Dec. 9 (Bloomberg) -- Volkswagen Financial Services AG, a unit of Volkswagen AG that helps customers finance cars, has applied for government aid under Germany’s bank bailout program.

Volkswagen Financial Services and Volkswagen Bank, a subsidiary, submitted requests for loan guarantees through Soffin, the government-inspired Financial Market Stabilization Fund, spokesman Dietmar Kupisch said in a telephone interview from the division’s Braunschweig, Germany headquarters today.

“The move should support Volkswagen’s financial strength,” said Oliver Caspari, an analyst at Bankhaus Lampe in Dusseldorf, Germany, who recommends selling the carmaker’s stock. “I wouldn’t rule out that Daimler and BMW follow.”

Germany, Europe’s biggest economy, pushed a 500 billion-euro ($642 billion) bank-rescue plan through parliament in October to stabilize the country’s banks. Soffin includes 400 billion euros in debt guarantees and as much as 100 billion euros for providing capital and to buy so-called “toxic” assets.

Volkswagen Financial Services is the largest automobile financial services provider in Europe, with total assets of more than 52.3 billion euros at the end of last year. The unit has more than 6,100 employees worldwide, about 3,800 of which work in Germany. Volkswagen is Europe’s biggest carmaker.

The global credit crunch and a recession in the U.S. and Europe have plunged the auto industry into what General Motors Corp. has called the worst crisis since World War II. German automakers including Bayerische Motoren Werke AG and Stuttgart- based Mercedes-Benz have cut production by more than 200,000 vehicles this year.

Daimler, BMW

Daimler AG, the world’s second-largest maker of luxury cars, said yesterday it will cut working hours at its biggest factory between January and March to cope with dwindling sales. Volkswagen plans to suspend production at its hometown plant for more than three weeks from Dec. 18, cutting production after car sales fell 5.1 percent in October.

Daimler’s Mercedes-Benz and BMW, whose sales plunged 25 percent each last month, have no plans as yet to follow Volkswagen’s application for government aid.

“Mercedes-Benz Bank doesn’t intend to participate in the program at present, but it’s keeping all options open,” Harald Bertsch, a Stuttgart, Germany-based spokesman for Daimler AG’s luxury-car unit, said today. The company will “re-evaluate” its position if other automaker banks apply for funding.

The BMW Bank is “rock solid and has sufficient capital,” said Mathias Schmidt, a Munich-based company spokesman. “The issue is liquidity and for that we need functioning capital markets,” he said, adding there has been “no decision” whether to tap German bank bailout funds.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net; Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

Last Updated: December 9, 2008 05:29 EST