New VW Credit chief wants to expand floorplan footprint
HERNDON, Va. -- The new CEO of Volkswagen and Audi's finance arm wants to get more of each brand's dealers on its books.
Christian Dahlheim was named CEO of VW Credit Inc. last week.
Dahlheim, 45 and formerly VW Credit's CFO, had been leading the captive finance arm on an interim basis since former CEO Andrew Stuart left the company July 15 to become TD Bank's auto-lending chief.
Within two to three years, Dahlheim wants VW Credit's wholesale financing business to provide floorplan financing for two-thirds or more of VW and Audi's U.S. dealerships, up from about 50 percent today.
"We definitely want to massively increase that number," Dahlheim said. "We have all the products in place, we have very good dealer partners and we're very successful with most of the large groups. There's no reason why we shouldn't have more of our dealers on our books."
Part of the effort will be recruiting more VW and Audi dealers to use VW Credit for floorplan financing.
Another part will involve broadening VW Credit's product offerings.
For example, Dahlheim said the company plans to offer more floorplan insurance coverage.
Some changes already have taken place, such as extending dealership mortgage offers to 10 years, a change made within the past year, Dahlheim said.
VW Credit also will help its dealers finance new dealership projects, which have been a major focus at VW and Audi in recent years.
"Luckily our brands are growing, which includes investment in new facilities, so the dealers need help in financing these investments," Dahlheim said.
One area of potential growth could be smaller, independent VW and Audi dealers.
Dahlheim says VW Credit's penetration among privately held, multifranchise dealers with a few stores is lower than among large dealership groups, such as Group 1 Automotive Inc. and Penske Automotive Group, which use VW Credit.
"We haven't serviced some of the smaller dealers," Dahlheim said.
VW Credit provides wholesale financing for VW and Audi dealers in the United States, and Ducati motorcycle dealerships.
The finance company underwrites retail sales and leases, and certified used-vehicle sales. VW Credit has about $26 billion in assets.
Much of VW Credit's focus of the past two to three years has been on providing retail and lease products to support the busy vehicle launch schedules of the VW and Audi brands.
"By nature, the focus was maybe a little bit more on making sure we get the right retail products out for these cars," Dahlheim said.
He added: "Now I think is the right time to say, 'We have a very comprehensive retail product piece, a very successful leasing and financing business. We have a solid base on wholesale. Let's grow that.'"
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