Press Release

Braunschweig, 15 March 2024. Volkswagen Financial Services have concluded the 2023 financial year with another good result. The operating profit of EUR 3.25 billion is the outcome of a normalization of business performance, without the special effects of the past two years. A strong increase in the volume of new contracts had a positive impact. Dr. Christian Dahlheim, Chairman of the Board of Management of Volkswagen Financial Services AG, stated: "Despite the expected decline in earnings, we are satisfied with the past financial year. In 2023, we have achieved some important milestones on our path to becoming a sustainable mobility services provider. In an environment that remains challenging, we expect earnings for the current year to be slightly higher than the previous year." Frank Fiedler, CFO of Volkswagen Financial Services AG, added: "The financial result for 2023 is characterized by negative valuation effects from derivatives and a challenging interest rate environment. Nevertheless, it is the best result in the company's history, if one disregards the years 2021 and 2022, which were influenced by significant special effects." 

Contract development

During the 2023 financial year, the global contract portfolio of Volkswagen Financial Services grew slightly to 22.2 million units (+ 1.4 percent), while new contract acquisitions increased by a significant 11.4 percent to 8.6 million units. The markets in North and South America, which reported strong growth figures, are particularly noteworthy. In North America, the contract portfolio grew to 2.7 million units (+ 2.4 percent), with new contracts totaling 922,000 units (+ 31.2 percent). In South America, the number of current contracts rose to 843,000 units (+ 14.8 percent) and new contracts climbed to 502,000 units (+ 62.9 percent). 

Volkswagen Financial Services can also look back on a strong year in terms of insurance. The business of Volkswagen Autoversicherung, a joint venture with Allianz, grew by around 30 percent to the current figure of over 500,000 contracts. 

The total assets of the Volkswagen Financial Services business division reached a new record high of EUR 268 billion.

Mobility platform and cooperation with Europcar

Volkswagen Financial Services made good progress in 2023 in the process of transforming into a sustainable mobility services provider. The development of the mobility platform is proceeding rapidly. For example, the shares of the company's own car rental business (Euromobil) were transferred to Europcar in order to leverage synergies in the German rental market. In addition, a car subscription service was introduced in France for the Volkswagen Passenger Cars brand in collaboration with Europcar. Long-term rental offerings were also added in Spain, Portugal and Italy, which are particularly relevant in the fleet segment.

The mobility platform is the sales model 2.0 of Volkswagen Financial Services in close cooperation with Europcar. The platform consists of several closely interlinked elements. These include state-of-the-art CRM systems, the ability to offer vehicles over multiple vehicle lifecycles as well as international and cross-brand used car marketing. In addition, efficient residual value and fleet management and comprehensive refinancing options are part of the platform. 

Dahlheim explained: "Together with the Europcar Mobility Group, we are further expanding our leading position in sustainable mobility for private and fleet customers and developing new products that cover the entire spectrum of mobility needs for our customers."

Organizational realignment and importance of the direct bank

The structural realignment that began in 2023 to bundle financial services activities in Europe will be completed by mid-year. As a result, the refinancing instruments of Volkswagen Bank will also be available to other Volkswagen Financial Services companies from the implementation date, such as Volkswagen Leasing with its rapidly growing business. 

Direct bank deposits are becoming an increasingly important source of refinancing. The deposit volume of Volkswagen Bank grew to EUR 37.2 billion in 2023, which is an increase of 47 percent compared to the previous year (EUR 25 billion at the end of 2022). In addition, more than 630,000 new deposit accounts for private customers were opened. Dr. Volker Stadler, Chairman of the Management Board of Volkswagen Bank GmbH, pointed out: "Together with our very good contribution to earnings of EUR 740 million, this growth is a key building block for future expansion in Europe and is therefore of high strategic importance. We will not let up, especially in the deposit business, and will continue to operate in the market with very good interest rates." 

With its current interest rate of 3.4 percent on overnight deposit accounts for six months (offered to new customers), Volkswagen Bank is presently still among the top group of the industry.

Earnings outlook for 2024

Dr. Christian Dahlheim: "Subject to macroeconomic and political developments, we expect an operating result for 2024 that, due to a slight increase in deliveries to customers, will be slightly above the previous year."

* Figures rounded

Volkswagen Financial Services are a business division of the Volkswagen AG group of companies and comprise Volkswagen Financial Services AG along with its associated companies, Volkswagen Bank GmbH, Porsche Financial Services, and the financial services companies in the USA and Canada that belong directly or indirectly to Volkswagen AG – with the exception of TRATON Financial Services and of Porsche Holding Salzburg. The key business fields embrace dealer and customer financing, leasing, bank and insurance activities, fleet management, and mobility services. Volkswagen Financial Services have a total of 18,171 employees worldwide – including 7,691 alone in Germany. Volkswagen Financial Services report total assets of around EUR 268 billion, an operating profit of EUR 3.25 billion, and a portfolio of around 22.2 million current contracts (as at: 31.12.2023)

More information at www.vwfs.com