DETROIT — Volkswagen is hoping its customers love the Bug enough to bank on it.
The automaker known for its famous sedan — the original Beetle, or "Bug" — opened its own bank Thursday in Utah, joining the ranks of companies such as BMW and Nordstrom Inc. that have offered banking to their customers.
Raymond Specht, president and chief executive officer 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.
Volkswagen of America Inc. is headquartered in Auburn Hills, a Detroit suburb. Volkswagen Bank USA will be based in Salt Lake City.
The company — which began planning the bank a year ago — recently received its industrial loan company charter from the state of Utah. Only two other states — California and Colorado — allow industrial loan companies.
"We chose Utah because of its favorable economic climate," Specht said. "There's an educated work force."
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. Auto financing also will be available at the company's 600 U.S. dealers.
Deregulation of financial services by President 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.
The clothing store chain Nordstrom offers credit cards, checking accounts and other banking products.
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.
BMW offers its services over the Internet, the phone and by mail. It's also FDIC-insured.
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.