Volkswagen Financial Services, the group's car-lending and leasing arm, plans cost savings and a reorganization that will affect its workforce, Handelsblatt reports. The unit is under pressure from falling residual values, the worth of used cars when they come back at the end of a lease, and from weaker car sales. No figures for the savings or the job losses have been given.

The unit matters because it has historically cushioned group earnings when production or deliveries soften. That cushion now looks thin. Falling residual values on used combustion-engine cars add to the costs of the switch to electric vehicles and the weakness in China, both already behind the four profit warnings this quarter from Volkswagen, BMW and Mercedes-Benz. The financing unit can no longer offset the core business as it has in past cycles.

It also suggests the cost-cutting wave is spreading. Schaeffler and Bosch had already set out similar responses, as reported on Wednesday. A reorganization at the finance arm takes the same approach into a part of the group once seen as more sheltered from the slowdown in production.

The parent is already shrinking. In September Volkswagen agreed a restructuring deal that adds 50,000 job cuts to the 50,000 already agreed, 100,000 in total at a cost of €16bn, according to Daily Sabah and Rio Times Online. On Sept 18 it cut its 2026 operating return on sales forecast to up to 1%, from a range of 4.0% to 5.5%.

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