Summary: Volkswagen Financial Services AG

Core subsidiary of car manufacturer Volkswagen AG. High geographic diversification. Sound financial profile, with stable earnings and strong capitalization. Business concentration on car financing. Dependence on Volkswagen AG's franchise and funding support. Wholesale funding profile. Standard&Poor's Ratings Services' stable outlook on Volkswagen Financial Services (VW FS) mirrors that on its parent, Volkswagen AG (VW AG). It reflects our view that captive finance operations will remain integral to the VW group's overall corporate strategy. We expect VW FS to preserve a satisfactory financial profile over the next two years, supported by the slow economic recovery in most of the markets in which the group operates. As a core entity of VW AG, any rating action on the parent--positive or

...Wholesale funding profile. Outlook: Stable Standard & Poor's Ratings Services' stable outlook on Volkswagen Financial Services (VW FS) mirrors that on its parent, Volkswagen AG (VW AG). It reflects our view that captive finance operations will remain integral to the VW group's overall corporate strategy. We expect VW FS to preserve a satisfactory financial profile over the next two years, supported by the slow economic recovery in most of the markets in which the group operates. As a core entity of VW AG, any rating action on the parent--positive or negative--would translate into a similar action on VW FS. We could lower the ratings on VW FS if we saw weaker commitment from VW AG to support its subsidiaries, which could lead us to reassess our view of VW FS as a core entity of the VW group. This could happen if VW AG were to relinquish its majority ownership in VW FS or if the captive finance operations were to cease to be pivotal to the VW group's worldwide strategy. We view these two...

Summary