DETROIT - Luxury carmaker BMW said on Wednesday it intended to stay independent despite the decline in vehicle demand, as Ford Motor Co became the second carmaker to offer securities backed by auto loans to take advantage of a U.S. program aimed at thawing consumer credit for new vehicles.
Under the U.S. Federal Reserve's Term Asset-Backed Securities Loan Facility (TALF), the central bank will make loans to investors to buy asset-backed securities. Once the securities are sold, issuers of the bonds will have capacity on their balance sheets for consumer lending.
On Tuesday, Nissan became the first issuer of securities backed by auto loans under TALF with a $1.3 billion offering.
Ford's offer of $2.95 billion in asset-backed securities was its latest action to improve its finances and turn itself around without any help from the U.S. government.
General Motors Corp and Chrysler LLC have received $17.4 billion in government aid and have asked for another $22 billion in emergency loans.
Chrysler is in talks with the U.S. government's auto task force, and Chief Executive Bob Nardelli said in a message to employees that the company was receiving a fair evaluation.
Chrysler's financial arm confirmed on Wednesday that it has asked for more government funds, but declined to give details.
EUROPE GRIPS THE ROAD
BMW, founded in 1916 and based in Munich, Germany, said it would focus on managing its finances to ensure its independence in 2009. The BMW Group, which has the brands BMW, MINI and Rolls-Royce Motor Cars, said on Wednesday that car markets would decline as much as 20 percent this year, and that it was impossible to give a reliable earnings outlook.
The world's largest premium carmaker said sales would pick up starting in 2010, due partly to planned launches of highly profitable models.
BMW ruled out interest in acquisitions, noting that brands like Ford's Volvo or GM's Saab and Opel were under financial duress and were highly integrated subsidiaries that would still need parts supplied by their parents.
On Wednesday in Berlin, Junior Economy Minister Dagmar Woehrl told reporters that German carmaker Opel and it's U.S. parent, GM, had enough financing to get them into April.
GM Europe submitted a rescue plan for Opel last month under which Opel and Vauxhall would be partly spun off into a new subsidiary. It said the independent unit would need 3.3 billion euros ($4.3 billion) in state aid.
In a memo to staff dated March 13, GM Europe head Carl-Peter Forster said that bringing in an outside investor would be the most promising and innovative path for Open, which would lessen the burden on German taxpayers.
A German association of Opel dealers is due to meet on Thursday to discuss the possibility of investing in Opel to secure their business.
Opel dealers across Europe could come up with about 400 million euros to buy 20 percent of Opel through an investment vehicle, their association Euroda has said.
German carmaker Porsche was likely to reach a critical $13 billion (10 billion euro) loan refinancing deal with its bank by next week's deadline, bankers close to the deal said on Wednesday.
Porsche currently has commitments of up to 7 billion euros on the refinancing, banking sources said, and is expected to meet the 10 billion euro target as talks continue with around 10 banks that have not yet committed, several sources said.
DEALS TO THE LEFT OF US
While carmakers battled on, AutoNation Inc, the largest U.S. dealership, announced a Payment Protection program that will cover up to six months of car payments on new or used vehicles if a buyer loses his or her job.
The program, similar to one by Korean automaker Hyundai Motor Co Ltd, costs buyers nothing.
There are really two big issues in retailing -- availability of credit and consumer confidence, said AutoNation's President Mike Maroone. This attacks the consumer confidence issue.
The program applies to the first year following the purchase, there is an initial 90-day waiting period and the buyer must be involuntarily terminated from his or her job.
It was launched at 33 South Florida dealerships on Wednesday, and may go nationwide. AutoNation owns and operates 313 new vehicle franchizes in 15 states.
(Reporting by Poornima Gupta; Editing by Toni Reinhold)