...Strong Business Profile: The ratings reflect Volkswagen AG's unparalleled product portfolio in the auto and heavy-truck segments. They also reflect its broad diversification, leading market shares and unrivalled potential for cost savings and economies of scale. Declining but Resilient Margins: The group's operating margin increased to 6.3% in 2014 from 5.9% in 2013, excluding the robust double-digit margins from its Chinese operations reported as joint ventures. However, Fitch Ratings expects profitability to decline slightly in 2015. Margins remain largely commensurate with the ratings and we expect them to rebound to about 6.5% in 2016 as benefits from the group's new platform increase, the product portfolio strengthens further and the group implements new cost-saving initiatives. Moderate Free Cash Flow: Solid funds from operations are absorbed by Volkswagen's ambitious investment plans of EUR86bn to 2019 to support growth, and by increasing dividends. The free cash flow margin was...
