Recreational vehicle maker Thor Industries Inc. is partnering with an organization of credit unions to offer RV discounts of up to $1,000 for credit union members.
CUcorp, a credit union marketing group, said today (Aug. 26) that credit union members are eligible for discounts of $300 to $1,000 on the RVs purchased through Thor’s Airstream, Breckenridge, CrossRoads, Damon Motor Coach, Dutchmen, Four Winds and Komfort brands, according to the Washington Examiner.
Thor Chief Operating Officer Dicky Riegel said the discounts will help the company bring in more business from credit unions, which are member-owned financial institutions that often offer better retail financing terms than banks.
“Credit has been a little bit difficult over the past several months and has contributed to the difficulties we’ve faced as an industry,” Riegel said during a conference call. “To help credit unions gain share of RV loans – which are historically high-performing loans – that is an excellent goal of this program’
The program is the latest expansion of CUcorp’s “Invest in America” program, which has offered discounts to credit union members buying vehicles made by Ford Motor Co., General Motors Co. and Chrysler Group LLC. CUCorp CEO Dave Adams said the program has helped to sell 180,000 vehicles so far this year. More than 1,900 credit unions around the country are part of the program, he said.
The RV industry has been among the hardest hit in the economic recession as the market for financing grew tighter and consumer spending declined. RV sales are down 55% for the first six months of the year compared with the year-ago period, according to the Recreation Vehicle Industry Association (RVIA).
In addition, several companies in the RV industry have filed for bankruptcy protection over the last year. But the industry group is expecting sales to rebound 24% next year compared to 2009 levels.
A small but influential group of RV manufacturers and state executives met Thursday (May 21) in Elkhart, Ind., to hear a proposal to bring the “Invest in America” program to the RV industry.
Hoping to copy a program that has paid some dividends for the beleaguered domestic auto industry, Drew Egan, president and COO of CUcorp, a subsidiary of the Michigan Credit Union League, led the informal gathering at the RV/MH Hall of Fame and explained how the program could be adapted to the RV industry too.
It involves harnessing the marketing potential of credit unions, which typically finance about 15% of Chrysler’s auto loans in Michigan but upped that share to 40% in January thanks to the “Invest in America” program and still held a 25% share through March.
After successful pilots for GM and Chrysler in December, a nationwide program was launched Jan. 8. Through March over 85,000 vehicles have been sold for GM and Chrysler, he said.
“This was done during some of the worst economic conditions in our history and during months that are considered the slowest for the auto industry,” Egan said
Michigan auto dealers have made statements that, “were it not for credit unions, some of them would be out of business right now,” he indicated.
The meeting, which Egan told RVBusiness was “very preliminary” in nature, helped him make some early conclusions about how “Invest in America” could help the RV industry. For Egan, who has owned an RV but confessed he didn’t know that much about the industry itself, it was a learning experience too.
Trying to mirror the auto program for the RV industry “is not going to work,” he said. “There aren’t many similarities between the way their business models are structured.”
For starters, RV dealerships are not generally franchised as they are in the auto industry, he said.
“In the auto industry, it’s our contract with Chrysler and General Motors that drives this program. It’s the manufacturers that CUcorp has a contract with.”
“In the RV industry, what came out of the meeting yesterday, the RV manufacturers are in really tight circumstances and they think the dealers would be in better position to drive the ad pools and discounts. And it came out that manufacturers don’t put the amount of dollars into advertising on a percentage basis as the auto industry does. It’s driven (in the RV industry) by the dealer base.”
Egan said he had hoped for more dialog from the RV manufacturers present at the meeting but soon realized, “I’m not going to get a lot of feedback from these guys in public because they are competitors with each other.”
Other attendees included state association executives from Indiana, Michigan, Pennsylvania and Florida and an unnamed RV dealer, he said.
He said he has great hope that his idea can be implemented to help the RV industry. Like Detroit auto manufacturers, Egan said, “We’re not giving up. We’re just retooling.”
Egan said he will either reach out on an individual basis to a few large manufacturers to get a base to start with or go to key states, like Florida, California, Texas and Michigan, to brainstorm how he might adopt this program on a dealership basis rather than at the manufacturer level.
He said he will hold a conference call next week to follow up on this week’s meeting.
In his original proposal that was distributed with help from the Recreation Vehicle Industry Association (RVIA), Egan proposed to have CUcorp “use its marketing structure to leverage the existing relationships with over 1,400 credit unions nationwide to promote an RV discount to over 50 million members. The affinity and trust between these credit unions and their members will provide needed financing sources and increased sales of RVs. This is particularly valuable during the current economic recession where consumers are looking for needed financing and value in their purchasing decisions. Credit union members trust their credit union to provide them with REAL discount purchasing offers.”
He noted that credit unions are organized around occupational groups that are prone to support U.S. companies. “We are leveraging off of that patriotic sentiment to boost sales for U.S. employers. With a foundation of 1,000 large credit unions, the “Invest in America” program will quickly launch results for the RV industry through a partnership with CUcorp.”
Other recent examples of the “Invest in America” program include include AAA Michigan, Sprint/Nextel, Blue Cross/Blue Shield and FIS Card Services.
The partnership with AAA has helped AAA Michigan build the second‐highest market share for auto insurance in the state of Michigan through the offering of credit union member discounts to Michigan’s 4.4 million credit union members. Over 70% of AAA’s auto insurance business can be attributed to the successful credit union member discount program, he said.