Services (VWFS) launched a brand new ‘Lease Asset Protection’
service for the Volkswagen group’s line of commercial
vehicles.
The service has been designed to cover shortfalls between
remaining amounts of repayable finance and insurance payouts.
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It will work along the lines of the Asset Protection service,
which was launched across all Volkswagen group car brands
(including Audi, Skoda and Seat) in August this year.
Both products will be available through Volkswagen group
retailers, and have been developed to replace the previous GAP
insurance scheme.
In addition, VWFS will continue to develop its fixed-price
servicing and maintenance plans, which have seen steady sales
growth since their introduction in December 2007.
Volkswagen’s most notable deployment of such a plan this year
was the offer of the Transporter van on contract hire or finance
lease at £209 per month, including three years of free service and
maintenance.
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By GlobalDataThis marketing strategy contributed largely to the 258 percent
year-on-year increase in service and maintenance contracts reported
in VWFS’ financial report for the first half of 2008. A similar
plan has now been put in place for Volkswagen’s Caddy and Caddy
Maxi vans.
This proliferation of financial products in support of basic
finance provision is part of Volkswagen Financial Services’ aim of
running a ‘one-stop shop’ business philosophy.
According to managing director Graham Wheeler, the near future
may see “dramatic” increases in VWFS’s insurance and aftersales
products, in order to make it “easier for people to buy the entire
vehicle finance package within the VW group of brands”.
A Volkswagen bank credit card may also be on the agenda for
2009.
Wheeler explained that buyers of Volkswagen group vehicles who
funded their purchase through VWFS captive finance were up to 18
percent more likely to buy vehicles within the brand in future than
those who sought finance independently.
The future for VWFS, according to Wheeler, is to integrate as
fully as possible with Volkswagen as a manufacturer and with
Volkswagen group dealerships.
This future includes the provision of financial products that
support and enhance the VW brand, such as the service-inclusive
£209 (€262) Transporter offer that focused on making the ‘premium’
VW brand affordable to aspiring purchasers through finance.
This type of thinking is obviously contributing to VWFS’s
success: 2008’s first half financial reporting showed that 1.3
million new finance, leasing and insurance contracts were signed in
H1 2008, up 5.6 percent from the same period in 2007.
According to the same report, profit after tax for VWFS was
reported at €443 million for the end of H1 2008, showing an
increase of 10.5 percent from H1 2007’s total of €401 million.
Fred Crawley
