Volkswagen has struck a $8 billion lease deal with the U.S. automaker’s largest auto dealer group in a bid to reduce its dependence on GM vehicles.
Volkswagen is selling a range of new and used cars and trucks to its U.K. customers, and the deal is worth about $3 billion per year, a Volkswagen spokesman said in a statement.
In addition to the $2 billion annual lease payment, Volkswagen is also buying the assets of several of its dealerships and is buying about $1.4 billion worth of GM equipment, including a $1 billion Chevrolet Volt hybrid electric vehicle, and $1 million worth of Cadillac SUVs.
The deal has been widely seen as a sign of weakness by GM, whose shares are currently up more than 6% since the deal was announced in March.
GM shares closed down 2.9% at $35.45 on Thursday.
The Volkswagen deal is a sign that VW is beginning to make some headway on its plans to move aggressively to sell vehicles directly to consumers, after several years of a slow-growth strategy, the Wall Street Journal reported earlier this month.
As of Thursday, Volkswagen sold 1.9 million of its new and modified cars in the U, the Journal said.
The automaker had sold more than 17 million of those vehicles in the United States.