VW’s Finance Arm Takes $590 Million Hit and Braces for More Pain
The Volkswagen AG logo sits on a sign outside a VW automobile dealership in Berlin.
Photographer: Dominic Verhulst/BloombergThis article is for subscribers only.
Volkswagen AG’s financial-services division boosted provisions for credit and residual-value risks by about 500 million euros ($590 million) in the first six months and warned the fallout from the Covid-19 pandemic could worsen in the second half of the year.
The costs booked mainly covered U.S. operations, because other countries allow deferring some credit payments during the crisis, said Frank Fiedler, the chief financial officer of VW’s lending unit. The postponement could shift ripple effects from shutdowns to the second half.