Bad Timing for AFC HoldCo Shutdown?
Earlier this week, independent auto finance company AFC HoldCo LLC announced that it would shut its doors because of the downturn in the auto market.
Japanese investment firm Mitsui & Co. bought the Sunrise, Fla.-based lender in 2007 for $63 million, with the hopes that the auto finance business would expand. AFC HoldCo had been created from the merger of Affiliated Financial Corp. and BayQuest Capital Corp. — which retained a combined 12.5% stake — and was doing business with 4,000 franchise and independent dealers in 40 states.
Yet instead of growing, the industry contracted, to what Mitsui deemed a point of no return.
“We cannot foresee a recovery in the auto finance business,” Mitsui said in a statement announcing the subsidiary’s liquidation.
It seems to me that Mitsui’s timing is off. The past two years were the industry’s nadir. By now, things are on the upswing.
