Jun 11, 2021
Volkswagen, Ford to exit auto finance business in India - sources
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By Aditi Shah© Reuters/Francois Lenoir FILE PHOTO: The Ford logo is pictured at the Ford Motor Co plant in Genk
NEW DELHI (Reuters) - The auto financing arms of Volkswagen AG and Ford Motor Co plan to stop giving new credit to car buyers and dealers in India and will exit from the country, sources aware of the development told Reuters.
Volkswagen Finance Private Ltd, the German carmaker's finance arm, stopped giving loans to car buyers in India last year and in May told dealers of all VW brands, which includes Volkswagen, Skoda and Audi, to find other financing, two sources with direct knowledge of the talks said.
As some customers failed to make repayments, the finance unit has suffered losses, and will close for business by Dec. 31, the sources said.
More than 50% of Volkswagen group dealers use credit from the finance arm, they said.
Volkswagen Finance Private Ltd said in a statement that it had acquired a major stake in Indian loan brokerage portal KUWY Technologies to service its retail customers.
It is in talks with dealers and will review its business strategy by the end of the year, the company said.
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The auto finance arms are classified as non-banking financial companies (NBFCs) and they compete with banks for providing credit. But banks have access to cheaper funding so can offer loans at lower rates than those offered by NBFCs or shadow lenders.
To offset the disadvantage, Volkswagen and Ford would offer incentives to those dealers who have used their credit finance, the sources said.
Dealers typically need credit to buy cars from automakers which they then sell on to customers.
Volkswagen's plan to exit the financing business has surprised dealers, coming weeks ahead of the launch of Skoda's new sport-utility vehicle (SUV) to boost sales in India, the two sources said.
Skoda dealers have been asked to find new financing by the end of the month - a tight deadline ahead of a new model launch, one source said.
Ford Credit, the automaker's financing arm, stopped lending to car buyers at the end of last year and will cease credit to dealers by June 30, two separate sources said.
The decision to exit the financing business comes at a time when Ford is finalising a new strategy for India after ending ties with Mahindra & Mahindra on Dec. 31.
A Ford Motor India spokesperson said the company regularly assesses market conditions for its credit business and the decision to discontinue was conveyed to dealers in October - before it made any announcement on the Mahindra partnership.
"We are confident the auto financing sector in India can support Ford customer and dealer new financing needs. Our team continues to service our existing book of business," the spokesperson said, adding that 25%-30% of its dealers do business with Ford Credit.
(Reporting by Aditi Shah; Editing by Sanjeev Miglani and Louise Heavens)
News Source: msn.com
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Progressive Group Renews Effort To Pressure Target, Microsoft, Salesforce To Exit Chamber Of Commerce
The progressive group Accountable.US announced that it will increase pressure on major corporations to disassociate from the U.S. Chamber of Commerce.
Accountable.US plans to launch a wave of television and digital advertisements urging Target, Microsoft and Salesforce to cut ties with the U.S. Chamber of Commerce over the trade group’s opposition to the For the People Act, according to an announcement Tuesday. The ad campaign will target media markets in Washington D.C., Seattle, San Francisco and Minneapolis-St. Paul, the group said.
“Companies can’t have it both ways: They can’t tell their shareholders, employees and customers they support voting rights while funding a group leading the charge to undermine that right, particularly in communities of color,” Accountable.US President Kyle Herrig said in a statement. “They must either drop the U.S. Chamber or go against their corporate values and public commitments to protect voting rights for all Americans.”
The group created four versions of its advertisement, one for Target, Microsoft and Salesforce and one urging all Chamber member companies that signed a New York Times advertisement opposing alleged voter suppression efforts nationwide to also exit the trade group, according to the announcement. Accountable.US recently sent letters to executives of the three corporations, directly asking them to rescind their Chamber of Commerce membership.
The For the People Act is a sweeping voting reform bill that would nationalize federal elections, mandating same-day voter registration and automatic registration for 16-year-olds, prohibiting voter ID laws, legalizing ballot harvesting and giving felons the ability to vote. (RELATED: House Democrats Pass The For The People Act Without Any GOP Votes)
Brian Cornell, Chairman and CEO of Target, speaks as former President Donald Trump listens on March 13, 2020. (Saul Loeb/AFP via Getty Images)
“Paying lip service to voting rights while backing its opponents is an insult to the millions of Americans, including their employees, who will be subject to a wave racist voter suppression laws that are already taking hold,” Herrig said.
The Chamber of Commerce issued a letter in March “strongly opposing” the For the People Act, arguing it was disingenuous and that it would lead to voter disenfranchisement.
The Chamber’s position against the legislation triggered Accountable.US to launch its “Drop The Chamber” campaign, which it ramped up on Tuesday. But the Chamber sharply criticized the group, characterizing it as a “political front group.”
“This is an organization loaded with political operatives with extensive experience in politically motivated activism,” the trade group said of Accountable.US.
The Hill first reported that Accountable.US would ramp up its campaign on Tuesday.
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