Car dealers facing financial crisis will now be underwritten by a Government debt guarantee, amid the withdrawal of two major financiers.
The ‘Special Purpose Vehicle’ (SPV) plan announced by Treasurer Mr Wayne Swan, with support from leading Australian banks, will provide liquidity to car dealer financiers and the dealer sector.
The peak automotive industry body in Victoria, the VACC, has welcomed the break-through in the Australian car dealer finance crisis.
“Today’s outcome is a creative solution to the problem, and the Federal Government and banks involved are to be commended."“The SPV, with the support of ANZ, Commonwealth Bank, NAB and Westpac, and with technical support to be provided by Credit Swisse, will allow viable dealerships who were affected by the withdrawal of GE and GMAC, to keep trading."
The Government guarantee for car industry financing is not without penalty howver, a fee paid by dealers will ultimately be passed on to new car buyers.
This is not the first time the Government has had to intervene in order to keep the Australian car industry afloat in recent times, having offered a $6.2 billion lifeline to invest in cleaner cars.
The new scheme will be up and running by the January 1, 2009.