Ford Credit, the financing arm of embattled car giant Ford Motor Company, has announced it will stop providing finance to private car buyers in Australia at the end of February.
Ford Credit, the financing arm of embattled car giant Ford Motor Company, has announced it will stop providing finance to private car buyers in Australia at the end of February.
The closure of Ford Credit Australia’s retail finance division will result in the sacking of 160 workers, most of who work in the company’s South Melbourne headquarters.
Around 10% of Ford dealers around Australia rely on Ford Credit to provide retail financing to customers. The decision will also affect some Volvo, Land Rover, Jaguar and Mazda dealerships that also use Ford Credit’s retail services.
Ford’s regional dealers will be hardest hit; because their sales are relatively small, they will find it difficult to find alternative finance.
Ford Credit will keep its wholesale finance division running (this division provides financing to dealerships to buy cars for the showroom floor) unlike GMAC and GE Money, which shut their wholesale funding arms late last year, leaving hundreds of dealers scrambling to find alternative arrangements.
However, Ford dealers are said to be extremely nervous about the future of the wholesale division.
The closure of the Ford Credit retail arm is another blow for the struggling automotive sector, which has had a horror start to the year.
Midas Australia been placed on the sale block after falling into administration, and car manufacturers are bracing for a 12.5% fall in vehicle sales in 2009.
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