Summary of expected developments in 2013 and 2014

The Volkswagen Group’s Board of Management expects competition in the international automotive markets to increase further in the coming years. The markets in which the Group’s brands operate are becoming increasingly challenging, particularly in Western Europe. The development of the automotive sector remains dependent on global economic developments, which continue to be shrouded in considerable uncertainty. The financial markets still entail risks resulting above all from the strained debt situation of many countries.

The global markets for passenger cars and light commercial vehicles are facing a difficult year in 2013 with forecasts of merely slight growth. We expect demand to rise more strongly again in 2014. The strongest growth in 2013 is likely to be in the Asia-Pacific region and in the USA, whereas in Western Europe in particular the market volume is expected to decline. We anticipate that demand will probably rise again in all regions in 2014. The Volkswagen Group has a large share of many important markets around the world. We are strengthening this position further by expanding production capacities and building more local production facilities that will, in some cases, produce vehicles developed specifically for the countries concerned.

Following the substantial dip in demand for trucks and buses in the reporting period, we expect the total volume in 2013 and 2014 in the markets that are relevant for the Volkswagen Group to remain at the same level as in 2012.

We believe that automotive financial services will continue to grow in importance over the coming years.

The Volkswagen Group’s unique brand portfolio covering almost all segments from motorcycles through subcompact cars to heavy trucks and buses, its steadily growing presence in all major markets in the world and its wide range of financial services give us decisive competitive advantages. We offer an extensive range of environmentally friendly, cutting-edge, high-quality vehicles for all markets and customer groups that is unparalleled in the industry. We therefore estimate that our deliveries in 2013 and 2014 will exceed the prior-year figure in each case.

Our Chinese joint ventures, as well as the new production facilities in China, Russia, the USA and India, will make a significant contribution to this development.

Challenges will come from the difficult market environment and increasingly fierce competition as well as interest rate and exchange rate volatility and considerable fluctuations in raw materials prices.

We expect sales revenue in the Automotive and Financial Services Divisions to increase in 2013 and 2014 as against 2012. Our goal for the Volkswagen Group’s operating profit is to match the 2012 figure in 2013, and to exceed it in 2014. We believe that this will be the case for the Passenger Cars Business Area and the Commercial Vehicles, Power Engineering Business Area – which remains affected by high write-downs relating to purchase price allocation, among other things – and the Financial Services Division. Starting in 2013, we will report the Volkswagen Commercial Vehicles brand as part of the Commercial Vehicles, Power Engineering Business Area, in line with the management structure created.

We aim to achieve a sustainable return on sales before tax at Group level of at least 8%. The average ratio of capital expenditure to sales revenue in the Automotive Division will fluctuate around a competitive level of 6–7%. Our goal is also to maintain our positive rating compared with the industry as a whole and to continue our solid liquidity policy.

The decisive advantages that the Volkswagen Group can exploit to master the challenges of the automotive future and to achieve its Strategy 2018 targets are its unique brand portfolio, its young, innovative and environmentally friendly model range, its broad international presence with local value added in many key regions, the significant synergy potential offered by the Group-wide development of technologies and models, and finally its financial strength. We are working to make even more focused use of the strengths of our multibrand group by constructing new plants, developing technologies and platforms, and agreeing strategic partnerships. Disciplined cost and investment management remains an integral part of our Strategy 2018.

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