Volkswagen Brazil seeks vehicle sales boost through Embracon parternship

Volkswagen Financial Services (VWFS) in Brazil is seeking local consortium administrator Embracon to manage its portfolio of vehicle consortiums (car purchasing pool scheme).

Although the agreement still needs to be approved by local regulatory agencies, it is expected that the partnership will begin in the second semester of 2022, Local news portal Auto Data reported.

It is not a joint venture nor an exchange of shares. Basically, VWFS is hiring Embracon to manage its portfolio of approximately 70,000 customers and to assist in expanding its business.

According to VWFS managing director Rodrigo Capuruço, VWFS is seeking to increase its consortium participation which is currently 10%, the report said.

Consortium

Locally known as consórcio – a consortium is a purchasing pool through which a group of people pay monthly installments on a certain item (e.g. a car) so that every month the group can afford to buy one of the items. 

The item is awarded by draw to one of the group members. There is a fee charged by the pool administrator but no interest is paid.