Volkswagen AG plans to issue about 800 million yuan, or $128 million, of asset-backed securities in China, according to an unnamed source that spoke with Bloomberg News. If successful, the securitized notes will be backed by Volkswagen Financial (China) Co., a unit of Volkswagen Financial Services AG, with China International Capital Corp. as the sale’s manager.
Volkswagen will be following in the footsteps of Ford Automotive Finance China, Ford Motor Credit Co.’s captive, which completed its first asset-backed securitization under China’s most recent ABS pilot program, also valued at 800 million yuan, or $128 million, in May.
While it seems the German manufacturer is preparing to grow in the Chinese market, it is casting a wider net in Europe as well.
Already the largest carmaker in Europe, Volkswagen AG recently sold 2 billion euros, or $2.7 billion, in preferred stock to raise funds to takeover Scania AB, a Swedish truck maker.
The €2 billion is just part of the €6.7 billion needed to gain complete control of Scania in an effort to compete with leading brands like Daimler AG and Volvo AB, with additional funding coming from hybrid capital and reserves. As of May 30th, Volkswagen controlled 98% of Scania, up from the 62% it controlled in February when the company first made its bid for takeover.
