Marac continues drive into car finance

Marac this week announced more deals which continue its move into the space in the vehicle finance market left by the departure of overseas companies GMAC and GE last year.

Yesterday the Pyne Gould Corp-owned finance company said it had struck a deal to back the Automobile Association's vehicle finance operation.

This week it unveiled a partnership with Hyundai over the provision of insurance and a relationship with Suzuki around finance.

"We've always had a strong presence in the franchise end of the motor vehicle sector and we're just formalising a few relationships we've had and, in the case of Suzuki, a new relationship," said Marac general manager of consumer finance Chris Flood.

The departure of other financiers had "clearly created an opportunity" in terms of picking up franchise relationships and some floor plan financing of dealerships' stock of showroom vehicles.

The withdrawal of GE and GMAC was seen as a major blow to the motor industry and helped precipitate an unprecedented wave of consolidation.

"Clearly there were some failures in the motor market as a consequence of the pull-out, some dealerships weren't able to find replacement financiers.

"But there are a lot of really good, strong dealership businesses out there and so we've been more than happy to step into the void that GE and GMAC have left," said Flood.

Although the latest data showed new vehicle sales were down by 35 per cent over the past year and used vehicle sales were down 40 per cent, Flood said Marac's loan book had continued to grow, albeit modestly over that period.

The industry clearly had a future and Marac was positioning itself for that.

About 95 per cent of Marac's $450 million loan book was on vehicles and of that 75 per cent was franchise finance or loans on vehicles bought from new-car dealerships, with the average loan size being $17,500.

Said Flood: "We deal at the quality end of the market."