Volkswagen to increase car financing in Europe image

Volkswagen AG plans to expand financial backing for its vehicles in Europe by one-third in order to consolidate customers’ loyalty.

Europe’s largest carmaker will finance or lease 40 percent of new Audi, Seat, Skoda and VW models delivered on the continent within four years, compared with 30 percent in 2011.

“We can increase the penetration in the European markets. In Germany, 54 percent of all Volkswagen group cars are financed or leased through us,” Frank Witter, the head of VW’s financial unit, was quoted as saying by Bloomberg.

VW Group posted a 14 percent increase in global sales last year to 8.16 million cars, SUVs and commercial vehicles. In Germany alone, VW sold 1.15 million vehicles, an increase of 11 percent. In western Europe (excluding Germany), sales rose 7 percent to 1.98 million, while in central and eastern Europe deliveries reached 548,000 units, up 29 percent. The new VW Passat and the Audi A6 boosted demand.

70 percent of the vehicles that VW provides backing for in Europe involve car loans and 30 percent are leased. The Volkswagen Financial Services division had a balance sheet of about 90 billion euros at the end of 2011, from 87.8 billion at the end of June. About 25 percent, or 22 billion euros, was held in the form of customer deposits.