VW To Offer 60 Month 0% Car Loans in U.S.

FRANKFURT, July 7, 2004; Reuters reported that Europe's biggest carmaker Volkswagen has started giving interest-free loans on two models in the United States, the Financial Times said on Wednesday.

The paper said Volkswagen's offer of interest-free loans for up to 60 months on its Jetta and Passat models started on July 1 and would last until the end of the month.

It quoted a Volkswagen spokesman in the United States as not ruling out cash discounts.

"With the market as competitive as it is, especially the (ordinary) car market, we don't rule out anything," he said.

The company reported deliveries of its VW-brand cars in the United States had slumped 15.6 percent in June from a year earlier, adjusted for one additional working day in 2004.

VW's rivals have been offering discounts, with sticker prices cut by as much as $5,000, pricing the German company out of the market.

VW's North American operation sank into the red in the first quarter, with earnings down by 293 million euros, accounting for more than the 275 million euro decline year on year for the group as a whole.