Volkswagen of America, Inc., is the latest carmaker to sign a distribution deal with satellite radio companies Sirius Satellite Radio and XM Radio.

The USA branch of the German car company, which includes Audi of America, said it has signed contracts with the competing satellite broadcasters to offer Volkswagen and Audi customers a choice of the service in coming years.

Both the Washington, D.C.-based XM and New York-based Sirius offer 100 channels of digital audio entertainment coast to coast for a monthly fee.

XM's line up of programming features more than 30 commercial-free channels, and includes opera, hip hop, classical and blues as well as sports, talk, and children's programming. It launched its service months ahead of Sirius, which went live in markets last month and is installing its XM radios in General Motors' luxury cars such as the Cadillac DeVille and Seville models.

XM offers 100 channels of sports, news, talk and entertainment for $9.99 per month. Sirius offers 100 channels at a monthly subscription fee of $12.95. The service includes 60 original channels of commercial- free music in most musical genres available, as well as sports, news and entertainment channels. The company has existing deals to install AM/FM/SAT radios in Ford, Chrysler, BMW, Mercedes-Benz, Jaguar, Volvo, Mazda, Dodge and Jeep vehicles.

Both services also require the customer to pay an estimated $299 to $399 (not including installation) to install the laptop-sized receivers in the cars.

And both companies are hoping that a unique mix of content will be enough to entice potential customers to fork over cash for a medium that has been, up until now, free.

Analysts are predicting Sirius will sign up between 150,000 and 200,000 by the end of this year; XM has added approximately 30,000 subscribers since its launch last November. The company expects to have 350,000 subscribers by the end of this year.

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Shares of XM have been hovering around $12 since it announced last week that it needed to raise more cash to fund operations. In its annual report, the company's auditor KPMG said XM needed to find more financing in the form of debt or equity in order to remain a going concern.