In October 2005 Europcar Fleet Services re-branded as Volkswagen Group Leasing (VGL). The company will remain the leasing arm of Volkswagen Financial Services (UK) ltd (VWFS) offering contract hire, leasing and other fleet services for all makes of vehicles.

Graham Wheeler, VWFS's joint managing director, explained that the re-branding is to be a platform for expansion. He said, "The new name marks the fact that we are part of the Volkswagen Group. There are few other groups able to offer their customers a range of executive vehicles such as Bentleys and Audis- as well as a practical range of light commercial vehicles." 

In the UK, VWFS manages a vehicle service and maintenance package portfolio of some 55,000 vehicles, administers finance agreements for 190,000 retail customers and has assets exceeding £2.4bn.

VGL's origins go back to 1998 with the formation of International Fleet Management GmbH (IFM) in Germany. In 2002, IFM became Europcar Fleet Services in the UK to bring the UK operation in line with the rest of the Volkswagen Financial Services' European activities including that of its sister company Europcar International Rental. 

Wheeler confirmed that the driver behind the current re-brand has been Volkswagen's 50 per cent acquisition of LeasePlan in 2004. Since then LeasePlan has taken over Europcar Fleet Services' companies in Italy, Portugal and Spain. The German operation was merged with Volkswagen Leasing while the UK Company is to go for growth as VGL. 

There are no plans to merge LeasePlan and VGL in the UK as the latter concentrates on leasing fleets with a predominantly Volkswagen Group vehicle mix. Sales are originated from the group's 750-retailer base (including Volkswagen, Audi, SEAT, Skoda, VW Commercial Vehicles, Bentley and Lamborghini franchises) and a direct sales team. 

Wheeler stressed: "In addition, we have some 48 staff nationally who are tasked with training, monitoring and mentoring retailers' business managers. We also have a team of eight specialists working as 'remote' business managers directly with customers."

In January 2005, VWFS launched the UK branch of Volkswagen Bank. Wheeler explained that, as a result, the UK branch has acquired the majority of the retailer wholesale funding for €1.2bn from the VWFS UK subsidiary, with new receivables being purchased on a daily basis.

He said: "Other benefits include a more efficient source of funding which helps the UK operations remain competitive in an increasingly keen market."

Wheeler is facing the increasing competitiveness of the UK market head on. "We are a captive that thinks as an independent," he stressed. "Concentrating on our core business in this way means we can prioritise our activities in terms of service and pricing.  We progressed to third in the Swells' New Car Finance House Survey 2005-with only one point separating us from the number-one slot."

In two years time Wheeler aims to be financing 40% of Volkswagen group vehicles with a commensurate increase in banking and insurance services. He is also aiming for the acquisition of more fleet customers with a goal of around 15,000 units from the current 9,000.

"The market is certainly hardening out there, but we are close to record lending figure of around £1bn this year-a figure that i expect us to exceed," he said. "In addition our new point of sale system went live in December which will transform the way we do business."