So the fates of General Motors have been
decided – or have they? In Europe, the confusion over the fate of
Opel and Vauxhall continues – see page 4. Will Magna hold onto its
preferred bidder status? Will GM Europe end up owned by a Chinese
company?
Whatever happens, Vauxhall will remain a
strong brand in the UK; it is lucky that, unlike in the US,
consumers do not necessarily connect the brand name with that of
its bankrupt parent, which should help keep confidence in Vauxhall
– and the future residual values of its models – higher than it
might otherwise have been.
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In the fleet sector, of course, the woes of its
parent are common knowledge – but still, the strength of the model
line-up should help Vauxhall, along with its strong support network
of dealers and workshops.
Analyst Jack Sayer, of Gerson Lehrman Group, made a
salient point in response to a Wall Street Journal article
claiming that Ford would face “tough going against two
federally-funded automakers”: he pointed out that it is Ford’s
captive which will struggle to compete against GMAC, with its new
access to cheap government money.
“The ability to offer preferential financing
through GMAC is going to give GM and Chrysler an insurmountable
advantage. The game is essentially over before it even begins. Ford
may offer better products, have better management, but in the end,
the ability of GM and Chrysler to take advantage of GMAC lending
may spell the end of Ford,” he says, pointing out that, after GMAC
received US Treasury support, it started offering US consumers 0
percent loans again.
Superficially, it seems that Ford is in a stronger
position that GM or Chrysler, without the stigma of bankruptcy
attached to its name. But if its consumer finance operation cannot
compete on a level playing field, it could run into serious
problems.
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By GlobalDataThe latest FLA figures on motor finance show that,
compared with April 2008, in April of this year 32 percent fewer
new cars were bought using dealer finance, in a month when private
registrations fell by 27 percent.
But dealer finance is still the most popular option
for carbuyers, with a touch over 53 percent opting to take up a
finance package offered at the point of sale.
Despite tighter underwriting standards and a
reduction of choice in the marketplace, it’s a sign that all is by
no means lost.
Now the motor finance industry has to think hard
about how to retain these customers, even when the economic outlook
brightens.
