<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                               _________________

                                   FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999        Commission File No. 33-80055

                Volkswagen Credit Auto Receivables Corporation
                                 on behalf of
                      Volkswagen Credit Auto Master Trust

(Issuer of the Volkswagen Credit Auto Master Trust Floating Rate Dealer Loan
Backed Certificates, Series 1996-1 (the "Certificates"))

            (Exact name of registrant as specified in its charter)

                               -----------------
<TABLE>
<CAPTION>

<S>                                                         <C>
     State of Delaware                                                                38-2748796
     (State or other jurisdiction of                        (I.R.S. Employer Identification No.)
     incorporation or organization)

     3800 Hamlin Road                                                                      48326
     Auburn Hills, Michigan                                                           (Zip Code)
     (Address of principal executive offices)

     Registrant's telephone number, including area code:  (248) 340-4938
</TABLE>
                               -----------------

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

     Form 8-A was filed with the Securities and Exchange Commission (the
"Commission") registering the Series of Certificates pursuant to Section 12(g)
of the Securities Exchange Act of 1934 (the "Act").

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Act") during the preceding 12 months (or for such period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

     YES    x *       NO
         -------         -------

     State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked price of
such stock, as of a specific date within 60 days prior to the date of filing.
(See definition of affiliate in Rule 405, 17 C.F.R. 230.405):

     NOT APPLICABLE


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     *  On May 9, 1997, the registrant was issued a no-action letter (the "No-
Action Letter") by the commission with respect to certain of the registrant's
reporting requirements pursuant to Section 13 or 15(d) of the Act.  This Form
10-K has been prepared in accordance with the terms of such No-Action Letter.
<PAGE>

                   FORM 10-K (Pursuant to No-Action Letter)

                                    PART 1

Item 1.   Business.

                  The Volkswagen Credit Auto Master Trust (the "Trust") was
          created pursuant to the Pooling and Servicing Agreement (the "Pooling
          Agreement") dated February 29, 1996 among Volkswagen Credit Auto
          Receivables Corporation (the (Company") as seller, VW Credit, Inc., as
          servicer, and Citibank, N.A., as trustee (the "Trustee"). The Trust
          assets include wholesale receivables ( the "Receivables") generated
          from time to time in a portfolio of revolving financing arrangements
          with automobile dealers to finance their automobile inventory and
          collections on the Receivables. Such property was obtained by the
          Company pursuant to the Receivables Purchase Agreement dated as of
          February 29, 1996 between the Company, as purchaser, and VW Credit,
          Inc. as seller.

                  The Company has registered with the Securities and Exchange
          Commission under the Securities Act of 1933, as amended, and sold to
          the general public the Series 1996-1, Floating Rate Auto Loan Asset
          Backed Certificates in the initial principal amount of $375,000,000.
          The Monthly Certificates contain information relating to the
          Receivables and the accounts from which the Receivables arise (the
          "Accounts") and are prepared by the Servicer and delivered to the
          Trustee pursuant to Section 3.04 of the Pooling Agreement. The report
          issued by Coopers & Lybrand L.L.P. in connection with the servicing
          activities of the Servicer is attached hereto as Exhibit 99.2. The
          Monthly Certificates containing information relating to the
          Receivables and the Accounts for the Collection Periods from and
          including January 1999 through December 1999 are incorporated by
          reference from the registrant's Current Reports on Form 8-K filed with
          the Commission on February 25, 1999, March 24, 1999, April 20, 1999,
          May 18, 1999, June 21, 1999, July 21, 1999, August 19, 1999, September
          20, 1999, October 21, 1999, November 30, 1999, December 20, 1999,
          January 24, 2000, respectively.


Item 2.   Properties.

                  For information regarding the property of the Trust, see the
          Pooling and Servicing Agreement and the Current Reports on Form 8-K
          incorporated by reference herein. For additional information regarding
          the Certificates, see Exhibit 99.

Item 3.   Legal Proceedings.

                  Nothing to Report.


Item 4.   Submission of Matters To A Vote Of Security Holders.

                  None.

                                    PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters.

             (a)  To the best knowledge of the registrant, there is no
                  established public trading market for the Certificates.

             (b)  The Certificates are represented by one or more certificates
                  registered in the name of Cede & Co. ("Cede"), the nominee of
                  The Depository Trust Company ("DTC").

             (c)  Omitted pursuant to the No-Action Letter.

Item 6.   Selected Financial Data.

                  Omitted pursuant to the No-Action Letter.
<PAGE>

Item 7.   Management's Discussion And Analysis Of Financial Condition And
          Results Of Operation.

                  Omitted pursuant to the No-Action Letter.


Item 8.   Financial Statements and Supplementary Data.

                  Omitted pursuant to the No-Action Letter.

Item 9.   Changes in and Disagreements On Accounting And Financial Disclosure.

                  None.

                                   PART III

Item 12.   Security Ownership Of Certain Beneficial Owners And Management.

                  (a)  The Certificates are represented by one or more
           certificates registered in the name if Cede, the nominee of DTC, and
           an investor holding an interest in the Trust is not entitled to
           receive a certificate representing such interest except in limited
           circumstances set forth in the Pooling Agreement. Accordingly Cede is
           the sole holder of record of Certificates, which it holds on behalf
           of brokers, dealers, bank, and other direct participants in the DTC
           system. Such direct participants may hold Certificates for their own
           accounts or for the accounts of their customers. The name and address
           of Cede is Cede & Co., c/o The Depository Trust Company, Seven
           Hanover Square, New York, NY 10004.

Item 13.   Certain Relationships And Related Transactions.

                  Nothing to Report.

                                    PART IV

Item 14.   Exhibits, Financial Statement Schedules, And Reports On Form 8-K.

                  (a)  Omitted pursuant to the No-Action Letter.

                  (b)  The registrant has filed Current Reports on Form 8-K
           containing certain financial information with regard to the Trust,
           the Receivables and the Accounts, in accordance with the No-Action
           Letter, on February 25, 1999, March 24, 1999, April 20, 1999, May 18,
           1999, June 21, 1999, July 21, 1999, August 19, 1999, September 20,
           1999, October 21, 1999, November 30, 1999, December 20, 1999, January
           24, 2000.

                  (c)3.1   The Articles of Incorporation and By-Laws of the
                           registrant are incorporated by reference from
                           Exhibits 3.1 and 3.2, respectively, of the
                           registrant's Registration Statement on Form S-3 (File
                           No. 33-80055).

                     4.1   The Pooling Agreement and the Series 1996-1
                           Supplement thereto are incorporated by reference from
                           Exhibits 2.2 and 2.3, respectively, of the
                           registrant's Form 8A filed with the Commission on
                           September 13, 1996.

                     5.1   The opinion of Cravath, Swaine & Moore with respect
                           to certain matters involving the Certificates is
                           incorporated by reference from Exhibit 5.1 of the
                           registrant's Registration Statement on Form S-3 (File
                           No. 33-80055).

                     8.1   The opinion of Cravath, Swaine & Moore with respect
                           to federal tax matters s incorporated by reference
                           from Exhibit 8.1 of the registrant's Registration
                           Statement on Form S-3 (File No. 33-80055).
<PAGE>

                     8.2   The opinion of Honigman, Miller Schwartz & Cohn with
                           respect to Michigan state tax matters is incorporated
                           by reference from Exhibit 8.2 of the registrant's
                           Registration Statement on Form S-3 (File No. 33-
                           80055).

                     23.1  The consent of Cravath, Swaine & Moore is
                           incorporated by reference from Exhibit 23.1 of the
                           registrant's Registration Statement on Form S-3 (File
                           33-80055).

                     23.2  The Consent of Honigman, Miller, Schwartz & Cohn is
                           incorporated by reference from Exhibit 23.2 of the
                           registrant's Registration Statement on Form S-3 (File
                           No. 33-80055).

                     99.1  The Annual Certificate of VW Credit, Inc., as
                           Servicer is attached hereto as Exhibit 99.1

                     99.2  The report on the activities of VW Credit, Inc., as
                           Servicer, prepared by Coopers & Lybrand L.L.P.,
                           pursuant to Section 3.06 of the Pooling Agreement is
                           Attached hereto as Exhibit 99.2.

                     99.3  The Monthly Certificates containing information
                           relating to the Receivables and the Accounts for the
                           Collection Periods from and including January 1999
                           through December 1999 are incorporated by reference
                           from the registrant's Current Reports on Form 8-K
                           filed with the Commission on February 25, 1999, March
                           24, 1999, April 20, 1999, May 18, 1999, June 21,
                           1999, July 21, 1999, August 19, 1999, September 20,
                           1999, October 21, 1999, November 30, 1999, December
                           20, 1999, January 24, 2000, respectively..