Volkswagen has set up its financial services arm in India to cater to its dealers and customers in the Indian market. Volkswagen Finance Pvt Ltd will provide finance to not only Volkswagen passenger and commercial vehicles but also to Audi and Skoda vehicles in India. It will tie up with local financial institutions and insurance companies to increase its strength in the Indian market.
Vehicle sales in India have been vastly hit due to absence of credit from banks and lending agencies and high interest rates. There has been a steep decline in the sales volumes since past six months. Volkswagen Finance Pvt Limited will be a wholly owned subsidiary of Volkswagen Financial Services AG (VWFSAG) with its headquarters in Mumbai.
Volkswagen also plans to import commercials in India in the first half of 2009. The company is also investing 580 million euros in India to set up a plant with a capacity of 110,000 vehicles which is expected to become operational this year. The financing division will also offer financing to the commercials vehicles as well from Volkswagen.
