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Volkswagen Group in ChinaDr. Jörg MullExecutive Vice President, Finance, Volkswagen Group ChinaInvestor Meeting with BoAML, Beijing, 21 May 2012

Current China Automotive Market and Sales Performance

Market & Volkswagen Group Outlook

Volkswagen Group in China

Economic Indicators

Financial Results

Products

Capacity and Investment

2

History

Introduction of Volkswagen Group China

Volkswagen was the automotive pioneer in the modern Chinese market.

1985: Shanghai Volkswagen Automotive Co. (SVW) started production as a joint venture with the Shanghai Automotive Industrial Corporation (or SAIC). Ca. 7.5 million vehicles until February 2012.

1991: FAW-Volkswagen Automotive Co. Ltd. (FAW-VW) started production as the second joint venture in China. Ca. 5.5 million vehicles until February 2012.

2004: Volkswagen Group China was founded to coordinate and manage all activities of Volkswagen in China.

Today: Volkswagen is represented by 17 companies in China (including finance and sales companies).

Total Investments 1984-2011Planned Investments 2012-2016Deliveries to Customers 2011Employees 2011

€ 12.4 Billion€ 14 Billion2.259 Million vehicles48,058

Volkswagen China Investment Company

Beijing

Volkswagen Transmission

Shanghai VolkswagenPowertrain

Shanghai

FAW-Volkswagen(Volkswagen, Audi)

DalianVolkswagen FAW Engine

ChangchunVolkswagen FAW Platform

Chengdu

Nanjing Shanghai Volkswagen

Shanghai Volkswagen(Volkswagen, ŠKODA)

Volkswagen AutomaticTransmission

Volkswagen Production Facilities in China

car production plantscomponent plantsHeadquarter Volkswagen Group China

FAW-Volkswagen

3

FoundationShare

Deliveries 2011

1990FAW 60%, VW AG 30%, AUDI AG 10%

993,000

Successful partnership with FAW and SAIC

Octavia RSFabia Scout SuperbOctaviaFabia

Polo HB CrossPoloPolo NB

Passat LingyuTouran TiguanLavida

Santana Santana Vista

Passat

1984SAIC Motor 50%, VW AG 50%

1,141,000

CC

SagitarJetta Bora

Golf Golf GTI Magotan

A6LA4L Q5

4

Volkswagen

Lamborghini, Bentley

Audi

Locally Produced(‘000 Units)

Import FBU*(‘000 Units)

79.6

279.2 100.0

349.5

FAW-VW

SVW

25.3

24.2

1.1

Total Deliveries Region China 858.9

Deliveries of Volkswagen in China January to April 2012

* incl. Hongkong;

Source: Volkswagen Group China

∑ 50.6 ∑ 808.3

5




Economic Indicators

Financial Results

Products


6

Comeback of a world power

Fall of RomanEmpire

Mohammad‘sHegira

Marco Polo‘strips to Asia

Discovery ofAmerica

French and US Revolution

Oilcrisis

IndustrialRevolution

InternetRevolution

Rest ofthe worldJapanEurope &N. America

India

China

100

80

60

40

20

00 500 1000 1500 2009

Share world BIP(Year 1 – 2009; in %)

Year

Source: McKinsey

"For Chinese leadership, it is not surprising that China is on the verge of becoming a superpower, but rather that they have not been for the last 300 years" Henry Kissinger, former US Secretary of State

7

2011 GDP reached a 9.2% growth year on year, and the economy is now in a path of stable growth

CAGR 9.2%

Source: Deutsche Bank, last Update May 2012

CAGR 10.3%

Q4/09

10.7%

Q3/09

8.9%7.9%

6.1%

Q2/09Q1/09 Q4/10Q3/10Q2/10Q1/10

11.9%

9.6%10.3% 9.8%

2009 2010 2011

Q1/11

9.7% 9.5%

Q2/11

9.1%

Q3/11

8.9%

Q4/11

CAGR 9.2%

2012(forecast)

Q2/12E Q3/12E Q4/12EQ1/12

8.1%8.1% 8.7% 8.8%

CAGR 8.5%

8

Current 5-year-plan: New growth model with focus on domestic market

Up to now:Focus on export andquantitative growth

Now:Focus on domestic market and

qualitative growth

11th 5-year-plan2006 – 2010

12th 5-year-plan2011 – 2015

• Multi-National-Companies and infrastructure projects as growth generator

• Big growth in manufacturing trade• Jobs in cities to keep unemployment low

• Internationally comparable price stability and well-adjusted foreign trade balance

• Domestic consumption as growth accelerator• Megacities as growth generator • Focus on environmental protection and

energy efficiency• Encouragement of own innovations• Social stability due to balanced allocation of

prosperity • Selective policies for foreign investment as

well as globalization of Chinese companies

9

Mega and midsized cities will be the engine of GDP growth

Source: McKinsey Insights China 10

3

Big town(<0.5M) 544

Small(0.5-1.5M) 202

Mid-sized(1.5-5.0M) 58

Big(5-10M) 12

Mega(10M+)

2005819 cities

424

335

85

11

2020865 cities

% of GDP

2005 2020

13 27

22

27

15

12

26

10

New cities

37

56

5233

169166

37846

Distribution by city size

Remarks: 6 mega cities in 2010 (Shanghai, Beijing, Chongqing, Shenzhen, Tianjin, Guangzhou)

City Level (Urban Population)

10

23 26

GDP Growth development is expected to differentiate more strongly between the various Chinese regions

Zhejiang

Heilongjiang

Jilin

Liaoning

Hebei Tianjin

Shandong

Henan

Anhui

Jiangsu

Jiangxi

Fujian

Guangdong

Hunan

Hubei

Hainan

Beijing

Shanghai

Inner Mongolia

Shanxi

Guangxi Yunnan

Guizhou

Sichuan

Shaanxi

Ningxia

Gansu Qinghai

Tibet

Xinjiang

Chongqing

Expected GDP Growth 201212-15%

10-12%

8-10%

Estimate of Chinese GDP 2012 per Province

Province ExpectedGrowth 2012

Total GDP 2011 (trillion RMB)

Inner Mongolia 15.0% 1.40Guizhou 14.0% 0.56

Chongqing 13.5% 1.00Shaanxi 13.0% 1.20Hainan 13.0% 0.25Anhui 12.6% 1.50

Sichuan 12.0% 2.00Heilongjiang 12.0% 1.10

Tianjin 12.0% 1.10Shanxi 12.0% 1.10

Jilin 12.0% 1.04Gansu 12.0% 0.52Ningxia 12.0% 0.21Qinghai 12.0% 0.16Yunnan 12.0% 0.88Liaoning 11.0% 2.20Hunan 11.0% 1.96Fujian 11.0% 1.75Guanxi 11.0% 1.20Xinjiang 11.0% 0.66

Tibet 11.0% 0.06Henan 10.0% 2.70Hubei 10.0% 1.80Jiangxi 10.0% 1.20

Shangdong 9.5% 4.54Hebei 9.0% 2.40

Guangdong 8.5% 5.30Zhejiang 8.5% 3.18Jiangsu 8%-10% 4.80

Shanghai 8.0% 1.92Beijing 8.0% 1.60

Data Source: Provincial Government Report 11




Economic Indicators

Financial Results

Products


12

After a strong boom in the past two years, passenger car market growth in China is stabilizing

2003

* Estimate; Data Source: CKD – CPCA; FBU - Registration

2011201020092008

2,266

5,503

8,482

11,457

+35%

Total Passenger Car Market – China (incl. HK)‘000 Units

+54%

CAGR +19%

12,386

+9%

2012E

5-10%*

13

2,259 thousand vehicles delivered to customers in 2011

2,259

1,723

313220

0

400

800

1,200

1,600

2,000

2,400

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

ŠKODAAudi

Volkswagen

Volkswagen Group

Deliveries to customers

New record 2011:2.0 million vehicles

Volume doubled in the last 3 years

14

`000 units

The Volkswagen Group is aiming for a new record in the Chinese market as a strategic target for the near future

20112007 2008 2009 2010

1,024910

1,400

1,923

‘000 Units


2,259

2012E

15

In Jan-Apr 2012, the Volkswagen Group maintained its Number 1 position by market share in China Mainland

Market Share China Mainland(2012 Jan-Apr)

VolkswagenGroup

16

214,000

216,000

227,000

576,900

234,000

235,000

258,000

652,000

Volkswagen brand maintained the 1st place in the Chinese Passenger Car market

Data Source: Manufacturers exchange data; Volkswagen Group China

Constant Growth of Volkswagen BrandMarket Leader in China Passenger Car Market

628780 843

1,116

1,5101,723

2007 2008 201020092006

Deliveries to customers

2011 Jan-Apr2012 Jan-Apr

+13%

+9%

+8%

+13%

2011 2012E

In Units In ‘000 Units

17

69,000

43,000

110,000

74,500

71,000

63,000

101,000

79,600

ŠKODA Brand growing further in 2012

Data Source: Manufacturers exchange data; Volkswagen Group China

2007 2008 201020092011 Jan-Apr

+7%

+3%

+49%

ŠKODA Brand Competitiveness ŠKODA Brand is Growing Fast

2012E2012 Jan-Apr

-9%

2011

Deliveries to customersIn Units In ‘000 Units

18

Significant growth of dealer networks planned

~3,000

1,590

1,120

230240

>1,900

>500

>500

2011 Mid-term

19




Economic Indicators

Financial Results

Products


20

Volkswagen will continue to launch new products in China, in order to satisfy customer demands (local production)

Audi A6 L

2011+8

+5

+8

Sagitar

Passat Polo NB Fabia

201420132012+8

+7

Magotan

21

Lavida

22

Volkswagen Passat – Special design elements for Chinese customers

Passat USA Passat China

Radiator grill

Speaker cover

Tire programm Tail Lamps

23

Corporate module concept with localized components

Charging Unit

Air condition

Power Electronics

E-Motor & Transmission

Battery system

Corporate Module Shelf

High-voltagepower cables

Heating

Air Conditioning

Infotainment

Battery & BatteryMgmt.

Remote Access / Online Services

Power Electronics

E-Power brakeunit

E-Motor & Transmission

Local Components

Example Localized Componentin Corporate Module Shelf

Corporate Module Concept with Localization in China

24

Volkswagen’s development: Fuel consumption reduction to e-mobility

2010

RecuperationStart-stop

Rolling resistance

Emissions for fleet

Future Technologies

Optimised transmission

New engine generation

(for new models)

New TSI generation

Models with innovative technology

E-Traction

[CO2/km] [Volume]

>100 vehicles

Field test

Various models

>10,000 vehicles

Series

2 models

E-optimized series

Range100-200 km

Range options

2010-2013 2014-2018 After 2018

>100,000 vehicles

Phase 1: Test

3-phase introduction of e-mobility in China

Phase 2: Start of series production Phase 3: Mass market

25




Economic Indicators

Financial Results

Products


26

Chengdu

Beijing

The investment strategy of Volkswagen Group China is self-funded through the Joint Ventures


North

East

“Go South Strategy”

“Go West Strategy”

FAW-VW

SVW

FAW-VW

FAW-VW

Changchun

Shanghai

Foshan

Yizheng

Ningbo

Existing vehicle plant

New vehicle plant / expanding capacity

Nanjing

Headquarters

Urumqi

SVW

2012 - 2016 € 14.0bn

Total Investments

27

Volkswagen Group China capacity increase(‘000 Units)


More working days (wd)

Further capacity optimization

2011 2014

Upwardflexibility

~47%

250 wd

250 wd

3 additional plants+

significant increasein one existing plant

1,500

700

3,000

28




Economic Indicators

Financial Results

Products


29

Volkswagen Group China – Achievements

Deliveries to Customers

Production (100%)1)

Operating profit (quotal)1)

(’000 Units)

(’000 Units)

(€ m)

Source: Volkswagen Group China1) SVW Group/FAW-VW Group

1,024

975

395

2008

1,400

1,387

831

2009 2010

1,923

1,914

1,907

2011

2,259

2,202

2,616

2012 Q1

634

611

848

30




Economic Indicators

Financial Results

Products


31

Total Passenger Car Market in China will develop further in the future

Source: Volkswagen Group China / IHS Global Insight

2020E2011

12,386

>15,000

>20,000

>7%

‘000 Units

2013E2012E

Average AnnualGrowth Rate

Total Passenger Car Market Forecast – China (incl. HK)

5-10%

>8%

32

33

The Chinese market has still an enormous growth potential

Source: VDA, Jahrbücher „Tatsachen und Zahlen“

Vehicle penetration of passenger cars and LCVs, 2011(units per 1,000 inhabitants)

58

366

553577

776

ChinaSouth Korea

GermanyJapanUSA

23 in 2006

Appendix

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% 8.5%

Consumption (public +private) [Growth rate] 21.6% 15.5% 18.4% 17.1% 16.8%

Inflation [CPI] 5.9% -0.7% 3.3% 5.4% 3.1%

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 Index -- 1,820 3,277 2,808 2,823 --

Export [Growth rate] 17.2% -16.0% 31.3% 20.3% 9.7%

Import [Growth rate] 18.5% -11.2% 38.7% 24.9% 10.0%

Foreign Direct Investment [Bn. USD] 92.4 90.0 105.7 100.0 70

Exchange rate as of the end of the report period [RMB/USD] 6.83 6.83 6.78 6.46 6.30

Exchange rate as of the end of the report period [RMB/Euro] 9.66 9.80 8.97 9.01 8.19

Data Source: Deutsche Bank 35

Industry stock levels increased to 2.3 month by the end of April 2012

Data Source: CPCA, Volkswagen Group China

(<1.2)

Current stock level (in months) of major OEMs

Volkswagen Group

Comp.10

Comp.11

Comp.15

Comp.5

Comp.9

SVWVW

Comp.6

Comp.8

AudiComp.3

Comp. 2

Comp. 1

Comp.4

FAW-VWVW

Comp.14

Comp.13

ŠKODAComp.7

(>1.5) (1.3~1.5)4.3 4.3

3.6

2.62.8

1.9 1.8 1.81.6

1.81.51.6 1.4

1.1

1.7 1.6

Industry Average

2.9

Volkswagen Group

1.51.5

Comp.12

2.3

36

Disclaimer

This presentation contains forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast.

Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese Renminbi and Czech koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.

We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superceded.

This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.

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