Volkswagen Financial Services


Growth through flexible mobility packages and internationalization

Even in difficult times, the innovative products offered by Volkswagen Financial Services boosted growth along the automotive value chain by meeting customers’ needs for peace-of-mind mobility – and not just in Germany.

Volkswagen Financial Services (logo)

STRUCTURE OF VOLKSWAGEN FINANCIAL SERVICES

Volkswagen Financial Services’ business comprises dealer and customer financing, leasing, banking and insurance activities, and fleet management. Volkswagen Financial Services AG coordinates the global financial services activities of the Volkswagen Group, excluding the Scania brand. The principal companies in this division include Volkswagen Bank GmbH and Volkswagen Leasing GmbH in Europe, and VW CREDIT, INC. in North America.

BUSINESS DEVELOPMENT

In fiscal year 2009, Volkswagen Financial Services countered the difficult market environment by introducing further product innovations, thus making a positive contribution to the Group’s sales situation. Volkswagen Bank GmbH’s successful mobility packages were once again of central importance and were extended to additional Group brands. The latest innovation is the credit protection insurance offered by Volkswagen Bank GmbH. This allows retail and corporate customers to cover financing installments or premiums for their automobile insurance and warranty policy, for example in cases where policyholders are unexpectedly unable to work or become unemployed through no fault of their own. This financial security guarantees customers’ individual mobility in times of economic hardship. Around 45% of all Group vehicles delivered in Germany are either financed via Volkswagen Bank GmbH or leased via Volkswagen Leasing GmbH. Some 19% of Group vehicles delivered to retail customers were insured by Volkswagen Versicherungsdienst GmbH.

In 2009, Volkswagen Financial Services AG systematically continued its internationalization strategy. Since January 2009, financial services have also been offered in India by VOLKSWAGEN FINANCE PRIVATE LIMITED, a wholly owned subsidiary based in Mumbai. In Norway, a joint venture with the Group’s Norwegian importer commenced trading at the end of 2009. Serving retail and corporate customers alike, this company offers financing, leasing and insurance for Volkswagen Passenger Cars, Audi and Škoda brand vehicles as well as for Volkswagen Commercial Vehicles.

2009 saw Volkswagen Financial Services receive further prestigious awards. In March, Volkswagen Bank GmbH was voted “Best Brand” in the “Passenger Car Banks” category by readers of specialist journal “auto, motor und sport” for the third consecutive year. Furthermore, Volkswagen Leasing GmbH won the “Flotten-Award” presented by specialist journal “Autoflotte” in the “Leasing and Fleet Management” category for the fourth consecutive year.

Rating agency Standard & Poor’s has updated its credit ratings for Volkswagen Financial Services AG and Volkswagen Bank GmbH. In the current difficult economic climate, it confirmed its short-term and long-term ratings for Volkswagen Financial Services AG; the outlook was reduced from “stable” to “negative”. The ratings for Volkswagen Bank GmbH were downgraded by one notch; here, too, the outlook is “negative”. This means that Volkswagen Bank GmbH now has the same rating as Volkswagen AG and Volkswagen Financial Services AG. Based on its recent review of credit ratings, Moody’s Investors Service also confirmed the short-term and long-term ratings for Volkswagen Financial Services AG; the outlook was reduced to “stable”. The short-term and long-term ratings for Volkswagen Bank GmbH are currently on the watch list for a possible downgrade.

In fiscal year 2009, 3.2 million new financing, leasing and service/insurance contracts were signed, 9.1% more than in the previous year. The number of contracts in the Customer Financing/Leasing area increased by 8.7% to 5.1 million as of December 31, 2009. The number of contracts in the Service/Insurance area rose by 9.4% year-on-year to a total of 2.1 million. Financed or leased vehicles accounted for 32.9% (32.5%) of total Group delivery volumes based on unchanged credit criteria. The direct banking business at Volkswagen Bank continued its positive development in fiscal year 2009. Volkswagen Bank GmbH direct managed 1,353,073 accounts as of December 31, 2009; this was 10.3% more than in the previous year.

In our fleet management business, the number of contracts recorded by our LeasePlan joint venture was 1.3 million as of December 31, 2009, down 5.9% year-on-year.

SALES REVENUE AND EARNINGS

In the reporting period, Volkswagen Finanzdienstleistungen generated sales revenue in the amount of €11.7 billion; this is an increase of 6.7% on the previous year. However, owing to higher risk costs in the wake of the financial crisis and to the absence of one-off items, operating profit for 2009 (€606 million) failed to match the 2008 level (€893 million).

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VOLKSWAGEN FINANCIAL SERVICES

 

 

 

 

2009

 

2008

 

%

1

Prior-year figures have been adjusted.

2

Excluding provisions and deferred tax liabilities.

3

Profit before tax as % of average equity.

4

Liabilities as % of equity.

Number of contracts1

 

thousands

 

7,223

 

6,631

 

+8.9

Customer financing

 

 

 

3,567

 

3,163

 

+12.8

Leasing

 

 

 

1,508

 

1,505

 

+0.2

Service/insurance

 

 

 

2,148

 

1,964

 

+9.4

Receivables from

 

€ million

 

 

 

 

 

 

Customer financing

 

 

 

33,823

 

29,251

 

+15.6

Dealer financing1

 

 

 

9,639

 

11,055

 

–12.8

Leasing agreements

 

 

 

14,069

 

15,064

 

–6.6

Direct banking deposits

 

€ million

 

18,309

 

12,835

 

+42.7

Total equity and liabilities

 

€ million

 

76,431

 

74,690

 

+2.3

Equity

 

€ million

 

7,748

 

7,991

 

–3.0

Liabilities2

 

€ million

 

66,180

 

63,380

 

+4.4

Equity ratio

 

%

 

10.1

 

10.7

 

 

Return on equity before tax3

 

%

 

8.5

 

12.1

 

 

Leverage4

 

 

 

8.5

 

7.9

 

 

Operating profit

 

€ million

 

606

 

893

 

–32.1

Profit before tax

 

€ million

 

673

 

919

 

–26.8

Employees at Dec. 31

 

 

 

7,717

 

7,587

 

+1.7

FURTHER INFORMATION
www.vwfsag.com

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