VWFS takes €353m writedown to cover 'Dieselgate' RV risk
Volkswagen Financial Services (VWFS) on Tuesday executed a writedown of €353 million to cover a potential decline in residual value (RV) of VW cars in the wake of 'Dieselgate'.
"We created extensive reserves on the basis of the leasing portfolio so as to be prepared for any possible decline of the residual values," VWFS CEO Lars Henner Santelmann (pictured) was quoted by Automotive News.
To cover the potential impact of the emissions scandal in the U.S., VWFS sister company VW Credit Inc. set aside an additional €96 million in provisions.
'Dieselgate' is also expected to hit VWFS's refinancing costs following a ratings downgrade by Moody's and Standard and Poor's in late 2015.
VWFS yesterday posted an operating result of €1.9 billion for 2015. For this year, it aims to equal the result for 2014, which was €1.7 billion.