Volkswagen Financial Services UK reached £1 billion in lending in July – five months ahead of schedule – “and our dealers are earning more than ever”, said managing director Graham Wheeler.
It took VFS the whole of 2006 to top £1 billion sales for the first time, and until October last year.
“Volkswagen Financial Services has done well and it is not a flash in the pan,” he said.
“August should have been a really bad month for us, but it wasn’t. We were on target for 9,000 contracts by the middle of the month after budgeting for 6,000.”
Wheeler said one reason was that dealers were becoming smarter on finance processes.
Increased owner retention
“Fewer tyre kickers are going into dealerships, so they have the chance to convert real buyers. We and our dealers are defying gravity despite the doom and gloom,” he said.
During August, Volkswagen Financial Services reviewed the next six and 12 months, and Wheeler remains positive despite the economic slowdown.
“We have increased our retention of owners and have the new Golf and Polo set for launches in early 2009,” he said.
“We’ll have great offers on them and we have every chance of continuing to grow despite bad news.”
VW and Seat down, Audi and Skoda up
Wheeler, who previously worked for GE Capital, said Volkswagen Group was taking account of the UK market slowdown though its market share was not a problem.
At the half-year VW and Seat were down in step with the market, but Audi and Skoda were up.
He said the company’s success was based on “the largest range of motor industry finance offers” and the design of its websites, which kept finance offers close to the cars.
Also, captive banks now held an advantage over high street banks – “they are restricted on loans, and are less competitive on who they lend to and how much”.
Roamers help dealers
Wheeler said he recognised the need for his team to be ‘smarter’ as people saw their homes depreciate, though in the long term they would gain.
His team includes 22 in a field force for Audi and commercial vehicles and 11 for Seat and Skoda. Another team focuses on large franchised groups and there are three contract hire specialists.
Six people train dealers on PCPs. Another six “roamers” help at smaller dealerships when necessary.