Volkswagen Financial Services AG

This report does not constitute a rating action. Overview Key strengths Key risks Group support from the parent, Volkswagen AG (VW), under any foreseeable circumstances if necessary. Dependence on VW's franchise, reputation, and credit profile. Broad business diversification across European markets with 45% in Germany. Business and earnings concentration on car financing, leasing, and related mobility services. Sound financial risk profile with stable earnings from core subsidiaries. Investor confidence-sensitive wholesale funding profile. We expect VW, one of the world's largest auto manufacturers, would support its fully owned VWFS Europe and VWFS Overseas under any foreseeable circumstances, if needed, considering their core strategic importance. VW completed the reorganization of its captive finance entities on July 1, 2024, streamlining its newly created

... Financial Services AG (VWFS Europe) and Volkswagen Financial Services Overseas AG (VWFS Overseas) mirror the ratings on VW AG (VW). We expect VW, one of the world's largest auto manufacturers, would support its fully owned VWFS Europe and VWFS Overseas under any foreseeable circumstances, if needed, considering their core strategic importance. VW completed the reorganization of its captive finance entities on July 1, 2024, streamlining its newly created VWFS Europe with its core subsidiary, VW Bank GmbH, for its European regulated captive finance business. VW re-named its international non-European businesses VWFS Overseas (known as Volkswagen Financial Services AG before July 1, 2024). Existing profit-and-loss transfer agreements and guarantees affecting the various entities in VW's captive finance business were grandfathered and legally adjusted to VW's organizational setup since mid-2024 and are ultimately directed toward VW as...

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