Used Car Demand and Low Coverage Costs Boost Expectations for Volkswagen Financial Services, Auto News, ET Auto
BERLIN:Volkswagen Financial Services expects record annual revenue thanks to strong fourth quarter, he said on Wednesday, amid strong demand for used cars, relatively low-risk provisions for auto loans and cheap refinancing opportunities.
This year’s annual operating profit will be well above previous forecast of 4 billion euros ($ 4.51 billion), CFO Frank Fiedler told Reuters, after fourth-quarter results beat all the other quarters this year.
Volkswagen Financial Services, which includes Volkswagen Bank and Porsche Financial Services, achieved operating profit of 2.8 billion euros in 2020.
The company, which said in March that it expected this year’s revenue to match last year’s levels, expected more dealers to fail in the second year of the pandemic , but very few did, Fiedler said.
âWe were able to move our entire branch off as a dealership,â said Fiedler. “And they look good.”
The automaker’s finance division is being restructured from a country-based system to a sales channel organization, divided into dealerships, direct digital sales and fleet customers, he said.
Retail and fleet customers were protected by state aid regimes in some countries, and the automaker’s finance division believed they would see more collapses as those regimes run out, said Fiedler: “We planned this, but it didn’t happen.”