South America

South America

Germany

During the reporting period, demand for passenger cars in In Germany, new passenger car registrations were down South America exceeded the previous all-time high recorded slightly year-on-year. The 2.9% decline to 3.1 million in 2011. In Brazil, new passenger car registrations rose vehicles is entirely attributable to buyer reluctance among 7.7% to 2.9 million vehicles. The new record figure is private customers. The rising uncertainty about global eco- mainly attributable to a temporary tax cut. Only vehicles nomic developments affected demand in the second half of produced in Brazil benefited from this measure, so the con- the year, in particular. The market volume for light com- tribution made by imports declined sharply in the second mercial vehicles also failed to reach the previous year’s half of 2012. At 442 thousand units, Brazil’s vehicle level. Overall, new registrations declined by 6.2% to 226 exports were much lower than in the previous year (–20.1%). thousand vehicles. The 2012 domestic production and export This decline was mainly caused by the lower exports to figures were also lower than in the prior-year period. Argentina. Passenger car production declined by 3.7% to 5.4 million

In the Argentinian automotive market, demand was vehicles, while passenger car exports decreased by 2.6% down 5.4% on the previous year’s record, at 587 thousand to 4.1 million units. This was mainly due to substantially units. This is primarily attributable to the import restric- lower exports to the eurozone as a result of the ongoing tions imposed by the Argentinian government to protect recessionary trends.

domestic industry, which made imports considerably more difficult and caused them to decline steeply.

North America In the North American market, demand for passenger cars Asia-Pacific

and light commercial vehicles (up to 6.35 tonnes) rose Alongside North America, the Asia-Pacific region was the sharply in the reporting period. The 12.4% increase to main driver of global demand for cars in 2012. The

17.2 million units led to the best sales figures for the past number of new passenger car registrations in the region five years. In the USA, sales rose by 13.4% to 14.5 million rose by 13.3% to an all-time high of 25.7 million vehicles. vehicles, largely due to higher replacement demand and In China, the market volume amounted to 13.5 million favorable lending conditions. The US market registered passenger cars in 2012. The high growth rate of 9.3% was the highest absolute increases in unit sales worldwide in largely due to foreign brands. 2012, but was still well below the pre-crisis levels achieved

Growth in the Indian passenger car market again accel- The sales figures for mid-sized and heavy trucks in North erated in the reporting period, up 11.1% to 2.5 million America rose by 11.9% to 427 thousand units in 2012. Of vehicles. This new high was recorded despite high interest this figure, 340 thousand vehicles were sold in the US rates, rising fuel costs and weaker economic growth than market. Despite the economic uncertainty that took hold in in the previous year. The Indian automotive industry bene- the second half of the year and the ensuing decline in fited in particular from the much wider range of diesel incoming orders, the truck market grew 10.9% year-on- models on offer.

year.

The Japanese passenger car market recorded a partic- Vehicle sales in South America declined in 2012. At ularly large increase in new registrations, which rose 183 thousand units, vehicle sales were down 18.0% on the 29.5% to 4.6 million vehicles. The positive development is previous year. Brazil, the continent’s largest market, attributable in particular to the previous year’s weak overall declined considerably compared with 2011 due to the market as a consequence of the natural disasters, as well as introduction of the new Euro 5 emission standard and the government subsidy programs for energy efficient vehicles.

weak economic performance. Truck sales recorded a 19.6% decline to 133 thousand vehicles.

DEMAN D FOR TRUCKS DECLI N ES, BUSES EXCEED PRIOR-YEAR

With the exception of the Chinese market, the Asia-

FIGU RE

Pacific region almost matched the prior-year sales levels in As industrial goods, commercial vehicles are influenced by fiscal year 2012. New registrations amounted to 533 thousand the general economic environment, which means that the vehicles. market is highly cyclical. Although volumes are significantly

The world’s largest truck market, China, significantly lower, the complexity of the trucks and buses range even underperformed the previous year’s figure in 2012 due to exceeds that of passenger cars, since they are produced in weaker economic growth, a slower rise in investments and accordance with the customers’ requirements. The prior- lower consumer demand. A total of 916 thousand units ities for commercial vehicle customers are overall running were delivered, 22.0% fewer than in 2011. costs, vehicle reliability and the service provided.

In India, the high level of the previous year was not In fiscal year 2012, global demand for mid-sized and matched in 2012 due to the slowdown in economic growth. heavy trucks with a gross weight of more than six tonnes At 265 thousand units, sales of mid-sized and heavy trucks declined overall. A total of 2.5 million vehicles were sold were 15.3% lower year-on-year. worldwide, representing a decrease of 8.9%. The growth

In fiscal year 2012, the global market for buses markets of China, Brazil and India fell significantly short recorded an increase against the previous year. Western of the previous year’s level in some areas due to the general Europe was the only region to see a decline in bus sales in economic and regulatory conditions. In Europe, the 2012. By contrast, China, the world’s largest bus market, continuing sovereign debt crisis and weak economic situ- registered significant growth mainly as a result of the rising ation negatively impacted demand for trucks and buses. In demand for coaches. contrast to the global trend, sales in the USA and Russia were up significantly year-on-year.

TREN DS I N TH E M ARKETS FOR POWER ENGI N EERI NG

In Western Europe, vehicle sales declined by 10.1% to The markets for power engineering are subject to differing

a total of 236 thousand units due to the uncertainty caused regional and economic influences. Consequently, their busi- by the sovereign debt crisis and the weak state of the ness growth trends are generally independent of each other. economy.

In the area of shipbuilding, the high, albeit declining Central and Eastern Europe recorded extremely high number of deliveries further increased the excess capac- growth in the mid-sized and heavy trucks segments. A total ities in the merchant fleet. The resulting decline in shipping of 175 thousand new vehicles were sold in the reporting rates combined with high operating and fuel costs led to period, surpassing the prior-year figure by 23.9%. The lower orders for new merchant ships. Ongoing difficulties strong economic situation in Russia, the largest market in in ship financing exacerbated this trend. By contrast, Eastern Europe, led to a 23.3% rise in demand. However, orders for offshore and special ships remained buoyant. the market there slowed down in the second half of the The special market for government vessels also performed year after the introduction of a new recycling fee for well. vehicles.

MANAGEMENT REPORT 157

Business Development Shares and Bonds Results of Operations, Financial Position and Net Assets Volkswagen AG (HGB) Value-Enhancing Factors Risk Report Report on Expected Developments

With moderate economic growth and global demand for This was mainly driven by the stable lending conditions energy still high, the market for decentralized diesel and and interest rates, as well as growing interest in modular gas engine power plants slowed down slightly in 2012, mobility products. although growth remained relatively high. While there was

The Brazilian market continued its growth trajectory in

a slowdown in the diesel and oil fired power plants market, the reporting period, strengthened by an increase in retail as expected, orders for gas fired power plants increased, lending. As in the previous year, the rise in individual confirming the trend towards this type of power plant.

mobility needs led to substantial sales growth of Consorcio, Orders for new compressors and turbines declined

a lottery-style financing product. In Argentina, demand for slightly due to the weaker economic growth. Although there automotive financial services increased amid the weaker was a high level of interest from customers, economic uncer- economic growth. tainties and difficult financing conditions led to order place-

The market for financial services in the Asia-Pacific ment delays.

region performed very well in 2012. In China, there is fur- Industrial facilities where turbomachinery, turbo gear ther potential to acquire new customers for automotive- units and slide bearings are used still have a significant related financing, as at the moment only around 15% of investment requirement. Oil and gas investments remained vehicle purchases are loan-financed. Higher domestic high due to the rise in oil prices.

demand in Japan positively impacted financial services The development of offshore wind energy has fallen well sales volumes. Demand for automotive financial services short of expectations so far. Technical problems, partic- continued to rise in India. ularly as regards transmission of power to the mainland,

and difficult financing conditions have delayed the construc- N EW GROUP MODELS I N 2012

tion of new wind farms. The Volkswagen Group selectively expanded its model portfolio in key segments in 2012. The first products based

DEMAN D FOR FI NANCIAL SERVICES

on the Modular Transverse Toolkit ( MQB ) were also Global demand for automotive-related financial services introduced. This will form the basis for many other new remained high in the reporting period. Customers are models in the coming years. With the new Group brands, paying closer attention to the total cost of mobility and are Porsche and Ducati, the Group’s range now comprises increasingly deciding just to use a car, rather than actually around 280 passenger car, commercial vehicle and motor- buying one. In view of this, new mobility services such as cycle models and their derivatives. The Group covers almost car sharing are gaining in importance.

all key segments and body types, with offerings from small The European markets experienced higher demand for cars to super sports cars in the passenger car sector, and captive automotive-related financial services in 2012, from small pickups to heavy trucks and buses in the despite a decline in new car sales. The close cooperation commercial vehicles sector, as well as motorcycles. We will between vehicle manufacturers and their financial service continue to resolutely move into open market segments that providers, which produced attractive, customer-oriented offer profitable opportunities for us. campaigns, proved an effective growth driver.

The Volkswagen Passenger Cars brand premiered a The leasing sector in Germany continued to expand in large number of new vehicles in 2012. As the highest- both the commercial vehicle and passenger car segments volume Group model and one of the biggest-selling cars in fiscal year 2012.

worldwide, the focal point was the new, seventh generation In North America, demand for financial services stabi- Golf, which is still setting new standards in the compact lized at a high level. In the USA, the market for financing segment. We moved into key volume and niche segments and leasing was well diversified: demand for new vehicle with the four-door up! and the Passat Alltrack offroad financing from captive financial service providers was still estate model. The Polo GTI, the new Beetle Convertible and high despite intense competition from noncaptive banks. the upgrade to the CC further strengthened Volkswagen’s Demand for financial services continued to rise in Mexico.

brand image. Volkswagen took account of special customer

and market requirements in key regions outside Europe Rapid, the Toledo will open up new market segments for through product upgrades and country-specific models. SEAT . The upgrades of the high-volume Ibiza product The biggest selling model in Brazil overall, the Gol, and its family and the launch of the four-door version of the Mii notchback derivative, the Voyage, were upgraded in 2012. small car were also significant. In China, the compact notchback saloons Sagitar and New

New Group brand Porsche emphasized its dominance Lavida and the upgraded New Bora were launched. In of the global premium and sports segment with its new addition, a successor to the Santana – the first Group model models. The relaunch of the iconic 911 Carrera was a high- to be sold in China – was introduced after almost 30 years. light. The updated Porsche Boxster and Porsche Boxster S Looking to the future, Volkswagen drove forward the electri- roadsters with mid-mounted engines, now in their third fication of its product range with the launch of the Jetta generation, boast improved dimensions and significantly Hybrid – the Group’s first hybrid model in the compact class. reduced weight and fuel consumption. With GTS versions Another highlight was the eco-up!, the most economical gas- of the Panamera and Cayenne, Porsche expanded its offering powered series-produced car, which generates just 79 g/km in these two ranges with particularly sporty derivatives.

of CO 2 . The Group’s luxury brands also introduced fascinating The Audi brand put its technical and sporting expertise new models and derivatives in the market in the reporting to the test in 2012 and again met its own high standards. In period. Bentley debuted the V8-powered Continental GT the premium compact segment, the popular Audi A3 was and Continental GTC models, as well as the Continental GT updated to be the first Group vehicle based on the MQB .

Speed with a W12 engine. Lamborghini presented a new, Additional derivatives were launched in the form of the even more striking design of its most successful super sports Audi A4 allroad, RS 4 Avant, A6 allroad quattro, S6 saloon car ever, the Gallardo LP 560-4 as a Coupé and Spyder. and Avant, S7 Sportback and S8 models, which occupy Bugatti confirmed its unique position by launching the different premium segments. Key volume models, including Veyron Grand Sport Vitesse, the fastest roadster of all time the Audi A4 saloon and Avant, the Audi Q5, and the with a top speed of 431 km/h. versions of the Audi A4 and Audi A6 specially adapted with

Volkswagen Commercial Vehicles introduced two new longer wheelbases for markets such as China, were special models – the Caddy Edition 30 and the Multivan upgraded or modernized. The Audi RS5 Coupé was also Edition 25 – and thus confirmed its decades-long dominance upgraded. The Audi brand demonstrated its growing of the light commercial vehicles market. The California electrical expertise with the launch of the Audi A6 hybrid Edition Beach strengthened the brand’s presence in the and Audi A8 hybrid.

camper van market. Another fuel-efficient commercial With the new Rapid, a locally produced version of which vehicle was launched in the form of the Blue TDI Crafter

was launched on the Indian market in 2011, the ŠKODA panel van.

brand presented a compact notchback saloon, specially In 2012, the first Scania trucks whose engines meet the designed for international growth markets like China and new Euro 6 emissions standard were registered. Russia, as well as price-sensitive customer segments in

MAN launched the new premium NEOPLAN Jetliner, Europe. Like the up! at Volkswagen, the four-door Citigo which can be used as both a public service bus and coach.

supplements the offering in the expanding small car segment.

Spanish brand SEAT updated the Leon – again based on the MQB . Its sporty appearance stands out in the compact, everyday hatchback segment. As a sister model to the ŠKODA

MANAGEMENT REPORT 159

Business Development Shares and Bonds Results of Operations, Financial Position and Net Assets Volkswagen AG (HGB) Value-Enhancing Factors Risk Report Report on Expected Developments

VOLKSWAGEN GROU P DELIVERI ES BY MONTH Vehicles in thousands

VOLKSWAGEN GROU P DELIVERI ES

Europe, China, Brazil, the USA , Russia, Argentina and The Volkswagen Group delivered more than 9,275,909 Mexico are currently the key sales markets for the Group. vehicles to customers worldwide in 2012. This corresponds The Group continued to extend its strong competitive to an increase of 1,010,643 or 12.2% compared with the position in the reporting period thanks to its wide range of previous year. The chart on this page shows that the attractive and environmentally friendly models. We have delivery figures were higher in all twelve months of the increased our market share in key core markets and again reporting period than in the same months of the previous recorded an encouraging global increase in demand. year. Details for deliveries of passenger cars and light

The Volkswagen Group delivered 9,074,283 passenger commercial vehicles, and of trucks and buses, are provided cars and light commercial vehicles to customers in 2012. separately in the following.

Since August 1, 2012, these figures also include Porsche brand vehicles. The previous year’s record figure was

VOLKSWAGEN GROU P DELIVERI ES*

exceeded by 11.2%. With the exception of the SEAT brand,

which was hit particularly hard by the difficult market conditions in Western Europe, and Bugatti, all Group brands

Passenger cars and

surpassed their 2011 sales figures. Volkswagen Passenger

light commercial

Cars, Audi, ŠKODA and Volkswagen Commercial Vehicles

all recorded their best ever delivery figures. Bentley and

Trucks and buses 201,626

Lamborghini also registered strong growth rates. Demand

Total 9,275,909

for Volkswagen Group models was higher than in the

* Deliveries for 2011 have been updated to reflect subsequent statistical trends.

prior-year period in virtually all markets outside Western Europe. The table on page 161 gives an overview of deliveries to customers in the different markets and of the respective

PASSENGER CAR AN D LIGHT COMMERCIAL VEHICLE DELIVERI ES

passenger car market shares held by the Volkswagen With its brands, the Volkswagen Group has a presence in Group. We describe the demand trends for Group models all relevant automotive markets around the world. Western in the individual markets in the following sections.

WORLDWI DE DELIVERI ES OF TH E GROUP’S MOST SUCCESSFUL MODELS I N 2012 Vehicles in thousands

Golf 836 Jetta

449 ŠKODA Octavia

410 Audi A4

Deliveries in Europe/Remaining markets

Deliveries in Germany

The overall market slowdown in Western Europe in 2012 Group deliveries to customers in the German market resulted in our deliveries to customers in this region increased by 1.9% in fiscal year 2012 compared with the declining year-on-year. Our sales figures were down on the previous year. By contrast, the overall passenger car market previous year in all major markets here, apart from volume declined by 2.9%. The Tiguan, CC, Touareg, Audi Germany and the United Kingdom. Vehicles sold in Western A1, Audi A6, ŠKODA Roomster, ŠKODA Yeti, SEAT Ibiza, Europe accounted for 33.3% (previous year: 38.4%) of the SEAT Leon and Crafter models experienced the highest Group’s total delivery volumes. Except for SEAT , all volume growth rates. The new up!, Beetle, Golf Cabriolet, Audi Q3, brands sold more vehicles in the reporting period than in ŠKODA Citigo and SEAT Mii models were also very popular. the previous year. The Tiguan, Audi A6, ŠKODA Roomster, At the end of the reporting period, eight Volkswagen Group ŠKODA Yeti, SEAT Alhambra, Amarok and Crafter models models led the Kraftfahrtbundesamt ( KBA – German Federal all registered positive growth rates. The new up!, Beetle, Motor Transport Authority) registration statistics in their Golf Cabriolet, Audi Q3, ŠKODA Citigo and SEAT Mii models respective segments: the up!, Polo, Golf, Passat, Touran, were also very popular. The Volkswagen Group’s share of Tiguan, Audi A6/A7 and Caddy. The Golf continued to top the overall passenger car market in Western Europe rose to the list of the most frequently registered passenger cars in 24.4% (23.0%).

Germany. We lifted the Volkswagen Group’s market share The Volkswagen Group’s sales figures in Central and in the German passenger car market to 37.7% in the Eastern Europe surpassed the prior-year level by 17.6%. reporting period (previous year: 35.9%), further cementing We recorded the highest growth rates in Russia (+38.8%) our market leadership. and the Ukraine (+29.6%). The Polo Sedan, Tiguan, Passat,