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Volkswagen Finance Private Ltd (VWFPL), a captive financing arm of VW group, plans to enter financing lease and fleet management segment to grow business in India.
India Ratings and Research in its credit report on company said VW Finance aims to gradually increase its share of financing the sales of Volkswagen automobiles in India. This it intends to do through retail borrower financing and wholesale (dealer) funding. It also plans to finance used cars of the group’s brands.
The entry into new lines of business would be dependent on market conditions, India Ratings said.
Volkswagen group established VWFPL as a captive finance company as part of its global business strategy of coordinating the financial services of the group.
The company does not plan to venture into the operating lease financing business.
Future business prospects of VWFPL are linked to the sales of the various Volkswagen brands in India. Volkswagen’s automobiles brands in India, mainly are the Audi, Skoda, Volkswagen, Porsche and Lamborghini.
Amid slowing automobile sales and high interest rates, the sales of Volkswagen group's cars will also remain under pressure in FY14 and thus loan growth is likely to moderate, it added.
In the medium term, VWFPL's continued on-boarding of group's dealers should provide a platform for steady growth of both the retail finance and inventory finance businesses.
