Volk­swa­gen talks to shops amid car-fi­nance fears

Campaign UK - - NEWS - By Omar Oakes

Volk­swa­gen UK hopes to al­lay con­sumer fears that the car in­dus­try could go through its own ver­sion of the sub­prime loans cri­sis as it be­gins agency talks to sim­plify its fi­nance mar­ket­ing.

The car gi­ant’s brief, for Volk­swa­gen Fi­nan­cial Ser­vices, in­cludes a strate­gic fo­cus on sim­pli­fy­ing car fi­nance for con­sumers.

The bal­loon­ing credit mar­ket has come to the fore in the past year as the num­ber of new cars reg­is­tered in the UK hit a 12-year high in Jan­uary, ac­cord­ing to the So­ci­ety of Mo­tor Man­u­fac­tur­ers and Traders. This was de­spite fall­ing house­hold in­comes. Nine out of ten buy­ers now use per­sonal con­tract pur­chase plans, ac­cord­ing to the Fi­nance & Leas­ing As­so­ci­a­tion.

Pablo and Prox­im­ity Lon­don work with Volk­swa­gen Fi­nan­cial Ser­vices on strat­egy and cus­tomer en­gage­ment re­spec­tively across the group’s brands. The re­view in­volves ros­ter agen­cies and may lead to a con­sol­i­da­tion.

The brief does not af­fect Volk­swa­gen’s re­la­tion­ship with UK abovethe-line agen­cies Adam & EVE/DDB (which han­dles the Volk­swa­gen brand), Bar­tle Bogle Hegarty (Audi), Droga5 (Seat) and Fal­lon (Skoda).

PCPS al­low buy­ers to pay a small de­posit and monthly pay­ments over a pe­riod of time, with the op­tion of buy­ing or giv­ing back the car at the end. The pop­u­lar­ity of the model has meant that the value of car loans in the UK has al­most tre­bled to £31.6bn be­tween 2009 and 2016.

The Bank of England is look­ing at whether new reg­u­la­tions should be im­posed on PCPS.

Volk­swa­gen de­clined to com­ment.

Volk­swa­gen: Pablo and Prox­im­ity Lon­don cur­rently work on fi­nance ac­tiv­ity

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