The ratings on Volkswagen Financial Services AG (VWFS) are based on its strategic importance for and close integration into the operations of its owner, Volkswagen AG (VW; A+/Stable/A-1). The ratings also reflect VWFS' sound asset quality, profitability, and capitalization, and its limited business diversification. VWFS acts as the holding company of several European and Asian finance and leasing subsidiaries of the VW group, in which six domestic entities including Volkswagen Bank GmbH (VW Bank), the largest and wholly owned subsidiary, and VWFS are run like a virtual company. Because of the close integration of domestic and foreign subsidiaries, Standard&Poor's analysis focuses on both VWFS and VW Bank. Furthermore, Standard&Poor's regards captive finance companies, that is, finance
