Volkswagen in the U.S.: An Evolving Growth Story Deutsche Bank Global Auto Industry ConferenceMichael Lohscheller –EVP & CFO, Volkswagen Group of America, Inc. Detroit, 10 January 2012DisclaimerThis 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 Such statements are valid on the date of publication and can be superseded.AgendaVolkswagen Group sales updateVolkswagen’s profitable growth in the U.S. marketVolkswagen’s profitable growth in the US market AgendaVolkswagen Group sales updateVolkswagen’s profitable growth in the U.S. marketJanuary to October 2011 vs. 2010World Car market: 5.1% VW Group: 14.4%9.3%21.4%-1.5%8.8%26.1%30.5%6.7%5.1%11.4%22.6%2.5%19.8%North AmericaWestern EuropeCentral & Eastern EuropeSouth AmericaAsia PacificRest of WorldCar marketCars + LCVVW Group Car marketVW GroupCar market VW Group Car marketVW GroupCar marketVW GroupCar marketVW GroupWorld car markets and Volkswagen Group deliveries to customers 1,2)January to December 2011 vs. 2010Volkswagen Group –deliveries to customers by market 1,2)January to December 2011 vs. 2010´000 unitsJanuary to December 2010January to December 20117,1832,8964275499022,1442648,2163,1505576679482,5693241,0002,0003,0004,0005,0006,0007,0008,0009,000Volkswagen GroupWestern EuropeCentral &Eastern EuropeNorth America South America Asia Pacific Rest of World14.4%8.8%30.5%21.4%5.1%19.8%22.6%Volkswagen Group –deliveries to customers by brands 1,2)January to December 2011 vs. 2010´000 unitsJanuary to December 2010January to December 20117,1834,5031,0927633405436448,2165,0911,3038763507529591,0002,0003,0004,0005,0006,0007,0008,0009,000Volkswagen GroupVolkswagen Passenger CarsAudi ŠKODA SEAT BentleyCommercial VehiclesScania14.4%13.1%19.2%14.8% 3.1%36.9%21.4%35.4%AgendaVolkswagen Group sales updateVolkswagen’s profitable growth in the U.S. marketVolkswagen Group of America –OverviewLocationsBrands•Group Sales 2011: > 444,000 units in USA / + 23 % vs. YTD 20101•Group Market share YTD 2011: 3.5% in USA / + 0.4 percentage points vs. YTD 20101•Over 4,300 employees•Finance company: VW Credit, Inc .Locations in USA:•Corporate Headquarters in Herndon, Virginia•Group Quality/Technical Facilities Auburn Hills, MI •New factory in Chattanooga, Tennessee•Corporate Design Center and Electronic ResearchLaboratory (ERL) in California•Ports and post production facilities in California,Georgia, Rhode Island and Texas•Parts distribution centers in California, Florida, NewJersey, Texas and Wisconsin•Financial Service Center in Auburn Hills (Remarketing& Auction) as well as in Illinois and OregonSource: 1Autodata Motor Intelligence, Jan. 2012Expected Overall U.S. Market DevelopmentGradual economic recoveryJob growthHousing market recovery Improved consumer confidence Fleet renewal;more fuel efficient vehicles Population growth, immigrationSource: Volkswagen Group of America, Inc., PwC/AutofactsMil. Units181716151413121110014FC06970107909408029810950309939911 049612 FC 920513 FC 0091Business Objectives 2012∙Build on fundamentals that contribute to sustainable andprofitable growth∙Out-perform market with double-digit growth∙Volkswagen Group of America to continue sales momentum in2012 and aim to sell over 500,000 units –the first time in 39years.∙Market forecast between 13.5 –14 million units in 2012depending on economic conditions.∙Achieve profit at an operating level in 2012 for the secondconsecutive year for U.S.Sales Operations∙Passat and Beetle with first full-year of sales. Refreshed CC to hit the market this spring, followed later by the all-new Jetta Hybrid.Volkswagen Group in America –Writing a New ChapterTop employerVolkswagen Group profit before tax margin > 8%1Volumes > 10 million units p.a.1Leading in customer satisfaction and quality1Global Volkswagen Group TargetsClear global visionNew chapter in U.S. story Product, technologies and peopleVolkswagen in America –Then and …Flashback to the 1960s...Then to the 1990s...Key MessagesU.S. car market is recovering, but at a slower paceExecuting 2018 Growth StrategyBroad-based Momentum establishedVolkswagen brand improvements beginning to emerge acrossBusinessBrand, Quality, Customer ExperienceFinancial –move towards Break-evenU.S. Volkswagen Brand Sales Development 2010-2011Source: Autodata Motor Intelligence, Jan. 2012December YTD 2010Market Share: 2.2%December YTD 2011Market Share: 2.5%+26%256,830324,400Total Market Segmentation 2011 vs. 2010C h a n g e s i n U n i t sC h a n g e s i n %Total SegmentVolume [in 1,000](33,277)(31,523)(30,101)(8,181)(7,304)4,1834,57512,244 17,088 20,876 31,66979,42595,686149,791 153,757202,536223,228261,086(50,000)050,000100,000150,000200,000250,000300,000478.3901.198.920.5170.1300.943.5472.4222.1124.5297.9167.4811.31152.71519.02142.51449.41773.9-6.5%-3.4%-23.3%-28.5%-4.1%1.4%11.8%2.7%8.3%20.1%11.9%90.3%13.4%14.9%11.3%10.4%18.2%17.3%-40.0%-20.0%0.0%20.0%40.0%60.0%80.0%100.0%VW Growth SegmentsSource: Autodata Motor Intelligence, Jan. 2012Volkswagen U.S. Sales Development 1952 -200400800600(‘000)800 k in 2018> 324 k in 2011Source: InternalFoundations to Fix Underperformance in U.S. MarketSustainable profitabilityConsumer “First choice”800,000 unit sales20182011ProductDeliveries toCustomersChallengesVWGoalsFocus20182011201120182018201120182011Q3Consideration Initial Quality (IQS)LoyaltyThroughputper dealerUsed VW Car sales2011Q32018BrandDevelopmentQualityCustomerExperienceNetworkUsedCars/Fleet Source: Volkswagen Group of America, Inc.Product Portfolio Continues to DevelopPassat Beetle Jetta GLIGolf R Tiguan CCPassat Delivers Volkswagen Core ValuesBrand PositioningBrand Insight People love our brand. They just don´t buy our cars.Better Engineering for AllProduct Insight Giving people a ration alibi, by delivering better engineering at an affordable price.Human Insight People want permission to buy what they desire.Core TenetsElevating Every SegmentCommitted to Delivering …Better“Engineering Technology Fit and Finish Handling and Driver Experience…Priced within ReachCreating Brand Momentum Prior to the Passat LaunchKey 2011 Brand Momentum MomentsSource: Volkswagen Group of America, Inc., Polk, Urban Science•Think Blue•Brand Campaign•Global Beetle•Super Bowl•Chattanooga•OprahMetric Results’11 vs. ’10Brand Sales+26%Jetta Sales+54%Jetta Leads+79%Brand Leads+57%•JettaPassat –Priced for the MarketPassat 2.5L Passat TDIPassatV6Passat 2010Camry Accord AltimaFusionMalibu Sonata$32,950$19,995Quality & Safety AwardsBest Full-line ManufacturerSmall Multi-Function ― GolfMid-Size Car ― JettaEntry Utility ― TiguanVolkswagen ranks 2nd among Volume MakesCompact Sporty Car ― GTI & EOSCompact Car ― Golf & JettaCompact Crossover SUV ― TiguanEntry Premium Car ― CCMid-Size Premium Crossover SUV ― TouaregIIHS Top Safety Pick Award:2012 Volkswagen PassatKey Profit DriversIntroduction of products in the sweet spot of their segments Product Competitive entry prices while maintaining price premium Revenue managementPricingIncrease of localized cars to 75% for Volkswagen Brand High localization of parts and components Localization of cars and components Localized MDO (Market Delivery Options) strategy Increase revenue per carParts & Accessories Leveraging efficiencies of the group:-Marketing/IT/Facilities Cost Efficiencies Integrated customer approach Local fundingFinancial ServicesFinancial Highlights 2011Jetta SuccessPassat and Beetle LaunchRevenue per Car IncreaseIncentive ReductionMarketing EfficienciesParts BusinessIncrease of Used Car ProceedsSuccessful Local FundingImproved Dealer ProfitabilityLocal Content of Passat, Jetta, BeetlePassat Jetta / Beetle85%85%Local ContentLocal ContentSourcing in North AmericaVolkswagen incentives are 16% lower year over year and 29%Dealer Profitability & Value of the Volkswagen Brand Volkswagen brand ranks 3 in dealer confidence in the value of the franchise (next 12 months)Return on SalesVW National ’10 vs. ‘11Source: Volkswagen Group of America, Inc.; National Automobile Dealers Association, 2011in %2.4%2.2%Nov. YTD 2011Nov. YTD 2010Volkswagen in the U.S.: An Evolving Growth Story Deutsche Bank Global Auto Industry ConferenceMichael Lohscheller –EVP & CFO, Volkswagen Group of America, Inc. Detroit, 10 January 2012。