VACC, the peak automotive industry body in Victoria, has welcomed the break-through in the Australian car dealer finance crisis.

Treasurer Mr Wayne Swan has today announced the establishment of a ‘Special Purpose Vehicle’ (SPV), with support from leading Australia banks, to provide liquidity to car dealer financiers and the dealer sector. The SPV will be implemented by January 1 2009.

“This is most welcome news for new car dealers, in particular, and the Australian economy as a whole,” VACC Executive Director, Mr Purchase said.

“The Australian Automobile Dealer Association (Vic), the new car division of the VACC, has been working hard to assist dealers since GE Money and GMAC announced they were withdrawing from motor floorplan finance.

“Today’s outcome is a creative solution to the problem, and the Federal Government and banks involved are to be commended.

“The 60 day notice period provided by GMAC and GE Money was too short, and VACC was among the many voices calling for a deadline extension.

“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.

“It will operate for a period of twelve months and enable dealers to establish permanent solutions within a reasonable time-frame.

“AADA (Vic) and VACC will continue to work with our new and used car dealers to ensure they are well-equipped to ride out this economic slowdown.

“VACC commends the Rudd Government, Australian banks, and Future Fund Chairman Mr David Murray for pulling this solution together,” Mr Purchase said.