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Volkswagen Financial Services

On its way to becoming the best automotive
financial services provider

Volkswagen Financial Services generated strong growth in all business areas in fiscal year 2012. The division continued its international expansion.

Volkswagen Financial Services AG (logo)

STRUCTURE OF VOLKSWAGEN FINANCIAL SERVICES

Volkswagen Financial Services’ portfolio of services covers dealer and customer financing, leasing, banking and insurance activities, fleet management and mobility offerings. Volkswagen Financial Services AG coordinates the global financial services activities of the Volkswagen Group, with the exception of the Scania, MAN and Porsche brands and the financial services business of Porsche Holding Salzburg. The principal companies in this division in Europe are Volkswagen Bank GmbH, Volkswagen Leasing GmbH and Volkswagen Versicherungsdienst GmbH. Financial Services activities in North America are performed by VW CREDIT, INC.

Volkswagen Leasing GmbH acquired the dealer-owned rental company Euromobil on January 1, 2012. The acquisition expanded Volkswagen Financial Services AG’s mobility offering to include the classic short-term car rental business.

BUSINESS DEVELOPMENT

Volkswagen Financial Services continued its positive trend in fiscal year 2012. Total assets exceeded €100 billion for the first time. The combination of its innovative projects and the Volkswagen Group brands allowed it to leverage additional potential along the automotive value chain. The integration of its financial services with the Volkswagen Group brands’ sales activities was accelerated in 2012. This contributed to the Volkswagen Group’s strong earnings and unit sales.

In Germany, Volkswagen Financial Services AG took first place in the well-known employer competition, “Great Place to Work”, in the 2,001–5,000 employees size range. Volkswagen Leasing GmbH was honored for its sustainable fleet management program in the Germany-wide “365 Orte im Land der Ideen” competition. Together with the German Nature and Biodiversity Conservation Union (NABU), Volkswagen Leasing encourages fleet managers to make their fleets “greener” and use them in line with this, and presents the “DIE GRÜNE FLOTTE” environmental award for ecologically responsible fleet management. In addition, Volkswagen Leasing makes a contribution to a NABU project every time an environmentally friendly car is registered.

Volkswagen Financial Services AG was highly successful with asset-backed securities (ABS) issues in 2012. Receivables amounting to a total of €5.7 billion were securitized on the capital market worldwide via a total of seven ABS transactions. In the first quarter of 2012, Volkswagen Financial Services AG marketed Japanese loan receivables for the first time in the Driver Japan One transaction. This was the first public securitization transaction using receivables from a European automobile manufacturer in Japan. The Driver Brazil One securitization transaction followed in July 2012; this makes Brazil the fifth country after Germany, the United Kingdom, Spain and Japan in which Volkswagen Financial Services is active on the capital market with its Driver platform.

Volkswagen Financial Services continued to expand its international footprint in the reporting period. In order to strengthen its sales activities in Poland, it acquired the remaining shares in VOLKSWAGEN BANK POLSKA S.A. and Volkswagen Leasing Polska Sp.z o.o. and consolidated the companies. In Portugal, a bank branch offering financing started operation. In China, the Volkswagen Finance Co. affiliate was consolidated for the first time due to its sustained growth. In addition, the establishment of Volkswagen New Mobility Services Investment Co., Ltd. specifically expanded the Group’s product offering beyond classic consumer credit. In Belgium, Volkswagen Financial Services AG entered the financial services business by establishing the Volkswagen D´Ieteren Finance S.A. joint venture together with its Belgian importer. Volkswagen Financial Services AG is planning to enter into a new strategic partnership with Allianz SE in 2013 to boost its car insurance activities. The aim is to pave the way to becoming a direct insurer in the area of car insurance.

The number of new finance, leasing and service/ insurance contracts signed in fiscal 2012 amounted to 3.8 million, a 21.0% increase on the prior-year figure. The number of contracts in the Customer Financing/Leasing area was up 14.5% on the previous year to 6.4 million as of December 31, 2012. The number of contracts in the Service/Insurance area rose to 3.3 million, up 21.9% on the previous year. The total number of contracts reached a new record of 9.6 million (+16.9%). Based on unchanged credit eligibility criteria, the share of financed or leased vehicles was 27.5% (36.3%) of total Group delivery volumes. This decline was due to the inclusion of the Chinese market since the beginning of 2012. In China, the share of leased or financed vehicles is significantly below the average in other automotive markets. Volkswagen Bank direkt was managing 1,438 thousand accounts at the end of the reporting period (previous year: 1,442 thousand).

The number of contracts in our fleet management business at the end of 2012 was up 1.5% on year-end 2011; our joint venture LeasePlan Corporation N.V. managed around 1.4 million vehicles.

Volkswagen Financial Services employed 10,133 people as of the reporting date.

Volkswagen Financial Services AG’s conference and financial center (photo)

Volkswagen Financial Services AG’s conference and financial center

SALES REVENUE AND EARNINGS

Volkswagen Financial Services’ sales revenue increased by 12.8% in fiscal year 2012 to €17.9 billion. Higher volumes, stable margin trends and lower risk provisions increased the operating profit to €1.4 billion (€1.2 billion). Volkswagen Financial Services once again made a significant contribution to the Volkswagen Group’s earnings.

9.6 million

CONTRACTS AS OF DECEMBER 31, 2012

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VOLKSWAGEN FINANCIAL SERVICES

 

 

 

 

2012

 

2011

 

%

1

Excluding provisions and deferred tax liabilities.

2

Profit before tax as a % of average equity (continuing operations).

3

Liabilities as a % of equity.

Number of contracts

 

thousands

 

9,640

 

8,245

 

+16.9

Customer financing

 

 

 

4,551

 

3,930

 

+15.8

Leasing

 

 

 

1,808

 

1,623

 

+11.4

Service/Insurance

 

 

 

3,281

 

2,691

 

+21.9

Receivables from

 

€ million

 

 

 

 

 

 

Customer financing

 

 

 

48,779

 

42,979

 

+13.5

Dealer financing

 

 

 

12,942

 

11,942

 

+8.4

Leasing agreements

 

 

 

15,476

 

14,407

 

+7.4

Direct banking deposits

 

€ million

 

22,004

 

21,373

 

+3.0

Total assets

 

€ million

 

111,053

 

97,455

 

+14.0

Equity

 

€ million

 

11,312

 

9,785

 

+15.6

Liabilities1

 

€ million

 

95,630

 

84,290

 

+13.5

Equity ratio

 

%

 

10.2

 

10.0

 

 

Return on equity before tax2

 

%

 

13.4

 

14.2

 

 

Leverage3

 

 

 

8.5

 

8.6

 

 

Operating profit

 

€ million

 

1,410

 

1,203

 

+17.1

Profit before tax

 

€ million

 

1,415

 

1,309

 

+8.1

Employees at Dec. 31

 

 

 

10,133

 

8,335

 

+21.6

FURTHER INFORMATION www.vwfsag.com

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