CHATSWORTH, Calif. -- An unprecedented collaboration between two of the industry's widely recognized auto buying services and a CUSO has created the first credit union automobile dealership with a national reach.
Autoland, one of the nation's oldest credit union-exclusive auto buying services, was acquired on March 2 by CU Vehicles, LLC, a wholly-owned CUSO of $608 million Telesis Community Credit Union. The acquisition comes on the heels of Telesis becoming the sole equity owner of AutoSeekers, a national credit union-owned and operated automotive dealership, in January. Prior to that purchase, Telesis shared equity interest with $132 million California Bear Credit Union in Los Angeles.
Telesis, Autoland and AutoSeekers will now collaborate to provide the industry with a brand new cooperative through which credit unions can provide their members the information, education and personal assistance in purchasing a vehicle, said the new company.
The new entity will function under the Autoland brand name for now, according to officials. Launched in 1971, it now serves more than 300 credit unions in California, Oregon and Washington. The team said it would launch an aggressive push later in the year to continue collaborative efforts that already have begun with existing credit union partners, and to offer the opportunity for additional credit unions and CUSOs to begin purchasing an equity interest in the business. The combined company will have 160 employees. Autoland delivers in excess of 12,000 cars each year with used cars representing 25% of its business.
Ron Frey, Autoland's CEO, will remain in that role. Walt Agius, will join the organization as president. Agius, previously the president/CEO of California Bear CU, started AutoSeekers and acted as its president/CEO over the past three years of operation.
"The new Autoland will truly be that credit union-owned, trusted resource and a one-stop shop for all automotive and lending related services that many in the movement have been wanting for years," Frey said.
Together, Autoland and AutoSeekers aim to complete the entire cycle of automotive related sales and lending for credit unions. The combined entity sells new and used cars, assists with a program for the disposition of repossessed automobiles and by the end of 2007, will offer an indirect lending program for its credit union partners.
"This is an unbelievable jump in the right direction for the industry," Agius said.
"Telesis has proven expertise to show it can successfully drive the development of a nationwide CUSO, and AutoSeekers has been building proprietary technology for the past three years that will be integrated into the fully developed Autoland platform."
Grace Mayo, president/CEO of Telesis underscores the broad goals of this new cooperative.
"Telesis has always had the vision of being part of, and supporting, a larger national automobile CUSO for credit unions. This transaction brings tremendous scale and economies of scale, and creates an organization with the ability to roll this out at a national level."
Telesis is hoping that the new CUSO will lead to more inroads compared to business lending, which can be burdened by a number of barriers, said Jean Faenza, executive vice president of Telesis and CEO of Business Partners, a CUSO owned by Telesis.
"Our experience with Business Partners indicates credit unions want to be part of a company that touches their membership," Faenza said. "Most credit unions are hungry for good loans and we have learned that with the complications of regulatory caps and other issues related to implementing a business lending program; virtually all credit unions want to assist their members in acquiring vehicles and securing the financing."
Mayo said this is not a CUSO that Telesis intends to own, although the CU wants to retain a piece of it. The goal is to structure the entity similar to CO-OP Financial Services' ATM network: "true cooperatives in which every credit union, regardless of size, has an opportunity." --firstname.lastname@example.org