Volkswagen. Brief description

The Volkswagen Group with its headquarters in Wolfsburg is one of the world ’ s leading automobile manufacturers and the largest carmaker in Europe. In 2011, the Group increased the number of vehicles delivered to customers to 8.265 million (2010: 7.203 million), corresponding to a 12.3 percent share of the world passenger car market.

In Western Europe over one in five new cars (23.0 percent) comes from the Volkswagen Group. Group sales revenue in 2011 totaled € 159 billion (2010: € 126.9 billion). Profit after tax in the 2011 financial year amounted to € 15.8 billion (2010: € 7.2 billion).

The Group is made up of twelve brands from seven European countries: Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN.

Each brand has its own character and operates as an independent entity on the market. The product spectrum extends from low-consumption small cars to luxury class vehicles. In the commercial vehicle sector, the product offering ranges from pick-ups to buses and heavy trucks.

The Volkswagen Group is also active in other fields of business, manufacturing large-bore diesel engines for marine and stationary applications (turnkey power plants), turbochargers, turbomachinery (steam and gas turbines), compressors and chemical reactors, and also producing vehicle transmissions, special gear units for wind turbines, slide bearings and couplings as well as testing systems for the mobility 1

1st Project Review of Volkswagen Group sector.

The Group operates 99 production plants in 18 European countries and a further nine countries in the Americas, Asia and Africa. Each working day, 501,956* employees worldwide produce some 34,500* vehicles, are involved in vehicle-related services or work in the other fields of business. The Volkswagen Group sells its vehicles in 153* countries.

It is the goal of the Group to offer attractive, safe and environmentally sound vehicles which are competitive on an increasingly tough market and which set world standards in their respective classes.

*) December 31, 2011 (excluding Ducati and Porsche)

Part II Group Stategy The Volkswagen Group strategy 2018 focuses on positioning the group as a global economic and environmental leader among automobile manufacturers. It has defined four goals that are intended to make Volkswagen the most successful and fascinating automaker in the world by 2018:

1. Volkswagen intends to deploy intelligent innovations and technologies to become a world leader in customer satisfaction and quality; 2. The goal is to increase unit sales to more than 10 million vehicles a year; in particular, Volkswagen intends to capture an above-average share of the development of the major growth markets. 3. Volkswagen intends to increase its return on sales before tax to at least 8% so as to ensure that the Group's solid financial position and ability to act are guaranteed even in difficult market periods.

1st Project Review of Volkswagen Group

4. Volkswagen aims to become the top employer across all brands, companies and regions; this is necessary in order to build a first-class team.

Volkswagen is focusing in particular on the environmentally friendly orientation and profitability of their vehicle projects so that the Volkswagen Group has the right products for success even in more challenging economic conditions. At the same time, this will mean that capital expenditure remains at manageable levels.

Their attractive and environmentally friendly range of vehicles, which they are steadily and judiciously expanding, and the excellent position enjoyed by their individual brands in the markets worldwide, are key factors allowing us to leverage the Group's strengths and to systematically increase their competitive advantages.

Their activities are primarily oriented on setting new ecological standards in the areas of vehicles, powertrains and lightweight construction. Their modular toolkit system, which they are enhancing on an ongoing basis, allows them to constantly improve production efficiency and flexibility, thus increasing the Group's profitability.

In addition, they want to expand the Volkswagen Group's customer base by acquiring new, satisfied customers around the world. In addition, they aim to increase satisfaction among their existing customers. They shall continue the measures they are currently taking to improve their productivity and quality regardless of the economic situation and without any time limit. Key elements include standardizing processes in both the direct and indirect areas of the Group and reducing throughput times in production.

Together with disciplined cost and investment management, these efforts play a major role in ensuring that they reach their long-term profitability targets and safeguard solid long-term liquidity.

Source: Annual Report 2011