Based on the Company’s success in 2008, the Board of Management of Volkswagen AG believes that the Group’s economic position is positive in spite of the substantial impact of the financial crisis. Optimized processes and cost structures have enabled us to safeguard our earnings power and reinforce the Group’s competitiveness in the long term. Volkswagen thus achieved its objective of increasing sales revenue and operating profit year-on-year.
The acquisition of further shares in Scania in 2008 reduced net cash flow in the Automotive Division. Adjusted for the effects of the Scania transaction, the Automotive Division was able to generate a slightly positive net cash flow. We were unable to secure a further improvement in the Automotive Division’s liquidity position even after adjustment for the Scania effects. This was due among other things to the capital increase implemented at Volkswagen Financial Services AG to strengthen equity and the build-up of inventories in the second half of 2008 as a result of the difficult market situation. An overview of the development of the Volkswagen Group over the past five years can be found in the tables in chapter and chapter . More information on the economic position of the Volkswagen Group by brand and business field can be found in the chapter.