VW To Exit US Financing Game, Partners With Wells Fargo Instead
The move affects the Volkswagen, Audi, and Ducati brands in the United States
September 16, 2024 at 18:31
- The VW Group is transitioning away from its own private financing branch for customers.
- Now, it’ll partner with Wells Fargo to provide that service to its customers at its dealerships.
- The shift in financing strategy comes amid a slump in VW’s financial performance.
Volkswagen announced on Monday that its US Financial Services arm (VWFS) would partner with Wells Fargo to provide financing for customers. While VWFS will continue to service existing customers, Wells Fargo will be the main financing option starting in April 2025. Essentially, VW is ditching the driver’s seat in the U.S. financing landscape.
To this point, American customers who wanted to get a loan for a VW, Audi, or Ducati could do so directly through VW. The brand itself would back the loan. Now, after what looks like a less than phenomenally successful time doing it, VW is handing that task off to Wells Fargo. The relationship between Wells Fargo and VWFS is now entering the transition phase, and according to Carscoops sources, the pilot program to test the new Wells Fargo system will begin late in the first quarter of 2025.
More: VW Has “One, Maybe Two Years” To Save Brand, Finance Boss Warns
That date is in line with what Volkswagen says about when customers can expect to use Wells Fargo as their loan source at dealers, April 2025. Evidently, VWFS will continue on as a leasing-focused company. It’ll also handle non-asset business and wholesale business loans. The new arrangement will impact customers at 600 VW dealerships, 300 Audi dealerships, and 130 Ducati dealerships across the USA.
“We continuously evaluate our global business to make bold decisions that best position us in each of our markets,” said Pablo Di Si, President and CEO, Volkswagen Group of America. “By aligning ourselves to respond to evolving market dynamics through this partnership, we’re able to more effectively support the needs of Volkswagen, Audi, and Ducati while providing tremendous opportunities for Volkswagen Financial Services in the U.S. market in the future.”
Globally, operating earnings before tax at VW’s financial services arm plummeted by 41 percent last year.
The move comes as the VW Group grapples with a slew of challenges, including the deteriorating financial performance of its flagship Volkswagen brand. The company is now contemplating the closure of a major vehicle plant and a component factory in Germany, along with potential layoffs that would dismantle a job security program guaranteeing no forced redundancies until 2029. Additionally, VW is scaling back its plans for battery cell factories in Europe and North America in response to a recent downturn in the electric vehicle market.
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