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.