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Auto Finance Sponsored by Auto Finance News VWFS and Wells Fargo announce partnership Published: 24th September 2024 Share Volkswagen Financial Services US (VWFS), the financial services arm of Volkswagen Group of America, and Wells Fargo have announced a multi-year cooperation agreement to enhance vehicle purchase financing for the Volkswagen (VW), Audi, and Ducati brands in the US market. Starting in April 2025, Wells Fargo will become the preferred provider of new consumer retail financing, offering a co-branded service for car buyers. This strategic partnership aims to streamline vehicle purchase financing for customers and dealers across the US market. While Wells Fargo will handle the consumer retail financing for vehicle purchases, VWFS will continue to lead the way in consumer leasing and innovative mobility solutions. Additionally, VWFS will maintain its established relationships with Volkswagen, Audi, and Ducati brand dealers, ensuring consistency in service as this transition occurs. The agreement underscores VWFS’s commitment to staying ahead of evolving market trends by focusing on usage-based products and long-term growth strategies in the United States. “This is a union of great strengths,” remarked Ernst Jan van Eijkelenburg, President and CEO of VW Credit, Inc., and Region Manager for North America. “Volkswagen Financial Services US will remain the host of automotive expertise, supporting our brands, dealers, and customers, while Wells Fargo will join us in offering their retail financial services capabilities and comprehensive balanced book to offer outstanding retail solutions.” Under the terms of the agreement, more than 600 Volkswagen, 300 Audi, and 130 Ducati dealerships across the US will be able to offer Wells Fargo’s co-branded retail financing solutions to customers. The companies emphasize that this collaboration is designed to offer a superior customer and dealer experience while positioning both brands for long-term growth in the market. Pablo Di Si, President and CEO of Volkswagen Group of America, highlighted the partnership’s strategic importance: “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 US market in the future.” Wells Fargo, known for its strong auto finance business, echoed this sentiment. Tanya Sanders, head of Wells Fargo Auto, expressed enthusiasm for the collaboration: “Our two companies share a commitment to continuously innovating and creating great experiences, and this relationship will deliver a superior experience for VW, Audi, and Ducati dealers and customers.” David Betteley, Asset Finance Connect’s head of content, commented on the news: “This is a significant move for any captive as the holy grail for all OEMs is to maintain brand consistency through all customer interactions. No doubt there will be significant investment by Wells Fargo to ensure that their branding is hidden, but at some level (depending on how the Joint Venture is structured) the Wells Fargo brand name may well appear in the small print. Other commercial issues such as who takes the credit risk, who takes the RV risk and how end of contract measures are operated are all areas where there will need to be careful handling. “The logical way of thinking would be to look for a link between the news coming out of Germany about cost saving and plant closures. There may well be a strong connection in that the OEM needs to move capital from its massive FS operations to vehicle manufacturing where there are of course, additional strains on financial resources caused by the transition from ICE to EV. “I have experience of doing exactly what VWFS are doing from my time at Toyota Financial Services, but that was in small markets where it wasn’t possible to generate economies of scale. Moving to what is essentially an outsourcing model in the US is a completely different matter of course! “It will be interesting to see if this is a one-off for VWFS or a model for other markets also. Other competitor brands will also be considering the implications of this at their next board meeting I believe. “Asset Finance Connect will continue to monitor developments and keep you up to date on this specific project and whether it will have wider ramifications for the industry as a whole.” Lisa Laverick Editor - Asset Finance Connect Sign up to our newsletter Featured Stories NewsEU gains member approval for tariffs on Chinese EVs NewsAFP to offer new Fleet Intelligence Consultancy Service NewsGlobal mobility brand Ayvens comes to UK Auto Finance