In separate teleconferences with reporters and CU executives, senior managers of the two auto firms detailed the sales uptick from the pilot program launched Dec. 10 by the Michigan Credit Union League and three other Midwest leagues.
CUs from California to Maine were quick to promote the dealer incentive and rebate package to their members, which on a pilot basis will continue with both GM and Chrysler through the end of March with an extension likely after that.
The pilot pushes the idea of CUs offering car loan rates below banks, coupled with the vehicle discounts ranging from $500 to $1,000, was launched by the Michigan, Indiana, Ohio and Illinois leagues, all home to large manufacturing plants of the auto firms and feeling the sharp economic downturn.
"In the four states where we began in December we saw a 30% conversion rate of car buyers applying the discount," said David Adams, president/CEO of the Michigan Credit Union League in citing CU member activity.
Under the Chrysler arrangements in 12 states, members are required to take out a CU loan to receive the incentives.
"I can't attribute all of our December sales increase to the program but certainly a portion of it," declared Edward Broadbear, director of incentives and programs for Chrysler.
Adams said negotiations are still underway with Ford Motor Co. about signing the company up for the program although no deal has been set yet. He added, "We've had some good talks."
James Bunnell, GM executive director of channel marketing, said in response to a question that CUs had been "overlooked" in the past as a source for generating car sales and expressed satisfaction that the program has worked well.
As to banks running a parallel program, Adams said he welcomes "all financial institutions" to join CUs in offering a similar program to help boost auto sales and stimulate activity in a down economy.