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Changes in the Automotive Distribution System: Challenges and Opportunities for Credit Unions

A look into the changes in auto distribution systems and the forces affecting future distribution systems. 

Executive Summary

The financial and general media are filled with announcements of new business ventures that will market automobiles to consumers in “revolutionary” ways. Some of these new distribution schemes rely on internet technology and build-to-order business techniques. Others stress consolidation of dealerships. Some eliminate dealers and other middlemen by expanding the role of auto manufacturers in the selling process. 

What is this research about?

Because of the great importance of auto distribution to consumers, credit unions and other financial institutions, we asked Matt Joseph, the author of this report, and a highly respected expert on the auto industry, to assess the forces affecting future distribution systems. 

What are the credit union implications?

If radical new approaches to auto distribution are widely implemented, they are likely to produce profound changes in the ways consumers finance their vehicle purchases. Credit unions have reason to be very interested in these changes because auto loans comprise about 40 percent of their total loan portfolios.