Volkswagen's finance operations have asked for German government loan guarantees for its banks.

According to the Financial Times, Volkswagen Bank and Volkswagen Financial Services applied for the guarantees to cover refinancing loans. The companies are registered as banks under German law.

BMW and Daimler have also hinted they would consider using the government rescue scheme, dubbed Soffin, for their finance arms.

All German auto companies have been hit by falling residual values of leased cars.

Volkswagen has not declared the value of the guarantees it asked for. It is the first vehicle manufacturer to ask for government guarantees, but there has been speculation by German media that vehicle financing banks would not get access to the scheme.

Volkswagen Financial Services is amongst the largest vehicle financing companies in the world, with total assets of over EUR52bn at the end of 2007. The company employs 6,100 people worldwide. Volkswagen Leasing is part of this group. Volkswagen Bank GmbH also offers current accounts.