Volkswagen Financial Services AG

Our stable outlook on VW FS mirrors that on its parent VW. We will assess any effects from the reorganization of captive finance activities when more details become available. Any potential rating action on VW over the next 12-24 months would result in a similar rating action on VW FS. Although unlikely, we could lower our ratings on VW FS if we see a weakening commitment from VW to support its subsidiaries, which could lead us to reassess our view of VW FS as a core entity of VW. This could happen if VW materially reduces its ownership of VW FS or if the captive finance operations are no longer crucial for the group's global strategy. We would upgrade VW

...Germany-based Volkswagen Financial Services AG (VW FS) will maintain its established franchise as a fully-owned captive finance subsidiary of VW. The ratings on VW FS are based on S&P Global Ratings' view of the company's integral role to the group's strategy, which we reflect in its core group status to VW (###+/Stable/A-2), one of the world's largest auto manufacturers. Our assessment implies that we expect VW FS would receive support from VW under any foreseeable circumstances. VW FS has a very important strategic position within the group because it promotes the sale of VW's products by providing financial services and generating income through related services. We do not expect this role will change in the foreseeable future but rather be supported by the important role of promoting the sale of electric vehicles, a clear focus for the group. VW FS currently conducts almost all the group's financial and mobility activities that are not subject to European banking regulations. While...

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