The automaker known for its famous sedan - the original Beetle, or "Bug" - is opening its own bank Thursday, joining the ranks of companies such as BMW and Nordstrom Inc. that have offered banking to their customers.
Raymond Specht, president and CEO of Volkswagen Bank USA, said the venture is designed to further improve the car company's relationship with consumers.
"We understand that we need to provide exceptional service to customers in other ways - not just selling cars," he said Wednesday.
The bank - insured by the Federal Deposit Insurance Corp. - is targeting only customers of Volkswagen and its Audi subsidiary.
"We want to enhance the lifestyle of our customers," Specht said. "We aren't looking to service the public like a community bank."
Volkswagen Bank plans to build its services slowly. Auto and home loans will be offered this year, Specht said. The company plans to offer Volkswagen and Audi credit cards in 2003. Other financial products - like checking accounts and CDs - will be available later, he said.
"We don't have specific dates," Specht said. "We want to build slowly and methodically.
"We want to make sure we do this right."
Volkswagen Bank customers won't see any branch offices. Services will be offered through the Internet, the mail or by phone.
Deregulation of financial services by former U.S. President Bill Clinton in 1999 opened the door for companies to break into the banking industry. Volkswagen - like other companies - are banking on customer loyalty to succeed.
BMW of North America LLC opened its bank in July 2000. It offers financial products like credit cards, CDs, savings and money market accounts, debit cards and, of course, car loans.
Financial services from automakers are more common in Europe, where some offer everything from checking accounts to insurance. DaimlerChrysler AG provides car financing services worldwide, but its DaimlerChrysler Bank in Stuttgart operates solely in Germany.
GMAC Financial Services, a subsidiary of General Motors Corp., offers car and home loans, insurance and business-to-business lending.
Ford Motor Co.'s Credit Division offers auto loans to consumers and dealers. The Dearborn automaker is waiting for federal approval of a thrift charter, which would allow Ford to open a consumer lending operation, said Melinda Wilson, spokeswoman for Ford Credit. The company applied for the charter in 1998.
Volkswagen of America Inc. is headquartered in Auburn Hills, a Detroit suburb. Volkswagen Bank USA will be based in Salt Lake City.
By Korie Wilkins © MMII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed