Investment planning

On November 21, 2008, the Supervisory Board of Volkswagen AG discussed the current situation and the outlook for 2009.

Due to the significant deterioration in business conditions in the fourth quarter of 2008 and the uncertainty about the further development of the global economy and demand for vehicles, the Board of Management has not presented a new investment budget to the Supervisory Board for approval.

As a matter of principle, the Volkswagen Group will continue to invest in an environmentally oriented range of vehicles based on the investment budget for 2008 to 2010 approved to date in order to leverage its strength in markets worldwide with its nine brands and to systematically increase its competitive advantage. Our investments in the new plants in Russia, India and North America will be made as planned.

In view of the deterioration in the situation in the international sales markets, development expenses and spending on property, plant and equipment for new models and technologies will be reviewed on the basis of the competitiveness of the sites and against the backdrop of a concentration on fuel-efficient cars. The priority here will be on engine developments that set new standards for efficiency and environmental friendliness, as well as alternative drives, whereas investments to expand capacity or overhaul structures will be postponed.

The discussion of the investment and financial plan was postponed to the Supervisory Board meeting in March 2009.

targets of value-based management

Based on long-term interest rates derived from the capital market and the target capital structure (fair value of equity to debt = 2:1), the minimum required rate of return on invested assets defined for the Automotive Division remains unchanged at 9%.

As in 2007, we again generated our current cost of capital last year and exceeded the minimum required rate of return. Over the medium term, we are aiming for a return on investment of more than 10% under our “18 plus” program, which is part of our “Strategy 2018”. As a consequence of the global financial crisis, however, we will have to accept a temporary decline in our return on investment and will be unable to reach our 9% minimum required rate of return.

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