Consumer demand is shaped not only by real factors such as disposable income, but also by psychological factors that are impossible to plan for.

Increased fuel and energy prices could lead to unexpected buyer reluctance, which could be further exacerbated by media reports. This is particularly the case in saturated automotive markets such as Western Europe, where demand could drop as a result of owners then holding on to their vehicles for longer.

In 2011, the effects of these psychological factors that cannot be planned for were again exacerbated by the impact of the financial and economic crisis on the global economic trend and the entire automotive industry. Some automotive markets were in a downward spiral, which in some cases assumed dramatic proportions, while others were supported through government intervention. We were able to effectively counter the risk of buyer reluctance with our attractive range of models and in-depth customer orientation.

In addition to buyer reluctance as a result of the crisis, a combination of vehicle taxes based on CO2 emissions – like those already structured in some European countries – and high oil and energy prices is causing a shift in demand towards smaller segments and engines in individual markets. We are working to counter the risk that such a shift will negatively impact the Volkswagen Group’s financial result by constantly developing new, fuel-efficient vehicles and alternative fuels on the basis of our fuel and drive train strategy. In the rapidly expanding markets of Asia and Eastern Europe, risks may also arise due to government intervention in the form of restrictive lending or tax increases, for example, which could reduce private consumption.

Dependence on fleet customer business

In fiscal year 2011, the percentage of total registrations in Germany accounted for by business fleet customers increased to 12.4% (11.5%). The healthy economic trend also had a positive effect on demand for company vehicles. The Volkswagen Group’s share of the market for business fleet customers rose by one percentage point to 46.8% (45.8%). Its extensive product range and target group-oriented customer care enabled the Volkswagen Group to further extend its market lead in this customer segment in Europe: registrations by business fleet customers rose by 13.2%, while the Group’s market share increased to 28.7% (26.8%). The fleet customer business continues to be marked by increasing concentration as well as by inter-nationalization. Thanks to its broad product portfolio, the Group is well positioned in view of the growing importance of the issue of CO2 and the trend towards downsizing. No default risk concentrations exist for individual corporate customers.

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