The History of Volkswagen Financial Services

FINANZCENTER IN BRAUNSCHWEIG

Financial services acquired a prominent position among the Volkswagen Group’s sales support instruments in the early 1990s. Following the successful merger of leasing and banking services in 1992 to form Volkswagen Finanz GmbH, a further strategic reorganisation came into effect on January 1, 1994, when all of the Group’s European financial services operations were spun off and regrouped under the new holding company named Volkswagen Financial Services AG (VWFS). By the end of the same year, two further financial services subsidiaries had also been added, underscoring the international orientation of the newlyfounded financing group. Separating financial services from the automotive business made it possible to fine-tune the two business fields more effectively and ensured a more accurate assessment of the various risks.

FINANZCENTER IN BRAUNSCHWEIG
FINANCE CENTRE IN BRAUNSCHWEIG
GEBÄUDE DES VVD IN WOLFSBURG
VVD BUILDING IN WOLFSBURG
GROSSRAUMBÜRO DER VW KREDIT BANK
OPEN-PLAN OFFICES OF VW KREDIT BANK

Unlike the insurance business, car financing had been an in-house operation right from the start. Volkswagen Finanzierungsgesellschaft mbH (VFG), founded on June 30, 1949, gave the Wolfsburg-based manufacturer, at that time still under the administration of the British authorities, a sales promotion instrument at an early stage in its existence which fulfilled an important counterbalancing function given the lack of purchasing power among consumers in Germany. VFG financed 13 percent of all domestic sales on average from 1950 to 1952 through customer loans, while few dealers initially made use of the purchase finance offer. Subsequently, business in competition with the banks progressed generally positively, though with some ups and downs. In 1961, VFG concluded 24,668 contracts with Volkswagen buyers – more than double the figure for 1953. There were 2,152 contracts with dealers, indicating that the need for financing was growing as inventories increased, ref lecting the transition from a seller’s market where demand exceeded supply to a buyer’s market. This trend resulted in a shift in business activities, with VFG financing loans for vehicles in stock from parent company funds from 1963 onwards. Mid-1965, however, saw VFG assuming responsibility for this lucrative business, concluding 345,205 contracts that year. Earnings increased as stocks rose during cyclical downturns, which meant that the company’s commercial success did not follow the same curve as the trend in sales of Volkswagenwerk AG. VFG posted one of its best performances to date in the 1967 recession year, not only reporting a profit of approximately DM 462,000, but also allowing for an equity increase of DM 600,000.

V.A.G BANK IN BRAUNSCHWEIG
V.A.G KREDIT BANK IN BRAUNSCHWEIG
FAHRZEUGFINANZIERUNG IM HANDEL
RETAIL MOTOR FINANCE
FINANCIAL SERVICES FROM A SINGLE SOURCE
FINANCIAL SERVICES FROM A SINGLE SOURCE
The specified fuel consumption and emission data does not refer to a single vehicle and is not part of the offer but is only intended for comparison between different types of vehicles. Additional equipment and accessories (additional components, tyre formats, etc.) can alter relevant vehicle parameters such as weight, rolling resistance and aerodynamics, affecting the vehicle's fuel consumption, power consumption, CO2 emissions and driving performance values in addition to weather and traffic conditions and individual driving behavior. Further information on official fuel consumption data and official specific CO2 emissions for new passenger cars can be found in the "Guide to fuel economy, CO2 emissions and power consumption for new passenger car models", which is available free of charge from all sales dealerships and from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, D-73760 Ostfildern, Germany and at www.dat.de/co2.