The global economy continued to grow in the reporting period, although the pace of growth slowed substantially in the second half of the year. We expect global economic growth to remain at this level in 2012, although the various individual regions will perform differently. The rapid momentum seen in the emerging markets of Asia and Latin America will ease only slightly, while the major industrialized nations will continue to see only moderate growth. A recession is expected in some eurozone countries. Increasing inflationary trends may cloud the prospects for growth in the emerging markets.

The global sales markets for passenger cars and light commercial vehicles are expected to see a further increase in 2012. We are forecasting an overall decline in the market volume in Western Europe, with the German market staying at the same level as in the previous year. Growth in Central and Eastern Europe will slow tangibly. Growth in our strategically important markets in China and India is expected to remain above average, while demand in North and South America also looks set to rise further.

The markets for trucks and buses are expected to continue their growth in 2012, although they will lose momentum.

We also expect the markets for automotive financial services to gain in significance in 2012.

The Volkswagen Group’s main competitive advantages are its multibrand strategy, a range of vehicles that covers almost all segments from subcompact cars to heavy trucks and its growing presence in all major regions of the world, together with its wide range of financial services. Thanks to our expertise in technology and design, we have a diverse, attractive and environmentally friendly portfolio of products that meets all customer desires and needs. In 2012, the Volkswagen Group’s brands will again launch a large number of fascinating new models and so help further expand our strong position in the global markets. As a result, we expect to increase deliveries to customers year-on-year. 2012 will be dominated by the start of production for new, high-volume models as part of the renewal of our product range and the need to convert our plant and equipment for use with the Modular Transverse Toolkit. The modular toolkit system, which is being continuously updated, will have an increasingly positive effect on the Group’s cost structure in the future.

The Volkswagen Group’s 2012 sales revenue will exceed the prior-year figure. This will also be a result of the consolidation of MAN SE as of November 9, 2011; the earnings contribution will be limited because of the write-downs that will be required for purchase price allocation.

Our goal for operating profit is to match the 2011 level. Positive effects from our attractive model range and strong market position will be offset in part by increasingly stiff competition in a challenging market environment, especially in certain European countries. Disciplined cost and investment management and the continuous optimization of our processes remain core components of our Strategy 2018.

Wolfsburg, February 14, 2012
The Board of Management

This report contains forward-looking statements on the business development of the Volkswagen Group. These statements are based on assumptions relating to the development of the economic and legal environment in individual countries and economic regions, and in particular for 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 entail 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 Western Europe (and especially Germany) or in the USA, Brazil, China, or Russia 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 in particular to sterling, the US dollar, Chinese renminbi, the Swiss franc, Japanese yen, Swedish krona, Russian ruble and Australian dollar. In addition, expected business development may vary if this report’s assessments of value-enhancing factors and risks develop in a way other than we are currently expecting.

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