ONTARIO, Calif. — Swayed by the success of the Invest in America program and sales of GM and Chrysler products, Kia Motors America is partnering with Credit Union Direct Lending (CUDL) on a discounted car-buying program for credit union members.
The move came just as Ford was gearing up to announce it would join GM and Chrysler in the credit union-led Invest in America auto-buying and financing offer, and when added to the Kia announcement further signals the strong interest carmakers are taking in credit unions.
"Obviously the manufacturers are seeing the impact of credit unions on auto sales and auto lending," pointed out Joe Greenwald, VP of marketing for CUDL, who shared that other automakers, in addition to Kia, have approached the indirect auto loan service about a car-buying program. "They see the auto loan market share credit unions have taken, and that CUs continue to lend."
Just as General Motors recently recognized that credit unions are sending many first-time GM buyers their way (CU Journal, March 30), Greenwald said Kia understands that credit unions can influence members' car-buying decisions. "That may, over the long term, have some significant traction with the manufacturers. They will want to be in the credit union market."
The success GM and Chrysler have enjoyed through Invest in America intrigued the Irvine, Calif.-based Kia, according to Greenwald, who said, "That planted the seed."
The Kia Credit Union Savings Program is being piloted in Washington and Oregon. Credit union members purchasing a new Kia vehicle receive either a $500 or $1,000 discount, depending on the vehicle model purchased. CUDL credit union members save $500 on any new Kia Spectra, Rio, Sportage, Optima, or Rondo models, and $1000 on any new Kia Sedona, Sorento, Amanti, or Borrego. The discount can be used in combination with any other incentives being offered by Kia dealerships.
Members do not have to take credit union financing to get the Kia discount, but Greenwald said that CUDL is confident that most members will do so. The pilot ran through April 30 and was offered to CUDL's 71 credit unions and 22 partnering Kia dealerships in Washington and Oregon. Greenwald told Credit Union Journal that the partnership will expand into other markets across the country, but a timetable has not been finalized.
"This program happened very rapidly," he said. "We thought we'd take a little more than a month, get our feet wet, and work the kinks out. I can see it running for a good period of time. But a lot will depend on market response."
CU members go to their credit union's CUDL AutoSMART website to download a certificate to take to the dealership for the discount. With CUDL already participating in Invest in America, and a number of its credit unions in Washington and Oregon promoting Invest in America on their CUDL websites, will the offers compete?
"We have not actually looked at the overlap," said Greenwald. "But I do not see the Kia Credit Union Savings Program as direct competition to Invest in America. It's an additional offer for someone who may be interested in a particular type of vehicle. Obviously, Invest in America would prefer to be the only program out there. But our job is to serve credit union members and auto dealers alike, and to give both the best options."
CUDL's auto-lending network, which currently includes 700 credit unions and 20 million members nationwide, is drawing attention from more than Kia, said Greenwald, who declined to state which automakers, outside of Kia, have approached the CUSO about a car-buying discount program.
"There is nothing we can say now," he said. "Nothing is imminent. But Invest in America has caught the interest of other auto manufacturers. This is a time when these programs make all of the sense in the world."
