CC, Touareg, the Audi A3, A6 and Q7, the ŠKODA Octavia Deliveries in North America

CC, Touareg, the Audi A3, A6 and Q7, the ŠKODA Octavia Deliveries in North America

and all Volkswagen Commercial Vehicles models experienced Demand for Group vehicles in the US market grew by higher demand in Central and Eastern Europe than in the 34.2% year-on-year, outperforming the positive trend in previous year. The new Jetta, Audi Q3 and ŠKODA Citigo the overall market (+13.4%). The Golf, Tiguan, Passat, models were also very popular.

Audi Q5, Audi A6 and Audi Q7 models recorded the highest The Volkswagen Group’s deliveries in the South African growth rates. In Canada we recorded year-on-year growth market increased by 10.0%. Our entry-level models were of 15.7%. Demand for the Passat, Touareg, Audi A4, Audi particularly sought-after. The Group’s market share of Q5 and Audi A7 models was encouraging there. The Group’s 22.7% remained unchanged.

sales figures in Mexico surpassed the prior-year level by Demand for Group vehicles in the Middle East region 7.8%. Demand increased for the Voyage, Beetle, Passat, grew by 17.6% compared with 2011.

Audi A1 and SEAT Ibiza models.

MANAGEMENT REPORT 161

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

Deliveries in South America

The Fox was also highly popular and sales of the Amarok The Volkswagen Group’s deliveries in the South America almost doubled. region rose 8.2% in the reporting period. After declining

Demand for Volkswagen Group vehicles declined by slightly in 2011, our sales figures in Brazil were again 5.1% in Argentina. However, the Fox, Audi A3 and Saveiro positive in 2012 (+10.7%). This was attributable to a models recorded stronger demand than in 2011. With a temporary tax cut for new vehicles as well as the market market share of 25.0% (previous year: 25.1%), the Volks- launch of the new generations of the Gol and the Voyage. wagen Group maintained its market leadership.

PASSENGER CAR AN D LIGHT COMMERCIAL VEH ICLE DELIVERI ES TO CUSTOMERS BY MARKET 1

Europe/Remaining markets

Western Europe

of which: Germany

37.7 35.9 United Kingdom

Central and Eastern Europe

of which: Russia

11.1 8.9 Czech Republic

Remaining markets

of which: Turkey

17.6 13.7 South Africa

North America 2 841,540

of which: USA

South America

of which: Brazil

of which: China

Volkswagen Passenger Cars

Volkswagen Commercial Vehicles

1 Deliveries and market shares for 2011 have been updated to reflect subsequent statistical trends. The Porsche brand’s deliveries are included as from August 1, 2012. 2 Overall markets in the USA, Mexico and Canada include passenger cars and light trucks.

Deliveries in the Asia-Pacific region

Demand for Volkswagen Group trucks and buses in Western The Volkswagen Group increased sales in the Asia-Pacific Europe amounted to 68,557 units, of which 64,544 were region by 23.3% compared with the prior-year figure, out- trucks. The Western European market continues to be domi- performing the passenger car market as a whole (+13.3%). nated by the ongoing sovereign debt crisis and the uncer- Growth in the region was again driven by the Chinese tainty associated with it. market, which saw demand for Group vehicles rise by

In Central and Eastern Europe, we delivered 27,502 24.5%. Virtually all models contributed to this positive vehicles, of which 26,887 were trucks. In Russia, the positive result. We extended our leadership of the Chinese market trend in the relevant economic sectors, such as the construc- with a market share of 20.8% (previous year: 18.2%).

tion industry and the consumer goods market, continued to Deliveries to customers in the Indian market increased have a positive impact on market growth and thus on our by 2.1%. The Passat, Audi A4, Audi A6 and ŠKODA Rapid Group brands. However, the market slowed down in the models recorded the highest growth rates.

second half of the year after the introduction of a new In Japan, our sales figures were up 14.4% year-on-year. recycling fee for all vehicles. The Beetle, Passat and Audi A6 models were particularly

In the Remaining markets, we sold 21,052 vehicles, of popular.

which 18,626 units were trucks.

Deliveries to customers continued to develop positively In the North American markets we delivered 410 trucks in the other markets in the Asia-Pacific region.

and 1,381 buses in the reporting period. In South America, the Volkswagen Group sold 71,750

DELIVERI ES OF TRUCKS AN D BUSES

vehicles, of which 60,294 were trucks. We delivered 51,137 In fiscal year 2012, the Volkswagen Group delivered 201,626 trucks and 8,833 buses to customers in the Brazilian market. trucks and buses to customers worldwide, with trucks The implementation of the Euro 5 emission standard had a accounting for 180,055 units. In any comparison with the dampening effect. previous year, it should be noted that the MAN brand’s

Sales to customers in the markets of the Asia-Pacific sales figures are included as from November 9, 2011. The region comprised 10,974 units, 9,294 of which were trucks. Scania brand registered a 15.9% decline in deliveries The Group delivered 2,983 trucks and 196 buses in the year-on-year to 67,401 units.

Chinese market.

TRUCK AN D BUS DELIVERI ES TO CUSTOMERS BY MAR KET*

DELIVERIES (UNITS)

Europe/Remaining markets

Western Europe

38,073 +80.1 Central and Eastern Europe

15,194 +81.0 Remaining markets

North America

813 x South America

of which: Brazil

of which: China

24,750 x * The MAN brand’s deliveries are included as from November 9, 2011.

MANAGEMENT REPORT 163

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

DELIVERIES IN THE POWER ENGIN EERING SEGMENT

GROU P FI NANCIAL SERVICES

Orders in the Power Engineering segment are usually part Products and services from Volkswagen Financial Services of major investment projects. Lead times typically range were very popular with customers in the reporting period. from just under one year to several years and partial deliv-

3.8 million new financing, leasing and service/insurance eries as construction progresses are common. Accordingly, contracts were signed worldwide, a 21.0% increase on the there is a time lag between incoming orders and sales prior-year figure. At 9.6 million, the total number of revenue from the new construction business.

contracts at December 31, 2012 exceeded the number at Sales revenue in the Power Engineering segment was the end of 2011 by 16.9%. The number of contracts in the largely driven by Engines & Marine Systems and Turbo- Customer Financing/Leasing area was up 14.5% to 6.4 machinery, which generated about three-quarters of the million and the number of contracts in the Service/ overall revenue volume.

Insurance area increased by 21.9%. Based on unchanged credit eligibility criteria, financed or leased vehicles

ORDERS RECEIVED I N THE PASSENGER CARS AN D LIGHT

amounted to 27.5% (36.3%) of total Group delivery volumes.

COMMERCIAL VEHICLES SEGMENT IN WESTERN EUROPE

The decrease reflects the inclusion of the Chinese market Demand for Group models in Western Europe was down as of the beginning of 2012. The share of leased or financed compared with 2011 due to the declining markets (including vehicles in China is much lower than the average for other Germany). This development was also reflected in the level markets. of orders received in Western Europe as a whole, which

In Europe, the number of new contracts signed increased decreased by 6.6%. In Western Europe excluding Germany, to 2.6 million (2.3 million), increasing the number of the number of orders received was 6.7% lower than in the contracts to 7.0 million (6.2 million) as of December 31, previous year.

2012. The number of financing and leasing contracts was At December 31, 2012, the Volkswagen Group held

4.0 million (3.7 million) at the end of the reporting period, orders for 234,200 vehicles within Germany and for 261,000 an increase on the prior-year figure. The proportion of leased units from the rest of Western Europe. Orders were down or financed vehicles in this region increased to 41.9% 20.6% on the prior-year figure due to the effects of the (36.8%). sovereign debt crisis, the weak economy, rising unemploy-

Germany remained a stabilizing factor and a growth ment and the ensuing uncertainty among market partic- driver in the eurozone in fiscal 2012. The Volkswagen ipants.

Group’s automotive and financial services business also per- formed well in this region. The number of financing and

ORDER I NTAKE IN THE TRUCKS AN D BUSES SEGMENT

leasing contracts for new and used vehicles increased by Orders for trucks and buses were impacted by the difficult 5.3% to 2.4 million. The penetration rate rose to 53.1% industry environment in 2012. This had a particularly (50.3%). In Germany, more than every second vehicle from negative effect on the order intake in our key sales markets, the Volkswagen Group is financed by or leased through especially Western Europe and South America. Overall, we Volkswagen Financial Services. received orders for 206,445 vehicles in the reporting

In North America, a total of 661 thousand new contracts period.

were signed, surpassing the prior-year figure by 32.4%. The total number of contracts grew to 1.5 million, 18.4%

ORDER I NTAKE IN THE POWER ENGI NEERING SEGMENT

higher than at the end of 2011. In the Customer Financing/ The long-term performance of the Power Engineering Leasing area, the number of contracts increased by 12.6% business is determined by the macroeconomic environment. year-on-year to 1.3 million (1.1 million). 54.4% (51.2%) of Major individual orders lead to fluctuations in incoming all vehicles delivered in North America were leased or orders during the year that do not correlate with these long- financed. term trends.

In South America, the total number of contracts was The Power Engineering segment’s incoming orders 697 thousand in the reporting period, 15.3% higher than amounted to €4,016 million in fiscal year 2012. Engines & in the prior-year period. These were almost exclusively Marine Systems and Turbomachinery generated the most attributable to the Customer Financing/Leasing area. The new orders.

proportion of leased or financed vehicles in this region amounted to 27.8% (25.1%).

In the Asia-Pacific region, a total of 226 thousand new the Group’s total production. Our plants worldwide produced contracts were signed, more than tripling the prior-year an average of 37,749 vehicles per working day, an increase figure. The total number of contracts doubled, increasing of 9.6% year-on-year. These production figures do not to 464 thousand. In the Customer Financing/Leasing area, include the highly successful Crafter models produced in the the number of contracts almost tripled and rose to 371 Daimler plants in Düsseldorf and Ludwigsfelde, or the thousand. A total of 6.5% (30.6%) of all vehicles delivered Routan, which is manufactured in cooperation with Chrysler in the Asia-Pacific region in fiscal 2012 were leased or in North America. financed. The decrease is attributable to the inclusion of the Chinese market.

I NVENTORI ES

We significantly increased our production volumes again

SALES TO TH E DEALER ORGAN IZATION

in the reporting period in response to ongoing positive In the reporting period, the Volkswagen Group (including demand in the global automotive markets. Thanks to our the Chinese joint ventures) sold 9,344,559 vehicles to the strict working capital management, the increase in dealer organization worldwide, an increase of 11.8% inventories of raw materials, consumables and supplies as compared with the prior-year figure. Thanks to high well as of work in progress was primarily attributable to demand for Group models in China, the USA and Russia, the consolidation of Porsche. Global vehicle inventories at sales outside Germany rose 13.8% year-on-year. Our Group companies and in the dealer organization were domestic sales were on a level with the previous year. higher on December 31, 2012 than a year earlier. Vehicles sold in Germany accounted for 12.9% (previous year: 14.5%) of the Group’s overall sales.

N UMBER OF EMPLOYEES

With 870,474 vehicles sold worldwide, the Golf was once Including the Chinese joint ventures, the Volkswagen again our biggest seller in 2012, accounting for 9.3% of the Group employed an average of 533,469 people in fiscal Group’s unit sales. The US version of the Passat, the Tiguan, year 2012, an increase of 17.5% year-on-year. Our com- Fox, Audi Q3, Audi Q5, Audi A6, ŠKODA Rapid and Amarok panies in Germany employed 237,080 people on average models recorded significant growth, as did the new Beetle, in 2012; their share of the total headcount increased up!, Audi A1 Sportback, ŠKODA Citigo and SEAT Mii slightly to 44.4% (previous year: 43.1%) due to the inte- models. In addition, very healthy demand was seen in China gration of Porsche. The Volkswagen Group had 525,245 for the Passat, Jetta and Santana model versions available active employees (+8.9%) as of the 2012 reporting date. In there.

addition, 7,804 employees were in the passive phase of their partial retirement and 16,714 young persons were in

PRODUCTION

vocational traineeships (+11.3%). The Volkswagen Group’s The Volkswagen Group produced 9,255,384 vehicles total headcount was 549,763 employees (+9.5%) at the end worldwide in the 2012 reporting period. This corresponds of the reporting period. In addition to the expanded pro- to an increase of 9.0% compared with the prior year. Thanks duction volumes abroad, this increase can be attributed to the positive development in China, our Chinese joint primarily to the consolidation of Porsche and motorcycle ventures expanded their production volume by 20.0%. Our manufacturer Ducati in the reporting period. A total of manufacturing facilities in Slovakia, the USA , Mexico and 249,470 people were employed in Germany (+10.9%), Russia also increased their production figures considerably. while 300,293 were employed abroad (+8.4%). Germany accounted for 25.1% (previous year: 27.8%) of

MANAGEMENT REPORT 165

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

SUMM ARY OF BUSI N ESS DEVELOPMENT

and Germany. Since growth in sales to customers outper- The Board of Management of Volkswagen AG considers formed that of the markets as a whole, we were able to business development in the reporting period to have been further increase our share of the global passenger car positive. In an increasingly challenging market environ- market. ment, the Volkswagen Group exceeded its forecast delivery

This positive performance is due above all to our volumes, sales revenue and operating profit for 2012 – in attractive and environmentally friendly model portfolio, certain areas significantly – and hence further strengthened which impresses customers around the globe. In addition, its market position. Due to the marked increase in sales our high quality and efficiency standards helped us meet revenue, the ratio of capital expenditure to sales in the and even exceed our financial targets. Automotive Division was in line with the forecast, despite

The following table shows an overview of the targets set the higher investments in property, plant and equipment. for the reporting period and the figures actually achieved. Deliveries were at a new all-time high of 9.3 million vehicles, Detailed information on the financial key performance beating last year’s record by 12.2%. We recorded our indicators can be found in the “Results of Operations, Finan- strongest absolute growth in China, the USA , Brazil, Russia

cial Position and Net Assets” chapter starting on page 174.

FORECAST VERSUS ACTUAL FIGUR ES

Measure

Actual 2012 Deliveries

Forecast for 2012

9.3 million Global market share

> 8.3 million

12.8% Sales revenue

> 12.3%

€192.7 billion Operating profit

> €159.3 billion

€11.5 billion Capex/sales revenue in the Automotive Division

~ €11.3 billion

approx. 6%

5.9%

Shares and Bonds