Landmark deal underwritten by the Federal Government offers truck dealers a lifeline after GE Finance's and GMAC's departures
By Gary Worrall
A landmark deal underwritten by the Federal Government is offering truck dealers a lifeline after the sudden departure of GE Finance and GMAC from the automotive finance arena.
Known as an ‘SPV’ or Special Purpose Vehicle, the finance plan, to be operational by January 1 2009, will allow dealers to purchase and hold floor stock, and replaces the same arrangements previously offered by GE and GMAC.
Tony McMullan, CEO of the Truck Industry Council, says TIC is ‘most definitely’ happy with the new arrangements.
“We were delighted as the industry council to see the SPV providing all the floor stock and demonstrators for dealers,” McMullan says.
“It is a good outcome, a good process of government, finance and industry representatives working together to achieve this.”
McMullan says a good indicator of the role TIC played, in conjunction with other industry groups, is in the speech by Treasurer Wayne Swan, when trucks were specifically mentioned, rather than just the ‘automotive industry’.
“TIC was certainly party to all the conversations going on with the government, that it was a problem that needed to be addressed.”
McMullan says it is important to understand the SPV is there to support established businesses, rather than propping up failing operations.
“These are viable businesses, it was just that their access to money was cut off.
“They create employment, support communities and pay taxes.”
As part of the scheme, businesses will be required to meet the normal lending criteria for the banks, with the Federal Government only providing a guarantee if one is needed.
“We are happy with the result we have been able to get for the representations we have made.”