Business Development

SALES TO THE DEALER ORGANIZATION

Volkswagen AG sold 2,388,014 vehicles to the dealer organization in the reporting period. This was 0.9% more than in the previous year. The percentage of vehicles sold outside Germany increased to 69.7% (69.5%).

Production

Volkswagen AG’s vehicle production plants (Emden, Hanover and Wolfsburg), including Auto5000 GmbH, which manufactures vehicles at the Wolfsburg plant, increased their output by 5.7% to a total of 1,137,145 vehicles. This was primarily due to the increased number of Tiguan and Passat CC models produced. Average daily production at Volkswagen AG increased by 4.1% to 4,656 units.

NUMBER OF EMPLOYEES

At December 31, 2008, a total of 90,363 people were employed at the sites of Volkswagen AG, excluding staff employed at subsidiaries. This figure included 4,459 vocational trainees. 4,872 employees were in the passive phase of their early retirement. The workforce was 0.1% smaller than during the previous year.

The percentage of female employees was 13.8% (13.2%) of the total headcount. The Company employed 2,487 part-time workers (2.8%). The percentage of foreign employees was 6.1% (6.3%). A total of 68.0% (66.5%) of employees held a vocational qualification in an area relevant to Volkswagen, while 11.6% (11.2%) were graduates. The average age of Volkswagen employees in the reporting period was 42.1 years.

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EMPLOYEE PAY AND BENEFITS AT VOLKSWAGEN AG

 

 

€ million

 

2008

 

%

 

2007

 

%

*

Provisions for pensions and similar obligations are recognized at their actuarial present value calculated using the German entry age normal method and reflecting current mortality tables. A discount rate of 5.5% was applied for the first time in 2007 (6% until 2006).

Direct pay including cash benefits

 

4,133

 

64.7

 

3,957

 

57.4

Social security contributions

 

861

 

13.5

 

919

 

13.3

Compensated absence

 

750

 

11.8

 

728

 

10.6

Old-age pensions

 

639

 

10.0

 

1,288*

 

18.7

Total expense

 

6,383

 

100.0

 

6,892

 

100.0

RESEARCH AND DEVELOPMENT

Volkswagen AG’s research and development costs according to the German Commercial Code rose by 31.1 % year-on-year to €3.0 billion. On December 31, 2008, 8,954 people were employed in this area.

Purchasing volume

The purchasing volume across the six Volkswagen AG sites in Germany amounted to €20.4 billion (€19.6 billion) in the reporting period, of which 72.4% (75.0%) was sourced from German suppliers. Of the total purchasing volume, €17.2 billion was spent on production materials and €3.2 billion on capital goods and services.

EXPENDITURE ON ENVIRONMENTAL PROTECTION

Investments for environmental protection are broken down into cumulative and integrated environmental protection measures. They are defined as investments made with the sole or primary objective of protecting the environment. Only production-related investments are now reported; disclosures of product-related investments were discontinued in 2008.

Operating costs relating to environmental protection comprise expenditures for the operation of environmental protection equipment and expenditure on measures not relating to such equipment. Expenditure on water pollution control and waste management made up the bulk of the operating costs in 2008.

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VOLKSWAGEN AG EXPENDITURE ON ENVIRONMENTAL PROTECTION

 

 

€ million

 

2008

 

2007

 

2006

 

2005

 

2004

Investments

 

8

 

20

 

19

 

27

 

16

Operating costs

 

185

 

177

 

170

 

194

 

202

OPERATING COSTS FOR ENVIRONMENTAL PROTECTION AT VOLKSWAGEN AG IN 2008
Share of environmental protection areas as percent
Operating costs for environmental protection at Volkswagen AG in 2008 - Share of environmental protection areas as percent (bar chart)

BUSINESS DEVELOPMENT RISKS AT VOLKSWAGEN AG

The business development of Volkswagen AG is exposed to essentially the same risks as the Volkswagen Group. These risks are explained in the Risk Report.

Risks arising from financial instruments

Risks for Volkswagen AG arising from the use of financial instruments are the same as those to which the Volkswagen Group is exposed. An explanation of these risks can be found in chapter "Risks arising from financial instruments".

dependent company report

The Board of Management of Volkswagen AG has submitted to the Supervisory Board the report required by section 312 of the AktG and issued the following concluding declaration:

“We declare that, based on the circumstances known to us at the time when the transactions with affiliated companies within the meaning of section 312 of the German Stock Corporation Act (AktG) were entered into, our Company received an appropriate consideration for each transaction. No transactions or measures were either undertaken or omitted on the instructions of or in the interests of Porsche or other affiliated companies in the reporting period.”

The Annual Financial Statements of Volkswagen AG (in accordance with the HGB) can be accessed from the electronic companies register at www.unternehmensregister.de

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