Automaker Volkswagen is leaning more on leases, charging drivers as little as $39 a month in some regions, indicating how poorly the German company is performing lately.
Bloomberg reports some U.S. dealerships are asking for $39 a month in San Jose, Calif., and $99 in Boston, Mass. for a three-year lease for the Jetta. That lease can be less than what car-sharing platform Zipcar charges per month (though Zipcar’s annual and application fees are far, far less than the $2,500 down payment Volkswagen wants to lease out the $17,325 Jetta).
Why is Volkswagen leaning on leasing so much? Part of it mirrors a growing trend — U.S. auto leasing reached its highest point last year than at any time in more than a decade.
Another factor: desperation. Volkswagen has lost market share in the United States, where it’s reporting weak sales even as the industry broadly reports growth. Volkswagen’s 2014 sales in the U.S. totaled 366,970 cars, down 8.3% from a year earlier. For 2015, results aren’t much better: year-to-date sales are down 7.5% to 109,248 cars for the first four months of 2015.
Also notably, Volkswagen wants to use leases as a way to lock in potential repeat customers for 2017. That’s when the auto company is expected to show an improved product line, with hopes to more than double U.S. sales, Bloomberg notes.