The Australian Government and Treasurer's Announcement On Car Dealer Financing Following The Failure of This Market

THE AUSTRALIAN GOVERNMENT AND TREASURER’S ANNOUNCEMENT ON CAR DEALER FINANCING FOLLOWING THE FAILURE OF THIS MARKET


This afternoon the Treasurer, on behalf of the Government, released a comprehensive statement on this matter which followed the Government’s announcement of intervention in this failed market of two weeks ago.

The Australian Automobile Dealers Association (AADA) and the Motor Trades Association of Australia (MTAA) welcome this announcement and recognise that the “fine-tuning” that has occurred, and which is described in the statement, which has taken the last two weeks, has been unavoidable, albeit a difficulty for all.

Now, however, we have entire clarity, guidance and a script for what car dealers affected by the withdrawal of GE Money and GMAC from the wholesale finance business can do to sustain their businesses which have always been viable and profitable.

In our media release of 5 December we referred to what the consequences would have been of no intervention by the Australian Government in this failed market. We remain certain that those consequences would have followed and now propose that with the detail of what the Australian Government and the Treasurer have announced today that they can be avoided.

Our principal, further, concern since that media statement by the Associations of 5 December was that GE Money and GMAC should provide enough time for the Australian Government’s measures to be settled, introduced and available to affected dealers. We are pleased to see that through discussions the Treasurer has secured from GE Money and GMAC undertakings to do “the right thing” in this regard. We are enormously pleased by that; that having been our principal, continuing concern and we are pleased that between the Government and the companies this is now agreed and settled.

This has been an immensely complex and troubling circumstance for our Associations, the affected dealers and indeed for the wholesale financiers for all of whom the problems have arisen from the global financial and economic circumstance.

The further measures announced today we think comprehensively and conclusively address those circumstances, avoid great damage to the automotive industry of Australia and Australia’s economy and to our trades, but more to the point maintain and enhance competition by securing the continuing presence in the market of those financiers who hitherto have contributed to one of the most competitive retail motor vehicle markets in the World.

AADA and MTAA and the car dealers of Australia thank the Treasurer, the Government and the respected wholesale financiers for us all together being able to secure this comprehensive, durable and effective solution.


ENDS

19 December 2008

For further information please contact Michael Delaney, Executive Director of MTAA on
(02) 6273 4333.