TechSpotlight: VW Credit Readies Rollout of E-Contracting Tool

Capping a five-year IT effort, VW Credit Inc. is gearing up to roll out its end-to-end e-contracting solution. The move is part of a broader, companywide initiative to bolster IT capabilities to support Volkswagen and Audi sales ― and the corresponding growth in the captive’s $24 billion portfolio.

“One of the big areas of focus for us is keeping pace with torrid Volkswagen and Audi sales,” said VW Credit President and Chief Executive Andrew Stuart. “We are growing dramatically, so as the captive supporting those two brands, my major focus is that we are able to handle that business. That’s involved some pretty significant investments in technology.”

In the past couple weeks, the captive synced its FinanceSource electronic finance system with ADP Dealer Services’ suite of dealer products, to provide instant contract validations to speed approvals and, ultimately, to execute fully electronic contracting.

“What we’re trying to do is simplify for our dealers the process on the sales floor,” Stuart said. “We’ve taken the tack that what we want to do is integrate our system with ADP and Reynolds and Reynolds and any other DMS provider, so that a dealer doesn’t have to go in and out of two or three different systems as he does a deal. So if you’re desking a deal on the showroom floor, you can structure it and send it to VCI, we’ll approve the deal, and send it back to you.”

In December 2012, one VW dealer successfully tested the e-contracting system. “We did our first e-contract, with all of the documents, everything electronic,” he said. “It was submitted and funded, the whole thing [with] no paper.”

VCI will initiate a state-by-state rollout throughout the year.

Meanwhile, the e-contracting push comes on the heels of a move announced late last year to switch to FIS from NetSol for North American loan and lease processing. VCI will use FIS’ AutoSuite for dealer finance, integrated loan and lease servicing, and payment services; it will use the vendor’s Default Manager solution for collections and remarketing, and TouchPoint Sales and Marketer for customer-relationship management. So far, VW Credit (www.vwcredit) is about six months into the two-year process.

“It’ll be early 2014 before we’re fully locked and loaded and done,” he said. “That is a big project and big investment for us. It’s something we’re doing to ensure that, as our portfolio grows and potentially doubles over the next five to six years, we’ll be in a good position to manage that and have cutting-edge technology.“

Also, last month, the captive completed a $10 million expansion to its servicing center in Libertyville, Ill., another move meant to accommodate growth. Parent company Volkswagen AG has set 2018 at its deadline for overtaking Toyota Motor Corp. and General Motors Co. as the world’s biggest carmaker.

Volkswagen of America Inc. sales grew 35.1% last year, to 438,133 units, while Audi sales reached a record 139,310, an 18.5% year-over-year increase. VW Credit’s portfolio, including floorplan, stands at about $24 billion portfolio. Between lease and retail, the captive finances 60% of the Audis and 70% of the Volkswagens that are sold.

―Marcie Belles

Published in the March 2013 issue of Auto Finance News TechSpotlight, through the generous support of FIS.