Volkswagen Financial Services released provisional figures for the fiscal year 2017 and expects to beat last year’s earnings of $2.4 billion, the company announced last week.
According to provisional figures, the portfolio will increase by approximately 8% year over year to more than 19.7 million contracts, which includes contracts in financing, leasing, insurance, maintenance, and inspection. Volkswagen did not provide an expected overall earnings for 2017.
“By the end of 2017, we expect the operating result for the Volkswagen Financial Services division to be significantly higher than in the previous year,” Frank Fiedler, chief financial officer, said in a company statement. “The good result is primarily based on the positive growth of our current contract portfolio and a lower level of refinancing costs than last year.”
Based on provisional figures, the number of customer financing contracts is expected to further rise 5.2% to a projected figure of 6.85 million contracts worldwide. Leasing contracts increased by approximately 14% to around 3.23 million contracts for the end of the fiscal year 2017. For the first time, the level of current and new contracts for 2017 also includes contracts from Porsche Financial Services. Volkswagen did not break out numbers for its different geographical markets.
The volume of new vehicle financing contracts is expected to reach a total of 2.76 million units by yearend, a 6.5% year-over-year increase, according to preliminary figures. In addition, around 1.4 million new leasing contracts — representing an 8.5% YoY increase — is also expected.
“Our successful path over the past few years has continued during the financial year 2017 and we have set course for further growth in the future with our new organizational set-up and our digitalization projects,” says Lars Henner Santelmann, chairman of the management board of Volkswagen Financial Services AG. Volkswagen Financial set up a digital unit in Berlin at the beginning of 2017 to develop online products.
