Volkswagen expects a difficult 2023 for its financial services unit on the back of economic downturn, higher energy prices and rising interest rates.

“We see that people are more cautious due to recession expectations, and we are not selling so many cars,” said Frank Fiedler, chief financial officer of Volkswagen Financial Services, in Braunschweig on Wednesday evening.

Rising interest rates may weigh on earnings in the coming year, he said, adding that the Volkswagen unit could not make a concrete forecast for its operating profit yet.

The financial unit is still benefiting from high prices for used cars and lower costs for credit and residual value risks in the current year. Operating profit should be in a range of between 5 billion and 5.5 billion euros, Fiedler said.

That compares with a previous forecast of about 5 billion euros, and operating profit of 5.7 billion euros in 2021.