have you heard that’ll say ‘I’ll never buy Ford again, I had a EA falcon that broke down all the time’ or something to that effect. Ford probably won’t have great sales with its euro sourced cars, but there current owners are probably happier with their choice and less likely to boycott Ford in the future. Reputations take a long time to rebuild, and I think Holden will regret their targetting of sales over quality in 5 years time. When all the 05 Barina owners eventually replace their car, will they want to go Holden? Doubt it.

  • Scrap Metal

    SamR……..you see ? you just showed the selfish attitude i was talking about !! Its about making a small sacrifice for the future of the industry in this country not your selfish wants. Anyway …..go drive an FG Falcon and then see what the “sarifice” is. Maybe ………thats maybe a few extra dollars in fuel but that is well and truly made up by the great drive and comfort of the car which no imported 4 cylinder can match. You are one of those people who whinge about things but arent prepared to do anything about it.

  • MB

    Typical American company response, why bandage a wound when you can chop off the arm.

    No big deal finance will be done via Esanda or Capital or if you are a typical bogan Ford driver you will need some sort of non conforming loan due to your adverse credit history so go via Liberty

  • BJ

    I doubt that many people will purchase a Falcodore for no reason other than to support the local industry. Its just unrealistic.

  • Scrap Metal

    BJ……well that is what is needed and not just for the car industry. People are unrealistic if they think the car industry or any other can survive without our support. And guess who will cry like a baby when they lose their job……

    Dick Smith has been trying to get this support for Aussie made products for years but people wont listen……then they sook when they are out of a job……….like i said before ..its just so simple………

  • BJ

    I really don’t think the majority of people care if the industry survives in Australia. Most realise that it relies upon tax-payer funded subsidies in form of direct assistance, tariff protection and substantial government purchases to survive and isn’t viable without them.

  • MB

    I support the local motor industry, I buy German cars and they have a presence here with Bosch who employ alot of people in Clayton.

    Sinead McAlary and Ford have a histroy of using the media to their advantage when it suits their cause or wish to justify line slowdowns, product recalls etc…..you cant have it both ways.

    Why should the tax payer pay for poor business decisions for a foreign business with nthe government bailouts.

  • JasonP

    John T,

    Very true about the Holden small car line up, as I admitted in my post. (Astra excepted)

    I had an 05 Barina, & you are correct, I didn’t even seriously consider the current Barina, & bought a Mazda 2, even though it was much more expensive.

    A friend of mine bought a Focus (new) 5 or so years ago, & is very happy with it.
    She based her decision on price & equipment, over a Corolla or Mazda 323.
    They were more expensive than the Focus.
    She’s a previous Corolla owner, but didn’t sign up again.

  • Spitfire

    Scrap Metal Says: “dont buy imported cars …buy locally made and designed cars. Its so simple…….I have never and will never buy an imported car,”

    OK, I am after a SUV that has some off road ability, what should I buy?

    I dont want a big fat gas guzzling Ford Territory.

  • Spitfire

    Scrap Metal says: Anyway …..go drive an FG Falcon and then see what the “sarifice” is. Maybe ………thats maybe a few extra dollars in fuel but that is well and truly made up by the great drive and comfort of the car which no imported 4 cylinder can match.

    I sprayed my cucumber sandwich all over the keyboard when I read that one.

  • Wheelnut

    BJ – Just because you mightn’t work in the Australian Automotive Industry doesn’t mean that your job will be safe should either Ford Holden or Toyota close their local operations

    Because fact of the matter is should either off them or even all of them close it would mean 10-40000 people out of work.. which will have a negative flow on effect to all other industries as the auto workers wont be able to afford a new car; home; holiday; television; etc

    which will mean subsequent job losses in the Hospitality & Tourism; Banking & Finance; Construction and Retail Industries

    The end result will be that with so many people out of work reliant on Social Security; the Federal Government will have to increase centrelinks budget as a result they will increase taxes on those who are fortunate enough to have a job.

    So much so that even those still working will find it harder to afford a new car home holiday television etc that it will mean even less economi cgrowth / activity and more job losses

    The cycle will continue.. and once its gone you cant get it back

  • SamR

    Scrap Metal Says: “SamR……..you see ? you just showed the selfish attitude i was talking about !! Its about making a small sacrifice for the future of the industry in this country not your selfish wants.”

    The previous two cars I purchased were Australian made or assembled, a Laser and a Corolla. Now they just make big fat dinosaurs.

    I don’t want a Commodore or Falcon. Can’t park it in the city, way to big, way to expensive and uses too much fuel.

    I may purchase a Focus when they are made here next year IF they localise them and put brake pads and rotors in them not made of cheese.

  • Marcus

    OK, I am after a car and I don’t want a gas guzzling Ford, what do I buy ?

  • BJ

    Wheelnut,

    I understand that there would be negative consequential effects effects from a closure of car manufacturing in Australia but there would also be commensurate positive effects. Based on your argument we can never end the cycle support necessary for the Australian car manufacturers to survive and they will be come a progressively greater burden on the tax-payer and the economy.

    The Government is trying to resist market forces and resuscitate dying businesses with tax-payers money. They can spend as much as they dare but they are just delaying the inevitable.

  • The Realist

    Wheelnut I’ve asked it before on other threads – when will the locals (who are 100% foreign owned) ever have a viable business case?

    When was the last time Holden was profitable? Or Ford?

    All this doom and gloom is increasingly hype. When heavy industry took a huge dive in the 1980s and 1990s in Oz there were morbid predictions from many – but the country made adjustments. The same will happen again.

  • Wheelnut

    Holden and Ford Haven’t made a progfit for approximately 4-5 years. However; like most things it’s all relative. There are a number of factors to consider such as:

    Compared to overseas markets Australia is relatively small we sell less new cars each year than what they do in Europe or the USA.

    Because we sell less cars it takes longer for Holden and Ford to recover the huge costs involved research and development etc.

    Then there’s the availability of and access to resources and technology. Again; because we sell less cars Holden and Ford aren’t able to fit new technology to their cars as quickly as BMW can.

    The Fact we sell less cars is also the reason as to why the life cylce of a car in Australia is 5-8 years where as in Europe its half that.
    Don’t forget that BMW sells cars in more international markets than Ford and Holden which also has an impact as to how quickly costs can be recovered and profits made.

    So BMW is able to make a profit with in 2 years of a new model being released whereas it Ford and Holden usually make a profit closer to the end of the models life cycle

  • Wheelnut

    Thing is back in the 80′s most people were content with what they had and the Commodore and Falcon was good enough for them as a trusty reliable daily driver.

    Then in the 90s as people started to get paid more [in some cases more for doing less than what they did before]. People started to become more “image conscious” more people were trying to keep up with the joneses.
    So even though the Commodore and Falcon is/was still a safe reliable practical car people started looking elsewhere – imports increased as did our trade deficit

    Now [in the Noughties] its gotten to the point where “keeping up with the joneses” isn’t good enough.. and neither is the Commodore or Falcon] now there are those who are doing whatever they can to “out-do the joneses.”

    As evident by the increased popularity of 4x4s not because their safer or more practical than a Commodore or anything like that but because they give people the image that “I’ve got more money than you”

    So the only people keeping Holden and Ford in business appear to be the real Aussies who still believe in the Aussie Battler and that Australians can do/make something just as good as those from overseas.

    Funny thing is when you look at how popular our exports are such as Wine for example it makes you wonder if they’re good enough for the Europeans and Americans etc why they’re not good enough for most Australians – doesn’t it?

  • Wheelnut

    BJ – What are the positive effects of at least 60;000 Australians being out of work? [and that's just in the automotive industry]

    Because once the local car industry is gone we won’t get it back and then we will be at the mercy of overseas car companies who won’t take over the old Ford and Holden Factories because if they thought they could make money by having a factory here they would be here already wouldn’t they?

    There are those who like to think that when Holden and Ford are gone cars will be chaeaper – yet its more likely that they will take advantage of us and increase the prices of their cars to increase their profit margin. They wouldn’t be particularly fussed how many cars they sell here becuase of the relatively small size of the market.

    So only those who are fortunate enough to still have a job will have any chance of buying one.
    However; as the govt would have increased income tax to cover the demand on centrelink its more likely that the majority of Australians will be left driving 10+ year old Holdens and Fords which is quite ironic

  • Wheelnut

    Oh yeah….
    To those who think that Holden and Ford will be the first to go because the Commodore and Falcon are uniquely exclusive to Australia..
    Don’t be surprised if Toyota is the first to go because the Camry/Aurion can and are being built elsewhere in the world.. and one of the things that is cause of GM and Fords problems is that they have a number of factories [ that are relatively close to eachother and operating at less than full capacity making exactly the same car.

    Not only that but if Toyo-oz was so important to Toyo-kyo they would have let Toyot-oz develop a new [RWD] platform which they could use overseas instead of having to modify an old platform sourced from the USA.. just like Mitsubishi did with the 380

    Former Mitsy CEO Tom Phillips [who previously helped turn Toyo-oz around] wanted to make the 380 RWD but HQ said No

    Asfor the $35m the Fed govt gave Toyo-kyo to build a Hybrid Camry here as well as in japan… Toyo-kyo had plans to do that anyway.. the $35m was just a bonus. However; theres nothing to say they won’t change their minds and cancel the plan – particularly with a new CEO.

  • Wheelnut

    BJ – what would you prefer the government to spend a couple of million dollars to try and help ausie workers keep their jobs and their employers through a rough time…. particularly when it’s in such a major industry

    or for those 60 odd thousand workers lose their jobs and the Gummint have to fork out an extra hundred thousand or so extra [if not more] each week in centrelink payments?

    At least by giving Holden Ford and Toyota subsidies and grants etc they are keep ing people in jobs which means they will be getting some of tit back in the form of income tax.. whereas if they let the Auto Industry close they would be getting bugger all back.

    It’s the same scenario the US Govt had to consider before deciding to bail out their Auto Industry.

  • Spitfire

    More verbal diarrhoea from Wheelnut. Put a sock in it mate. You sound like a broken record.

  • ashlie

    hey there just wondering since there is no more ford credit does anyone know what finance company they have replaced it with ????