Mumbai: Mumbai-based Volkswagen Finance Pvt Ltd (VWFPL) has acquired 25% stake in Chennai-based automotive fintech digital platform, Kuwy Technology Service Pvt Ltd.
The strategic alliance, which came into effect on 3 September, will help VW Finance access Kuwy’s pan-India footprint, thereby consolidating its car financing network in the domestic market.
While the development can be clearly seen as an attempt by VW Finance to beef up its reach to auto retail loan customers in the domestic market, it aims to tap into the growing base of digital platform users looking to conveniently raise car loans online. The critical step by VW India’s captive financing arm, which is owned by Volkswagen Financial Services AG (Germany), also suggests that the passenger car major is readying up for its India 2.0 strategy.
“The acquisition of stake is also in line with the India 2.0 strategy of VW Finance in a quest to offer better value to the consumer,” the two companies said in a joint statement on Wednesday.
Under India 2.0 strategy, the VW Group has merged its three entities: Volkswagen India Pvt Ltd (VWIPL), Volkswagen Group Sales India Pvt Ltd (NSC) and SKODA AUTO India Pvt Ltd (SAIPL) in an attempt to consolidate its operations, drive synergies and speed up decision making process while leading from the front with the Skoda brand.
In July 2018, the VW Group had confirmed investments of ₹8,000 crore under India 2.0 and later in January 2019, a VW technology centre was inaugurated in Pune, laying down the foundation for developing new products based on localised sub-compact MQB-A0-IN platform. The group is developing two new cars under the VW and Skoda brands within the said strategy.
Pointing at the evolving consumers now looking at the digital medium for car loans, Aashish Deshpande, MD and CEO at VWFPL said, “Our aim is to offer a simplified and agile solution to our customers. Through this association, we will now have access to Kuwy’s pan India network and technology platforms and share expertise on used car financing.”
The company also said its association with Kuwy Technology, one of India’s leading instant lending digital platforms, will help improve efficiency in formal processes such as reducing the loan processing time among others. “The alliance will also offer finance, insurance and warranty products for Volkswagen group customers on Kuwy platform,” the companies said in an official statement.