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Volkswagen Group in China Dr. Jörg Mull Executive Vice President, Finance Volkswagen Group China Volkswagen Group in China

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Volkswagen Group in China Dr. Jörg Mull Executive Vice President, Finance Volkswagen Group China Volkswagen Group in China Volkswagen Group in China Dr. Jörg Mull Executive Vice President, Finance Volkswagen Group China Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 2 Introduction of Volkswagen Group China Volkswagen Production Facilities in China History car production plants component plants planned plants Volkswagen was the automotive pioneer in Headquarter Volkswagen Group China FAW-Volkswagen (Volkswagen, Audi) the modern Chinese market. Changchun Volkswagen FAW Platform 1985: Shanghai Volkswagen Automotive Beijing Dalian Volkswagen FAW Engine Co. (SVW) started production as a joint Volkswagen China venture with the Shanghai Automotive Investment Company Volkswagen Automatic Transmission Industrial Corporation (or SAIC). Ca. 7.5 Yizheng million vehicles until February 2012. Nanjing Shanghai Volkswagen Shanghai 1991: FAW-Volkswagen Automotive Co. Chengdu Ningbo Shanghai Volkswagen (Volkswagen, ŠKODA) Ltd. (FAW-VW) started production as the second joint venture in China. Ca. 5.5 FAW-Volkswagen Volkswagen Transmission million vehicles until February 2012. Foshan Shanghai Volkswagen Powertrain 2004: Volkswagen Group China was founded to coordinate and manage all activities of Volkswagen in China. Total Investments 1984-2011 € 12.4 Billion Planned Investments 2012-2016 € 14 Billion Today: Volkswagen is represented by Deliveries to Customers 2011 2.259 Million vehicles 17 companies in China (including finance Employees 2011 48,058 and sales companies). 3 Successful partnership with FAW and SAIC 1990 Foundation 1984 FAW 60%, VW AG 30%, AUDI AG 10% Share SAIC Motor 50%, VW AG 50% 993,000 Deliveries 2011 1,141,000 Jetta Bora Sagitar Santana Santana Vista Polo HB Polo NB CrossPolo Golf Golf GTI Magotan CC Lavida Touran Tiguan Passat Lingyu Passat A4L Q5 A6L Fabia Fabia Scout Octavia Octavia RS Superb 4 Deliveries of Volkswagen in China 2011 (‘000 Units) Import FBU* Locally Produced Volkswagen 61.7 FAW-VW 741.1 252.0 Audi 61.0 Lamborghini, Bentley 2.2 SVW 920.6 220.1 ∑ 124.9 ∑ 2.134 Total Deliveries Region China 2.259 million * incl. Hongkong; Source: Volkswagen Group China 5 Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 6 The economy of China is on a track towards normalization Economic Indicators Unit 2008 2009 2010 2011 2012 E GDP [Growth rate] 9.6% 9.2% 10.3% 9.2% 8.3% Consumption (public + [Growth rate] 21.6% 15.5% 18.4% 17.1% 16.9% private) Inflation [CPI] 5.9% -0.7% 3.3% 5.4% 3.0% Investment [Growth rate] 26.1% 30.1% 23.8% 23.8% 17.0% Key Interest rate -- 1.80% 1.80% 2.25% 2.25% -- Shanghai Composite -- 1,820 3,277 2,808 2,823 -- Index Export [Growth rate] 17.2% -16.0% 31.3% 20.3% 8.0% Import [Growth rate] 18.5% -11.2% 38.7% 24.9% 9.0% Foreign Direct [Bn. USD] 92.4 90.0 105.7 100.0 70 Investment Exchange rate as of the [RMB/USD] 6.83 6.83 6.78 6.46 6.30 end of the report period Exchange rate as of the [RMB/Euro] 9.66 9.80 8.97 9.01 8.19 end of the report period 7 Data Source: Deutsche Bank / ING 2011 GDP reached a 9.2% growth year on year, and the economy is now in a path of stable growth 2009 2010 2011 2012 (forecast) CAGR CAGR CAGR CAGR 9.2% 10.3% 9.2% 8.3% 11.9% 10.7% 10.3% 9.8% 9.6% 9.7% 9.5% 9.1% 8.9% 8.9% 8.4% 7.8% 8.5% 6.1% 7.9% 8.6% Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12E Q2/12E Q3/12E Q4/12E 8 Data Source: The National Bureau of Statistics China GDP Growth development is expected to differentiate more strongly between the various Chinese regions Estimate of Chinese GDP 2012 per Province Expected Total GDP Province Growth 2012 2011 (trillion RMB) Inner Mongolia 15.0% 1.40 Guizhou 14.0% 0.56 Heilongjiang Chongqing 13.5% 1.00 Shaanxi 13.0% 1.20 Hainan 13.0% 0.25 Anhui 12.6% 1.50 Jilin Sichuan 12.0% 2.00 Inner Mongolia Heilongjiang 12.0% 1.10 Liaoning Tianjin 12.0% 1.10 Xinjiang Shanxi 12.0% 1.10 Beijing Jilin 12.0% 1.04 Tianjin Gansu 12.0% 0.52 Hebei Ningxia 12.0% 0.21 Ningxia Shanxi Shandong Qinghai 12.0% 0.16 Yunnan 12.0% 0.88 Liaoning 11.0% 2.20 Qinghai Gansu Henan Jiangsu Hunan 11.0% 1.96 Shaanxi Fujian 11.0% 1.75 Shanghai Guanxi 11.0% 1.20 Tibet Anhui Sichuan Hubei Xinjiang 11.0% 0.66 Zhejiang Tibet 11.0% 0.06 Chongqing Henan 10.0% 2.70 Jiangxi Hubei 10.0% 1.80 Hunan Jiangxi 10.0% 1.20 Guizhou Fujian Shangdong 9.5% 4.54 Expected GDP Growth 2012 Hebei 9.0% 2.40 Guangdong 8.5% 5.30 12-15% Yunnan Guangxi Guangdong Zhejiang 8.5% 3.18 10-12% Jiangsu 8%-10% 4.80 Shanghai 8.0% 1.92 8-10% Beijing 8.0% 1.60 Hainan 9 Data Source: Provincial Government Report Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 10 After a strong boom in the past two years, passenger car market growth in China is stabilizing Total Passenger Car Market – China (incl. HK) 8-10%* +9% ‘000 Units +35% 12,386 +54% 11,457 8,482 CAGR +19% 5,503 2,266 2003 2008 2009 2010 2011 2012E 11 * Estimate; Data Source: CKD – CPCA; FBU - Registration Volkswagen Group is aiming for a new record in the Chinese market as a strategic target for the near future ‘000 Units 2,259 1,923 1,400 1,024 910 2007 2008 2009 2010 2011 2012E 12 Source: Volkswagen Group China In Jan-Feb 2012, Volkswagen Group maintained its Number 1 position by market share in China Mainland YTD MS% YTD MS% Ranking Group Jan-Feb 12 Jan-Feb 11 Volkswagen Group 1 VW Group 19.2% 17.7% 2 GM Group 10.9% 11.0% Average Market Share in % China Mainland (2012 Jan-Feb) 3 Hyundai Group 8.6% 8.3% 4 Nissan Group 6.2% 5.0% 5 Toyota Group 5.3% 5.4% 6 Honda Group 4.2% 5.0% 7 Geely Group 3.7% 3.8% 8 BYD 3.5% 3.7% 9 Chery Group 3.4% 3.3% 10 PSA Group 3.1% 3.1% Others 31.9% 33.7% 13 VW brand maintained the 1st place in the Chinese Passenger Car market Market Leader in China Constant Growth of VW Brand Passenger Car Market In Units Deliveries to customers In ‘000 Units +10% +2% +13% +3% 2012 Jan-Feb 2011 Jan-Feb 2006 2007 20082009 2010 2011 2012E Data Source: Manufacturers exchange data; Volkswagen Group China 14 Audi brand further improved its 1st position in the Chinese Premium Passenger Car market Market Leader in China Premium Rapid Growth of Audi Brand Passenger Car Market In Units Deliveries to customers In ‘000 Units +43% +35% +22% +28% 2012 Jan-Feb 2011 Jan-Feb 2006 2007 20082009 2010 2011 2012E Data Source: Manufacturers exchange data; Volkswagen Group China 15 ŠKODA Brand growing further in 2012 Skoda Brand Competitiveness Skoda Brand is Growing Fast In Units Deliveries to customers In ‘000 Units +8% -20% +51% +16% 2012 Jan-Feb 2011 Jan-Feb 2007 20082009 2010 2011 2012E Data Source: Manufacturers exchange data; Volkswagen Group China 16 Significant growth of dealer networks planned ~3,000 >500 >500 1,590 240 230 >1,900 1,120 2011 Mid-term 17 Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 18 Volkswagen will continue to launch new products in China, in order to satisfy customer demands (local production) Passat Polo NB Fabia Magotan Sagitar +5 +8 2011 2012 2013 2014 +8 +8+7 Audi A6 L 19 3-phase introduction of e-mobility in China Phase 1: Test Phase 2: Start of series production Phase 3: Mass market 2010-2013 2014-2018 After 2018 Field test Series E-optimized series Range Range options 100-200 km >100 vehicles >10,000 vehicles >100,000 vehicles Various models 2 models 20 Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 21 The investment strategy of Volkswagen Group China is self-funded through the Joint Ventures Total Investments FAW-VW 2010 - 2012 € 6.0bn Changchun 2012 - 2016 € 14.0bn North Beijing SVW East “Go West Strategy” FAW-VW YizhengNanjing Nanjing Shanghai Chengdu Ningbo FAW-VW Foshan Existing vehicle plant New vehicle plant / expanding capacity “Go South Strategy” 22 Source: Volkswagen Group China Volkswagen Group China capacity increase (‘000 Units) 3 additional plants + significant increase 3,000 in one existing plant Upward flexibility 250 wd ~47% More working days (wd) 700 Further capacity optimization 250 wd 1,500 2011 2014 23 Source: Volkswagen Group China Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 24 Volkswagen Group China – Achievements 2008 2009 2010 2011 Deliveries to Customers (’000 Units) 1,024 1,400 1,923 2,259 1 Production (100%) (’000 Units) 975 1,387 1,914 2,202 1 Operating profit (quotal) (€ m) 395 831 1,907 2,616 1: SVW Group / FAW-VW Group 25 Source: Volkswagen Group China Volkswagen Group in China Economic Indicators Current China Automotive Market and Sales Performance Products Capacity and Investment Financial Results Market & Volkswagen Group Outlook 26 Total Passenger Car Market in China will develop further in the future Total Passenger Car Market Forecast – China (incl.
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