Volkswagen and Audi dealers are being treated at the NADA convention Jan. 26-29 in New Orleans to a flurry of new products and services from Volkswagen of America’s captive lender, Volkswagen Credit.
“We are offering VW and Audi dealers and their customers a proactive program worked out with their dealer councils,” VW Credit national sales manager Jeff Parent told F&I Management and Technology. “It’s a way of celebrating our great ratings on the J.D. Power rankings of finance companies in 2001.”
VW Credit, based in Auburn Hills, Mich., at the parent automaker’s North American headquarters building, placed first on the J.D. Power poll in dealer satisfaction on floorplan service and third on coverage for loans, leases and retail products. Subsidiary Audi Financial Services placed first and BMW Financial Services placed second in the retail lease and loan category.
NADA’s New Orleans meeting marks the debut of a home equity loan product funded by the new VW Bank in Salt Lake City. A credit card issued to VW and Audi customers also has been included in a program parallel to that pioneered among import brands by BMW Financial Services.
Training classes, “focused on brand enhancement,” says Parent, are to be introduced early in 2002. The training courses, he adds, “will emphasize in an untraditional way what’s best for our customers, rather than routine stuff like cash conversions and closing techniques.” Enhanced services for VW Credit’s Extranet Web site will also be on display at VW's booth, number 4149. Rolled out in 2000, Extranet offers online loan applications and approvals, plus dealer bulletins.
The list of VW firsts includes a two-year/24,000-mile Master Guard warranty on certified preowned VW and Audi vehicles, on which VW Credit frequently offers interest-free floorplanning as an incentive. The New Beetle has been added to the certified preowned list eligible for “free” floorplan.
Parent, 35, came to Volkswagen in 1992 when VW and Audi financing was taken over by VW of America from Chrysler Credit. Innovative products and services are being offered to the 604 VW and 258 Audi dealers, says Parent, “so as to tie our owners closer to our brands and in response to recommendations of both dealer councils. With VW Credit and our dealers, a cross-pollenization of ideas always is in place,” he declares.
VW Credit floorplans 40 percent of VW cars and 35 percent of Audi vehicles. The lease rate, consistent with the industry-wide pattern, fell off for VW in 2001 to 24 percent but held steady for luxury brand Audi at 53 percent.
“The highline segment, including Audi, remains a fairly popular lease area,” says Parent, who reports to VW Credit President and CEO Kevin Kelly. “But we steered clear of the zero percent phenomenon this past fall, because it reduces residual values of brands offering it. Our residuals have remained high, close to Honda’s, and that’s what we and the dealers like to see.”
Down the road, says Parent, VW Credit hopes to do 65 to 70 percent of its business with its dealers electronically. The lender has quadrupled its mortgage loan portfolio as dealers construct new Marketplace dealerships or embark on renovation or expansion projects.
About 150 VW and Audi dealers currently are involved in real estate programs, with 60 new Marketplace buildings open nationwide and 275 scheduled to be operational by the end of 2002.
VW Credit offers GAP insurance together with its MasterGuard service contract, but steers clear of nonprime financing and does not offer credit life or disability coverage.
The lender covers most preowneds taken in trade by VW and Audi dealers, but has a “selective” policy of financing new vehicles of other brands dualled with the parent company’s stores.
“We’re highly pleased with our results in the J.D. Power survey,” says Parent. “Our goals for 2002 and beyond are to stay at the top of the ratings.”