The move affects the Volkswagen, Audi and Ducati brands in the United States.
September 16, 2024 18:31
VW Group is moving away from its own private finance division for customers. The company plans to partner with Wells Fargo to offer the service to dealer customers. The change in funding strategy came amid sluggish performance at VW.
Volkswagen announced Monday that its U.S. Financial Services Division (VWFS) will partner with Wells Fargo to provide financing to customers. VWFS will continue to serve existing customers, but beginning in April 2025, Wells Fargo will be the primary financing option. Essentially, VW will relinquish the driver’s seat in the US financing environment.
Previously, U.S. customers who wanted a loan for a VW, Audi, or Ducati could do so directly through VW. The brand itself will support financing. Although it didn’t appear to be a phenomenal success, VW has now handed over the job to Wells Fargo. The relationship between Wells Fargo and VWFS is currently in a transition phase, and Kerscoop sources say a pilot program to test the new Wells Fargo system is expected to begin late in the first quarter of 2025. .
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This date is consistent with Volkswagen’s statements about April 2025, when customers will be able to use Wells Fargo as a financing source at their dealerships. Clearly, VWFS will continue as a leasing-focused company. It also plans to handle non-asset business loans and wholesale business loans. The new arrangement will affect customers at 600 Volkswagen dealerships, 300 Audi dealerships and 130 Ducati dealerships across the United States.
“We continue to grow our global business to make bold decisions that best position us in each market,” said Pablo Di Ci, president and CEO of Volkswagen Group of America. I am evaluating it.” “By working together to respond to evolving market dynamics through this partnership, we will be able to more effectively support the needs of Volkswagen, Audi and Ducati, while also creating significant opportunities for Volkswagen Financial Services in the U.S. market in the future. can be provided.”
Globally, VW’s financial services division’s pre-tax operating profit plunged 41% last year.
The move comes as the VW Group is grappling with a number of challenges, including the deteriorating financial performance of its flagship Volkswagen brand. The company is currently considering job cuts that could result in the closure of its main vehicle and parts plants in Germany and the end of a job security program that guarantees no forced layoffs until 2029. Additionally, VW is scaling back plans for a battery cell factory in Germany. in Europe and North America in response to the recent downturn in the electric vehicle market.
