Volkswagen will be the majority partner with a 51 per cent stake
Volkswagen in Exklusiv car financing venture

GIANT German car-maker Volkswagen's financial services arm is setting up a joint venture with local Exklusiv motor group to offer what it calls innovative car financing packages from next year.

Volkswagen Financial Services (VFS) and Group Exklusiv yesterday signed the agreement to set up the new entity, VW Financial Services Singapore.

Volkswagen will be the majority partner with a 51 per cent stake.

While the venture would focus on the financing services needs of the buyers of Volkswagen and Renault vehicles distributed by the Exklusiv group in Singapore, it would not be restricted to the two brands.

"The new company will go for multi-branding and not limit itself to vehicles from the two manufacturers," Mr Norbert Massfeller, chairman of the board of managing directors of Volkswagen Financial Services, told journalists yesterday.

VFS is the No 1 car-financing company in Europe and "number three or four worldwide" behind similar American companies, he added.

It is a 100 per cent owned subsidiary of car maker Volkswagen and responsible for the group's car financing businesses in Europe and Asia-Pacific.

Group Exklusiv is an affiliated company of Exklusiv Auto Services, which imports Renault, and Cars & Cars, which does Volkswagen in the Singapore market.

The new Singapore company, with a paid-up capital of 3.5 million deutschemarks (S$2.66 million), aims to start operations early next year.

Group Exklusiv executive chairman Peter Kwee said the joint venture was in the process of designing car financing packages which would offer "a fair rate, something new and affordable".

VW Financial Services is expected to benefit from Volkswagen's knowledge and experience of the business from Europe and will introduce new ideas to the Singapore market.

Renault and Volkswagen car buyers here would have the choice of seeking financing from the new entity or from DBS Finance which now provides financing support to the two distributors.