US equity firm moves into Irish motor market
Car dealers here are about to get a substantial injection of funding to expand their businesses.
As demand for second-hand cars continues to increase, the US-based giant NextGear Capital will announce today that it is entering the motor stock funding market in Ireland.
The company works on the basis that dealers do not use their own funds to buy the cars they have sourced.
As well as putting new pressure on existing funding outlets, such as the banks and commercial houses, it is expected within the trade that the move will allow dealers to buy more and better quality vehicles.
NextGear Capital UK Ltd is a subsidiary of NextGear Capital Inc, which is part of the US-based Cox Automotive Group based in Atlanta, Georgia.
The UK subsidiary, which began operations in May 2014 and is based in Chester, says it has already advanced more than £250m of funds to 620 motor dealers for 52,000 vehicles there.
It is forecasting it will provide funding for more than 25pc of the franchised dealer network here by the end of next year.
That is expected to involve transactions of between 5,000 and 7,500 used vehicles.
The firm is already processing €10m of funding applications from Irish dealers and says it has established partnerships with seven wholesale sellers.
NextGear Capital's managing director, David Mercer, said: "We have been planning our entry into the Irish market for the last few months, working with a series of remarketing partners and dealers of all sizes."
The parent company in North America handles the purchase of more than 5,000 used vehicles a day through its dealer-stocking operations.