Report: VW Offers Financial Help to China Dealers

Volkswagen AG is providing 1 billion yuan ($161 million) in financial support to distributors in China to offset slumping demand for VW brand vehicles, sources tell Bloomberg News.

The sources say funding, expected to be used to offset the cost of growing inventories of unsold cars, will go to dealers who sell VW vehicles through the carmaker's venture with China FAW Group Corp. The venture's sales fell 10% in January-June this year, according to data cited by Bloomberg.

VW's aid program follows an agreement in January with its dealers to lower the company's sales targets to more realistic levels. Other carmakers, including BMW and Toyota, also have offered financial aid to their dealers.