VW Credit: No chill from shutdown yet
|Jim Henry is a special correspondent for Automotive News.|
So far, the U.S. government shutdown hasn't had any measurable effect on at least one captive finance company's auto finance business.
"So far we don't feel any delayed payments, anything like that," VW Credit Inc. CFO Christian Dahlheim said in an interview Tuesday at Georgia dealership Jim Ellis Volkswagen of Kennesaw near Atlanta.
"There are no delayed payments so far," he said. "Of course, there is a certain uncertainty in the market. We will have to wait and see how it affects sales."
Dahlheim said VW Credit is keeping an eye on volatility in U.S. interest rates. Chairman Ben Bernanke has taken contrasting positions this year. In spring he said the Fed would taper off its support for a near-zero federal funds rate -- the rate at which depository institutions trade balances held at the Federal Reserve -- and interest rates rose as a result. Later, Bernanke reversed that plan, and rates fell.
If rates were to go up and stay up -- one possible outcome of the U.S. government shutdown and debt ceiling debate -- it could have a chilling effect on auto sales.
Dahlheim said VW Credit is watching and waiting.
"Ultimately, sure, rates are going to go up again. They are not going to stay zero forever," he said. "But for now, the effect we see is volatility."
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