Volkswagen Group in China

Prof. Dr. Jochem HeizmannJ.P. Morgan Global China Summit 201410th June, 2014

Volkswagen Group with > 30 years of success in Chin a

1983

30 yearsVolkswagen Group in China

Commercial

Vehicles

2013

� 1 Brand

� 1 Model (Santana)

� 600 vehicles

� 12 Brands

� > 80 PV Models

� 3.27 million vehicles

2

3

Joint Ventures Shanghai Volkswagen and FAW -Volkswagen asstrong pillars

* VW AG 40 % / VCIC 10% ** VW AG 30 % / Audi AG 10%

JV Establishment

Share

Deliveries 2013 ~ 1.5 million vehicles

1984 1991

~ 1.5 million vehicles

SAIC Motor 50%

VW Group 50%*

VW Group 40%**

FAW60%

4

Locally produced product portfolio as basis for suc cess

Vol

ksw

agen

Lavida Santana Passat

Polo Touran Tiguan

Ško

daFabia Rapid Octavia Superb Yeti

Vol

ksw

agen

Jetta Sagitar Magotan

New Bora CC Golf

Aud

i

Audi A4L Audi A6L Audi Q3 Audi Q5

Gran Lavida

Audi A3 SB Rapid SBAudi A3 Limo

5

Volkswagen Group with 28 plants in China

Total Investments 1985-2013:€ 18.5 billion

Planned Investments 2014-2018:€ 18.2 billion

11 Car production plants

17 Component plants

Headquarter Volkswagen Group China

Volkswagen Transmission

Shanghai VolkswagenPowertrain

FAW-Volkswagen(Volkswagen, Audi)

Volkswagen FAW Engine

Volkswagen FAW Platform

Shanghai Volkswagen

Shanghai Volkswagen(Volkswagen, ŠKODA)

Volkswagen AutomaticTransmission Dalian

Volkswagen China Investment Company

Beijing

Shanghai

Dalian

Chengdu Nanjing

FAW-Volkswagen

Yizheng

Volkswagen FAW Platform

Urumqi

Shanghai Volkswagen

Foshan

FAW-Volkswagen

TianjinVolkswagen AutomaticTransmission Tianjin

Shanghai Volkswagen

Ningbo

Changchun

Volkswagen FAW Engine

Volkswagen FAW Platform

ChangzhouMAN Diesel & Turbo

Locations

6

Volkswagen Group China with 3.27 million deliveries to customers in 2013 – Plus 16.2%

* Porsche incl. since August 2012

2,813*

2,150

406236

13*

3,271*

2,506

492227

37

+16.2%(‘000 units)

+16.6%

+21.2%-3.7%

*

2013

2012

7

Volkswagen Group China with 1.19 million deliveries to customers in Jan-Apr 2014 – Plus 17.0%

Jan-Apr 2014

Jan-Apr 2013

Overall marketgrowth

+12.4%1,018

784

14278

12

1,190

921

17084

13

(‘000 units)

+17.5%

+19.9%+7.5%

+17.0%

+12.4%

8

Passenger Vehicles Market in China with promising o utlook

Source: Internal calculations based on IHS

Forecast

13

18

23

28

33

38

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Million vehicles

2013 Actual:15.9 mn. veh.

10% Growth

5% Growth

32 mn. veh.

25 mn. veh.

rowth in 2014: 10% Growth in 2014: ≙ ~ ≙ ~ ≙ ~ ≙ ~ 17.5 mn. veh.

9

Following China ´s Growth: Need for Volkswagen Group to build upat least 2 factories every 3 years

Additionalsales volume[veh.]

Scenario: 5% Growth p.a.

Total market2011 2012 2013 2014 2015 2016

2016: > 20 mn. veh. p.a

Million vehicles

200,000

Market ShareVW Group

~ 20%

Market ShareVW Group

~ 20%Need of

2 new Factoriesevery 3 Years

1 2

Volkswagen Group

1 mn.

Source: Internal calculations based on IHS

10

Proportionate operating profit of Volkswagen Group Chin a in 2013 with +16.8% vs. 2012

2013

€ 8.42 billion

€ 3.68 billion

€ 9.57 billion

€ 4.30 billion

2012

+17%+ 16.8%

Operatingprofit 100%

Operatingprofit,

proportionate

11

Proportionate operating profit of Volkswagen Group Chin a in Q1/2014 with +7.4% vs. Q1/2013

Q1/2014

€ 2.53 billion

€ 1.16 billion

€ 2.84 billion

€ 1.24 billion

Q1/2013

+17%+ 7.4%

Operatingprofit 100% Operating

profit,proportionate

12

By 2018, Volkswagen Group China with > 100,000 employ ees

201820172016201520142013

> 20,000

> 80,000~ 90,000

> 100,000

Employees in the dealer organisationDealers

13

By 2018, Volkswagen Group China with > 3,600 dealers a nd> 500,000 employees in the dealer network

2018 (E)

> 3,600

2014 (E)

~ 2,750

2013

~ 2,400

2018 (E)

~ 360,000

2013 2014 (E)

> 500,000

> 300,000

14

Volkswagen Group China: People in the centre

Increasing efficiency, quality and perfection throu ghout the company

People. Our Customers“Driven by Innovation”

People. Our Society“Driven by Values”

People. Our Employees“Driven by Ideas”