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Volkswagen Financial Services: Difference between revisions
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This experimental article highlights the answers to some questions, which have been previously posed. | This experimental article highlights the answers to some questions, which have been previously posed. | ||
== How is demand going to continue in 2023? Will this influence the number of contracts for Financial Services? == | == How is demand going to continue in 2023? Will this influence the number of contracts for Financial Services?<ref>https://www.volkswagenag.com/presence/investorrelation/publications/interim-reports/2022/Q3_2022_e.pdf page 13</ref> == | ||
For the <u>first three quarters of 2022</u> '''demand''' for automotive financial services was '''buoyant''' due to <u>key interest rates</u> in the main currency areas, which have remained '''low''' for now. The rise in interest rates in Q3 has so far had a '''minor impact''' on the financial services market. | For the <u>first three quarters of 2022</u> '''demand''' for automotive financial services was '''buoyant''' due to <u>key interest rates</u> in the main currency areas, which have remained '''low''' for now. The rise in interest rates in Q3 has so far had a '''minor impact''' on the financial services market. | ||
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The positive trend in the financing of used vehicles continued in the first nine months of 2022; In particular, the sale of after-sales products such as servicing, maintenance and spare parts agreements increased. | The positive trend in the financing of used vehicles continued in the first nine months of 2022; In particular, the sale of after-sales products such as servicing, maintenance and spare parts agreements increased. | ||
==Are there any big risks in the current economic environment? Clients unable to pay?== | ==Are there any big risks in the current economic environment? Clients unable to pay?<ref>Half-yearly Financial Report 2022 Volkswagen Leasing GmbH | ||
(January - June 2022) | |||
https://www.vwfs.com/en/investor-relations/volkswagen-leasing-gmbh/interim-reports-and-half-yearly-financial-reports.html | |||
Page 9</ref>== | |||
As stated before, the '''rise in interest rates''' in Q3 has so far had a <u>minor impact</u> on the financial services market. | As stated before, the '''rise in interest rates''' in Q3 has so far had a <u>minor impact</u> on the financial services market. | ||
Despite the <u>many challenges</u> that continue to persist, the v'''olume of existing contracts''' at Volkswagen Leasing GmbH is '''forecast to be again slightly up''' on the prior-year level at the end of the year. That's another risk taken of from the list. The <u>provision for credit risks</u> was r<u>aised substantially</u> to take account of credit risks that have arisen from crisis situations and the resulting uncertainty about the global geopolitical situation. | Despite the <u>many challenges</u> that continue to persist, the v'''olume of existing contracts''' at Volkswagen Leasing GmbH is '''forecast to be again slightly up''' on the prior-year level at the end of the year. That's another risk taken of from the list. The <u>provision for credit risks</u> was r<u>aised substantially</u> to take account of credit risks that have arisen from crisis situations and the resulting uncertainty about the global geopolitical situation. | ||
==If number of contracts was to stay the same, will they become less valuable to the company?== | ==If number of contracts was to stay the same, will they become less valuable to the company?<ref>https://www.volkswagenag.com/presence/investorrelation/publications/interim-reports/2022/Q3_2022_e.pdf | ||
Page 35</ref>== | |||
===='''Let's say demand is going down, prices go down, then so will the amount of money needed for financing a new car with VW Financial Services?'''==== | ===='''Let's say demand is going down, prices go down, then so will the amount of money needed for financing a new car with VW Financial Services?'''==== | ||
I don't think this will be a problem, as I <u>don't see a reduction</u> in the number of contracts. | I don't think this will be a problem, as I <u>don't see a reduction</u> in the number of contracts. | ||
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== Which percentage of cars in VW Financial are lease vehicles and have to be resold? → Would a drop in used cars prices cause a problem?== | == Which percentage of cars in VW Financial are lease vehicles and have to be resold? → Would a drop in used cars prices cause a problem?== | ||
In <u>Q3 2022 VW CC</u>, they said that there's an <u>increased share of leasing contracts</u> in the fleet business. Even if used car <u>prices drop</u> this may <u>not</u> be a problem. As most cars would be <u>cheaper</u>, most of the cars that VW sells after their lease expires will get <u>sold more easily</u> because of the lower prices. Also, the <u>positive trend in the financing of used vehicles</u> continued in the first nine months of 2022; in particular, the sale of after-sales products such as servicing, maintenance and spare parts agreements <u>increased</u>. The volume of <u>loans and receivables increased moderately</u> in the first half of fiscal year 2022. <u>VW Financial IR H1</u> : Volkswagen Financial Services is deliberately focusing on the advantages of leasing for electric mobility and assumes that around '''80%''' of Volkswagen Group electric vehicles <u>will be leased or financed</u> through Financial Services. | In <u>Q3 2022 VW CC</u><ref>https://www.volkswagenag.com/presence/investorrelation/publications/interim-reports/2022/Q3_2022_e.pdf | ||
Page 13</ref>, they said that there's an <u>increased share of leasing contracts</u> in the fleet business. Even if used car <u>prices drop</u> this may <u>not</u> be a problem. As most cars would be <u>cheaper</u>, most of the cars that VW sells after their lease expires will get <u>sold more easily</u> because of the lower prices. Also, the <u>positive trend in the financing of used vehicles</u> continued in the first nine months of 2022; in particular, the sale of after-sales products such as servicing, maintenance and spare parts agreements <u>increased</u>. The volume of <u>loans and receivables increased moderately</u> in the first half of fiscal year 2022. <u>VW Financial IR H1</u> : Volkswagen Financial Services is deliberately focusing on the advantages of leasing for electric mobility and assumes that around '''80%''' of Volkswagen Group electric vehicles <u>will be leased or financed</u> through Financial Services. | |||
New vehicle deliveries <u>declined</u>, which consequently also led to a <u>fall in vehicles available</u> on the used vehicle market. Despite this, there was a year on year <u>rise</u> in the number of <u>leases for new vehicles</u>, both for private and for fleet customers. On the other hand, new financing agreements for new and used vehicles, as well as for direct business <u>went down</u> compared with the previous year | New vehicle deliveries<ref>https://www.investmentwiki.org/wiki/Volkswagen:Deliveries</ref> <u>declined</u>, which consequently also led to a <u>fall in vehicles available</u> on the used vehicle market. Despite this, there was a year on year <u>rise</u> in the number of <u>leases for new vehicles</u>, both for private and for fleet customers. On the other hand, new financing agreements for new and used vehicles, as well as for direct business <u>went down</u> compared with the previous year | ||
====== ''More information about car financing and leasing in the US : | ====== ''More information about car financing and leasing in the US : ''<ref>https://fortunly.com/statistics/car-loan-statistics/</ref> ====== | ||
-More than '''85%''' of new cars in US are financed. | -More than '''85%''' of new cars in US are financed. | ||
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== How fast are refinancing conditions for VW Financial worsening and what is the impact of this going to be?== | == How fast are refinancing conditions for VW Financial worsening and what is the impact of this going to be?== | ||
For <u>fiscal year 2022,</u>the Management Board of Volkswagen Leasing GmbH expects the IFRS '''operating result''' to <u>improve significantly</u> compared with the previous year. | For <u>fiscal year 2022,</u>the Management Board of Volkswagen Leasing GmbH<ref>Half-yearly Financial Report 2022 Volkswagen Leasing GmbH | ||
(January - June 2022) | |||
https://www.vwfs.com/en/investor-relations/volkswagen-leasing-gmbh/interim-reports-and-half-yearly-financial-reports.html | |||
Page 9</ref> expects the IFRS '''operating result''' to <u>improve significantly</u> compared with the previous year. | |||
Despite the many challenges that continue to persist, the '''volume of existing contracts''' at Volkswagen Leasing GmbH is <u>forecast to be again slightly up</u> on the prior-year level at the end of the year. | Despite the many challenges that continue to persist, the '''volume of existing contracts''' at Volkswagen Leasing GmbH is <u>forecast to be again slightly up</u> on the prior-year level at the end of the year. | ||