Volkswagen dealer in turmoil: “The depreciation of diesel endangers existences”

03/19/2018

Volkswagen dealers in turmoil “The depreciation of diesel endangers existences”

DPA

Volkswagen logo at a dealer in Hannover

The Volkswagen Group navigates surprisingly successfully through the exhaust gas scandal. The worst was probably over, emphasize top managers.

Less confident, meanwhile, the VW dealer. They fear that a major item in the scandal could get stuck with you: According to the association, the decline in the value of diesel cars threatens the existence of many of them. The VW and Audi dealer association makes responsible for the agreed with the car manufacturer calculation models, by the residual value of a vehicle was hedged at the time of return.

“The depreciation thereafter is fully at the expense of the dealer.The vehicles are on the farms and continue to lose value, if it continues to be so negative news about the diesel,” said Association Chief Dirk Weddigen of Knapp. Despite residual value hedging, the trade must cope with massive provisions. “This is absolutely life threatening.” The dealers therefore demand a retrofit of the vehicles. Volkswagen Show stock market chart reject that.

The VW subsidiary Financial Services (VW FS), which is responsible for the car financing and leasing business within the Group, has hardly any impact from the diesel crisis in its latest figures. The operating result again rose to a record level last year, reaching 2.46 (previous year: 2.1) billion euros. In the balance slumbers due to the sinking residual values for diesel cars a risk of around 100 million euros, as CFO Frank Fiedler said.

To mitigate the risk, VW Financial Services has deferred € 50 million for the current financial year. CEO Lars-Henner Santelmann said that the decline in used car prices for VW diesel vehicles is limited exclusively to Germany and abroad is not an issue. In this country, VW Financial Services according to Santelmann’s data contracts for 237,000 diesel vehicles run, the value of which would be affected by the exhaust gas scandal by 400 to 500 euros.

Overall, the financing subsidiary of the Wolfsburg Group has the consequences of exhaust scandal well digested, explained CFO Fiedler. He wants to return to the North American capital market in the first half of the year and raise funds for refinancing there as well. This source had dried up because of the scandal that became known in 2015. In contrast to other financial service providers and banks, VW Financial Services benefited from the tax laws that came into force shortly before Christmas in the USA and achieved a book profit of 1.5 billion euros.

With tailwind from the strong increase in profits and the restructuring of the division, which now also Porsche Bank was integrated into the financial services activities of the entire Group, Santelmann has ambitious plans. The number of financing, leasing, insurance and maintenance contracts is set to rise from the current 19.7 million to 30 million by 2025, he said.

VW Financial Services already has sufficient equity capital for this growth course: 25.6 billion euros – an increase of 21.2 percent within one year. The Tier 1 capital ratio was 17.6 percent at the end of last year – three percentage points above the requirements of the supervisors. The VW Bank, which is part of the VW financial sector, is directly supervised by the European Central Bank (ECB).

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