#HighFinance

According to the Financial Times General Electric’s in-house virtual bank, GE Capital, has agreed to give JLR (Jaguar-Land-Rover) new financing secured by vehicles as they come off the production lines. Cash flow wise, JLR will get money almost instantly upon completion of production rather than later on down the road when the dealers and/or their banks pay for the vehicles. GE Capital says it looks forward to helping other European automakers free up working capital by borrowing against “underutilised assets”. This new kind of financing gives companies a powerful incentive to build cars for the “Sales Bank” even if no firm dealer commitments are in hand. Rut Row!

If there’s one thing that can be counted on in the world of investment, it’s that someone is bound to copy Warren Buffett’s latest move. The Oracle of Omaha has reportedly made a billion bucks in less than a year on his $230 mil investment in BYD, and that firm’s soaring stock price has other investors taking notice. Bloomberg reports that Goldman Sachs is looking at buying $250 mil worth of convertible bonds and warrants in Geely, in hopes of repeating Buffett’s success. With major global automakers (specifically GM, VW and Toyota) solidifying their dominance of the Chinese domestic market, Chinese automakers see the low-cost segments in other markets as their opportunity for growth, and Geely is no exception. The firm hopes to boost overseas sales to 66 percent of its annual sales by 2015, a goal that justifies its current pursuit of the Volvo brand (update from Thor Johnsen coming soon). Though a name-brand backer like Goldman could help Geely break into foreign markets, there are challenges aplenty for the planned investment.