The cost reduction programme is aimed at underpinning business profitability during a time of uncertainty for the industry, as economic growth slows in some countries.

Frank Fiedler, chief financial officer of Volkswagen Financial Services, said the initiative meant he was cautiously optimistic about performance during 2019, adding: “Although considerable macroeconomic uncertainties are impacting the current financial year 2019, we expect the Volkswagen Financial Services division to achieve a good year-end operating result at the previous year's level because we will also be seeing the first fruits of success from our efficiency programme.”

Last year, Volkswagen Financial Services posted a record operating profit of €2.61 billion, a rise of 6.2%, as total assets rose 11% to reach more than €200 billion for the first time.

Volkswagen Financial Services grew in almost all product categories during 2018.

The main growth drivers for the level of contracts were services including maintenance and wear and tear, along with its fleet business in Europe.

Expansion in this area will accelerate with the recent acquisition of a majority shareholding in Europe’s largest fleet management company, FleetLogistics.

Volkswagen Financial Services also recently acquired LogPay Financial Services, providing it with a new revenue stream from servicing local public transport payment processing.

The acquisition of both companies is still subject to the approval of the antitrust authorities.

The finance company recorded a slight decline in the portfolio of insurance contracts following an accounting change, which means figures from Volkswagen Versicherungsdienst, Austria, no longer form part of its figures.

The company was sold to sister company Porsche Bank, which along with Scania Financial Services, is not included in the Volkswagen Financial Services division.

Volkswagen Financial Services global contract growth 2018