Europe’s Carmakers Are Competing With Retail Banks for Deposits

Some of Europe’s biggest carmakers are looking more and more like retail banks.

Renault, Volkswagenand BMWare among those making a push into the business of taking customer deposits. They say it’s a cheaper way to finance car leasing after an unprecedented rise in interest rates made corporate bond issuance — the primary means of funding in recent years — far less attractive.

Automakers’ finance companies can use the deposits they attract to backstop car loans to other customers, helping keep sales going. It’s a change from the ultra-low rates era, when they were able to sell bonds ...