The natural disasters that struck Japan in March 2011 also had an impact on the automotive industry. The damage to infrastructure and the large-scale or complete destruction of production facilities affected production systems and supply chains worldwide. The Volkswagen Group responded to the events immediately: an international task force was set up, comprising employees from all the Company’s divisions and brands. On a daily basis, it coordinated measures that maintained the Group’s global deliveries and thus ensured its production supplies, enabling negative effects on our manufacturing operations to be avoided almost entirely.

In 2011, we expanded production at our international locations significantly. In order to ensure the necessary capacity, our suppliers also increased their deliveries above and beyond what was originally agreed. We expect demand to remain high in 2012 and possibly cause fluctuations in installation rates of equipment features and components in particular. We have various tools with which to limit the risk that we will be unable to meet spikes in demand and to optimally adapt the programs at our vehicle and component plants to current market conditions. These include the turntable concept as well as extensive flexibility in logistics and within the existing working time models.

Special risks may arise during large projects. These result in particular from contracting deficiencies, miscosting, post-contracting changes in economic and technical conditions, and poor performance on the part of subcontractors. Appropriate project control throughout all project phases helps to counter this risk.

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