Auto dealers stepped up lobbying on Wednesday for government to help them finance their inventories, while lawmakers sought to broaden support for an auto sales incentive plan worth up to $2 billion. The National Automobile Dealers Association asked members to support a Senate petition to the Obama administration to loosen a credit logjam, improve liquidity within the sector and stem dealership closings and job losses.
The group said more than 1,000 dealers have closed this year at a cost of 50,000 jobs.
"Credit is the lifeblood of the franchised dealers' economic model. Additionally, dealers, like many other businesses, need sufficient working capital to maintain cash flow," read a draft letter from Sen. Jeanne Shaheen, a New Hampshire Democrat, to President Barack Obama.
Dealers want the administration to expand access to Small Business Administration lending to help finance their floorplans. Additionally, the group wants the Federal Reserve to expand criteria for a recently unveiled credit program to ensure struggling auto finance companies can qualify. The major finance units for Ford Motor Co (F.N), General Motors Corp (GM.N) and Chrysler LLC and overseas manufacturers provide terms for dealers to purchase vehicles they sell to consumers. "The number of floorplan lenders has declined within the past six months and lenders still in the market are insisting on terms and conditions that are not affordable for many businesses," Shaheen's letter said. GMAC Financial Services said separately that it would resume making car and truck loans to subprime borrowers and will lower inventory financing costs for dealers.
GM and Chrysler financing units have already received billions in government aid.
SUPPORT FOR 'CLUNKER' PLAN
Additionally on Wednesday, proposals to stimulate auto sales took shape in the House of Representatives and Senate with any final action still weeks away, lawmakers said.
Competing proposals would offer a voucher worth up to $5,000 to consumers who trade in older, less fuel efficient vehicles for new ones that get sharply higher gas mileage.
"The American auto industry is in serious jeopardy. Now is not the time to point fingers or ask how we got here. The question is what Congress can do to help jump-start these companies, save jobs and create a more fuel efficient fleet," said a joint statement from Democratic Senators Dianne Feinstein of California and Charles Schumer of New York.
Source : www.reuters.com/article/newsOne/idUSTRE5308QM20090402
