Auto Credit Brings Some Hope To The Wilting Auto Industry
Last month federal government announced, in its budget, the formation of the Canadian Secured Credit Facility under which Ottawa will purchase up to $12 billion in securities from financial institutions including banks.
The securities would be supported by loans and leases on vehicles and equipment. This would enable the automakers to offer financing to more consumers and dealers.
This news comes as the much needed relief to the automobile industry scorched by recession. But they seem to be getting much too impatient to wait till June.
"We need it today," Bigland, chief executive officer of Chrysler Canada Inc., said in an interview at the Canadian International Auto Show. "It's critical oxygen that the patient needs."
"We can't wait six months," he said.
North America has witnessed a major slowdown on automobile sales due to the rising fuel prices, a subsequent global financial crisis that brought the credit markets to a standstill and wilting consumer confidence.
Bigland observed that in a normal economic climate, about 5 per cent of customers can't get credit to buy vehicles, but Chrysler dealers across the country have given proof showing that level has shot up to 20 to 25 per cent in the past four months.
"It's the number one issue affecting our business and it's getting worse," he said.