GENERAL MOTORS LEADS THE CHARGE :: essays research papers

GENERAL MOTORS LEADS THE CHARGEThe Launch of the GM handbillIn 1992 at a convention, Visa USA president and CEO Robert daimon belittled the arrival of non-band quote- motorcard issuers. He joked that it wouldnt be long onward pizza parlors joined AT&T and General Motors in offer cards. Within a class he was punted and people were talking some McDonalds having a credit card.The US Car Industry in the Early 90sFlat demand and foreign argument made the early 90s tough for the big three. In 1992 GM chalked up the largest annual loss in US embodied history, around $4.5 billion.Part of the solution to GMs problem was to collect better cars and make them more efficiently.That still left the issue of how cars were sold. End-of-the year rebates, cash-back, and dealer discounts were hard to control. Car buyers began to expect these incentives, so they waited and by postponement forced manufacturers to offer them earlier in the year.The GM placardIn September 1992, GM teamed up wit h Household Bank, a major issuer of co-branded credit cards, to launch the GM bill sticker under the MasterCard umbrella. The card allowed holders to apply 5% of their charges to the purchase or lease of a new GM car or truck. The credit was applied after the customer had negotiated his or her go around deal on the vehicle. Cardholder were allowed to accumulate up to $500 a year in rebates, with a ceiling of $3500 over 7 years.GM worn-out(a) $120 million on a marketing blitz.The GM Card rollout was the most successful ever in the credit-card business. After only xxviii days, in that location were one million accounts. In less than two months, there were over two million GM Card accounts, and card balances transcend $500 million.The eight million-plus new accounts propelled Household Bank from 10th to fifth place among credit-card issuers. Annual charge volume on the GM Card was $5200, or two and a half times the national average.The Ford-Citibank CardIn February 1993, Ford joi ned forces with Citibank.