Volkswagen wants to increase financial backing for its vehicles in Europe

Article by Christian A., on January 17, 2012

Customers’ loyalty is so important to Volkswagen AG that it seeks to boost the financial support for its vehicles in Europe by one-third. When interviewed, Frank Witter, the head of the manufacturer's financial unit, said that VW will finance or lease 40% of new VW, Seat, Skoda and Audi models that are delivered in Europe within four years.

In 2011, this figure is 30%. Witter said that the penetration in the markets in Europe will be increased. He said that in Germany, about 54% of all Volkswagen group cars are financed or leased through them.

VW’s global sales last year increased by 14% to 8.16 million cars, sport-utility vehicles and commercial vans. This climb includes the 11% growth with deliveries amounting to 1.15 million in Germany. There’s a 7% jump to 1.98 million elsewhere in western Europe while sales rose by 29% to 548,000 in central and eastern Europe.

During a Jan. 13 presentation, Witter said that financial-services customers are more loyal. He said that they know about that date when the customer would need to decide as it is when the finance contract ends. This is considered as an opportunity for them to talk with the customer and let them know what’s available.

He also said that 70% are car loans and 30% are leased of the vehicles that VW offers backing for in Europe. According to the presentation, the Volkswagen Financial Services division's balance sheet got a boost to about 90 billion euros ($114 billion) at the end of 2011 from 87.8 billion at the end of June. Witter didn’t indicate a time frame but he did say that around 25%, or 22 billion euros, was held in the form of customer deposits, a percentage that the company will hope to boost to 33%. [source: Autonews]

Topics: vw, europe

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