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VW Finance Unit Looks to Match Record 2014 Profit

BRAUNSCHWEIG, Germany, Sept 3 (Reuters) - Volkswagen's finance division is set to at least match last year's record operating profit, its chief executive said, as strong business in core European markets outweighs weak demand in emerging economies.

VW Financial Services handles dealer and customer financing at Europe's biggest automaker, as well as its banking and leasing business. Its operations exclude the Porsche and Scania brands and the Porsche Holding Salzburg distributor.

CEO Frank Witter said in an interview he was optimistic the unit will safely achieve its minimum target of an operating profit not below the 2014 result of 1.7 billion euros ($1.9 billion), some 13 percent of the group total.

European sales at the VW group rose 3.7 percent in the first seven months of the year to 2.45 million cars, whereas volume declined 5.3 percent in China and slumped 23 percent in Latin America.

VW's finance arm may need to scale back operations in Brazil due to tumbling truck and passenger-car demand, Witter said, predicting what he called capacity adjustments without being more specific.

Cost cuts and more efficient product management may help achieve savings of 100 million euros this year at the division, which last year increased its portfolio of credit, leasing and insurance contracts 16 percent to a record 12.4 million contracts, Witter said. ($1 = 0.8862 euros) (Reporting by Jan Schwartz; Writing by Andreas Cremer; Editing by David Holmes)