Chrysler desperately needs funding for its financial arm and has gotten the first 100 million dollars from the US treasury. Chrysler Financial issued just 3,800 car loans last month compared to 50,000 for December of 2007.
Chrysler Financial is the latest automaker division to receive bailout cash from the US Treasury.
Last Friday, the financial arm of the troubled Detroit automaker received 100 million dollars, the first payout in what will be a 1.5 billion US dollar loan.
The loan will come from the 700 billion US dollar bailout package appropriated by Congress for the US Treasury to provide emergency funding to troubled financial institutions. Initially, the money was meant for Wall Street banks and financial institutions but it has also been used to fund the financial arms of GM and, now, Chrysler. Last month, GMAC received 6 billion US dollars in bailout money to help get financing to GM dealers and customers.
Chrysler now hopes the money will help drive sales. The automaker is already offering zero-percent financing for 60 months on many 2008 and 2009 models.
Chrysler says it desperately needs the money. Last month, Chrysler Financial issued just 3,800 car loans. In December of 2007, the number was 50,000.