Volkswagen Financial Services

STRUCTURE OF VOLKSWAGEN FINANCIAL SERVICES

Volkswagen Financial Services’ portfolio of services covers dealer and customer financing, leasing, banking and insurance activities, and fleet management. The global financial services activities of the Volkswagen Group, with the exception of the Scania and MAN brands and the financial services business of Porsche Holding Salzburg, are coordinated by Volkswagen Financial Services AG. The principal companies in this division are Volkswagen Bank GmbH, Volkswagen Leasing GmbH and Volkswagen Versicherungsdienst GmbH in Europe, and VW CREDIT, INC. in North America.

As of January 1, 2012, Volkswagen Leasing GmbH is set to acquire dealer-owned rental car company Euromobil, thereby strengthening Volkswagen Financial Services AG’s own mobility business and closing a gap in its mobility concept. The long-term plan is to integrate Euromobil into the “New Mobility” strategic business area.

BUSINESS DEVELOPMENT

With its innovative products along the automotive value chain, Volkswagen Financial Services once again contributed to the Volkswagen Group’s good earnings and sales situation in fiscal year 2011.

At the same time as the up! was presented at the IAA in Frankfurt am Main, Volkswagen Financial Services unveiled a new mobility package there: the up!grade package. The innovative financing model with flexible features offers buyers of the up! greater financial freedom. With AutoCredit², customers are able to choose between two monthly installments. The package is complemented by a new insurance product offering comprehensive protection at an attractive fixed price as well as the option of an annual inspection service. Volkswagen Bank direct presented credit2drive, a new product specially for learner drivers in Germany that allows young learners to obtain a loan to finance their driving test.

The reporting period saw Volkswagen introduce the Quicar concept, an innovative car sharing concept supported by Volkswagen Financial Services AG. Since November 2011, a total of 200 efficient Golf BlueMotion models have been available for short-term rental by customers at 50 stations in the Hanover city area. The Quicar Plus program provides a further 70 vehicles for use over a period of ten hours or more. Both offerings have an attractive, customer-centric tariff system and are particularly easy to use. Customers have the flexibility of being able to book a vehicle online, using an application for smartphones, or through a call center. Volkswagen Bank direct, a key sales partner, manages payment processing.

Volkswagen Leasing GmbH continued to cooperate successfully with Naturschutzbund Deutschland ( NABU – the German Nature and Biodiversity Conservation Union) on environmental and climate protection: the 77 participants in the second “ DIE GRÜNE FLOTTE ” environmental award saved 1,650 tonnes of CO₂ and just under 630,000 liters of fuel with their roughly 9,200 vehicles. The growing number of participants in the environmental award is proof that an environmentally focused fleet strategy increasingly combines ecological responsibility with economy.

In March 2011, Volkswagen Bank GmbH was voted best automotive bank for the fifth successive time. More than 92,000 readers of specialist journal “auto motor und sport” crowned Volkswagen Bank the winner in the “Passenger Car Banks” category, reflecting their high level of satisfaction with the quality and versatility of Volkswagen’s product range.

Volkswagen Financial Services AG was very successful in the asset-backed securities (ABS) market in 2011. Receivables amounting to a total of €5.2 billion were sold in the capital market worldwide through five ABS transactions. Following transactions in Germany and the UK, the Spanish auto ABS market was opened up in the reporting period with the Driver España One securitization transaction.

Volkswagen Financial Services continued to expand its international footprint in the reporting period. In January 2011, a Volkswagen Versicherung AG branch opened in France, where as many as 31,701 guarantee agreements were sold in the course of the year.

At the end of March 2011, Volkswagen Finance Private Limited, an Indian subsidiary of Volkswagen Financial Services AG, received a financial services license from the country’s central bank. Its extensive product offering comprises vehicle finance, automobile insurance, extended warranties and maintenance products for private customers.

The number of new finance, leasing and insurance contracts signed in fiscal 2011 amounted to 3.1 million, 16.2% more than in the prior-year period. The number of contracts in the Customer Financing/Leasing area was up 6.1% on the previous year to 5.6 million as of December 31, 2011. The total number of contracts in the Service/ Insurance area rose to 2.7 million, up 19.8% on the previous year. Overall, the number of contracts reached a new record of 8.2 million. The prior-year figures were adjusted to reflect the current definition. Based on unchanged credit eligibility criteria, financed or leased vehicles accounted for 36.3% (34.9%) of total Group delivery volumes. Volkswagen Bank direkt continued its positive performance in the direct banking business and was managing 1,442,002 accounts at the end of the reporting period (+4.5%).

In the fleet management business, our joint venture LeasePlan Corporation N.V. recorded a total of 1.3 million vehicle contracts at the end of 2011, surpassing the prior-year figure by 2.7%.

Volkswagen Financial Services employed 8,335 people as of December 31, 2011.

Quicar concept

SALES REVENUE AND EARNINGS

Volkswagen Financial Services’ sales revenue increased by 16.6% in fiscal year 2011 to €15.8 billion. Operating profit rose to €1.2 billion (€0.9 billion) due in particular to volume growth and the positive trend in risk provisions. This means that Volkswagen Financial Services once again made a significant contribution to the Volkswagen Group’s earnings.

8.2 million

CONTRACTS AS OF DECEMBER 31, 2011

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