QUALITATIVE AND QUANTITATIVE ANALYSIS OF VOLKSWAG EN

Authors (Universitat de

ar!e"ona#$ %ristina G&'e( u"e Gon(a)a *estre Ga"o+, -au"a .osse""& Garri)a

EDITO.$ /ordi *arti -ide"aserra (D0t1 %o'0ta2i"itat3 Universitat ar!e"ona#

Volkswagen

Volkswagen Group
Analyzing the company
Paula Rossell, Gonzaga Mestre y Cristina Gmez

13
INDEX

QUALITATIVE ANALYSIS PART I: Volkswagen analyze 1. Introduction..................................................................................................................4 2. Volkswagen AG........................................................................................................... ! Porsc"e case: its relation wit" Volkswagen................................................................1# #. $%& 'e'(ers...........................................................................................................14 4. Volkswagen e)olution................................................................................................1* *. +"are"olders.............................................................................................................1 . +take"olders..............................................................................................................1 ,. Volkswagen $+R.......................................................................................................2.. /ocation.....................................................................................................................21 0. %'erging 'arkets.....................................................................................................22 FINANCIAL ALNALYSIS (EUROSTOXX50 Volkswagen e ol!"#on$ PART II: Risk analysis 1. +"ort ter' risk......................................................................................................... 22 2. /ong ter' risk ..........................................................................................................2* #. Volkswagen Re1ort Risk...........................................................................................2 Researc" and de)elo1'ent risk ......................................................................2, Procure'ent risk................................................................................................2, Production risk .................................................................................................2, Risks arising 2ro' c"anges in de'and ............................................................2.

3uality risk ........................................................................................................20 Personnel risk ...................................................................................................20 IT risk ................................................................................................................#4. +trategies 2or "edging 2inancial risks ........................................................................#PART III: Pro2ita(ility analysis 1. +ales..........................................................................................................................#4 2. $ost o2 goods sold.....................................................................................................#4 #. 4argin Ratio..............................................................................................................#4 4. Turno)er Ratio...........................................................................................................#* *. Iso-Pro2ita(ility...........................................................................................................# . Return on %5uity........................................................................................................#, ,. Return on %5uity 6%7&R% TA8%+...........................................................................#. .. &1ti'u' 2-12...........................................................................................................40. Return on Assets ......................................................................................................41 1-. Real Ta9 Rate..........................................................................................................42 11. Value-Added............................................................................................................4# 12. R&A: +ol)ency Ratio and $as" $ycle....................................................................44 $onclusions...................................................................................................................4* 6i(liogra1"y...................................................................................................................4

QUALITATIVE ANALYSIS
%ART I& Volkswagen anal'(e
)* In"+o,!-"#on
;T"e Volkswagen Grou1 is one o2 t"e leading auto'o(ile 'anu2acturers worldwide and t"e largest auto'o(ile 1roducer in %uro1e. Its twel)e 2ascinating (rands o22er 'o(ility in e)ery )e"icle class to 'eet t"e "ig"est e91ectations: all around t"e world<. Volkswagen .#s"o+' Volkswagen was 2ounded on 2. 4ay 10#, as t"e Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH =>+ociety 2or t"e 1re1aration o2 t"e Ger'an Peo1le?s $ar>@ (y t"e Nazi Deutsche Arbeitsfront =Ger'an /a(our 7ront@.A T"e 1ur1ose o2 t"e co'1any was to 'anu2acture t"e Volkswagen car: originally re2erred to as t"e Porsc"e Ty1e -: t"en t"e Volkswagen Ty1e 1: and co''only called t"e Volkswagen 6eetle. T"is )e"icle was designed (y 7erdinand Porsc"e?s consulting 2ir': and t"e co'1any was (acked (y t"e su11ort o2 Adol2 Bitler. Curing t"e +econd Dorld Dar t"e 'anu2actory ne9t to 7allersle(en (egan to 1roduce 'ilitary cars and also 2lying (o'(s used (y t"e Allied 2orces. 4uc" o2 t"e work2orce at t"e 1lant was sla)e la(or: 1ri'arily 2ro' %astern %uro1e. A2ter t"e war in %uro1e: in Eune 104*: t"e 6ritis" Ar'y Royal %lectrical and 4ec"anical %ngineers =R%4%@ took control o2 2actory: and restarted 1roduction. As 1art o2 t"e Industrial 1lans 2or Ger'any: large 1arts o2 Ger'an industry: including Volkswagen: were to (e dis'antled. Total Ger'an car 1roduction was set at a 'a9i'u' o2 1-F o2 t"e 10# car 1roduction nu'(ers. T"e co'1any sur)i)ed (y 1roducing cars 2or t"e 6ritis" Ar'y: and in 104.: t"e 6ritis" Go)ern'ent "anded t"e co'1any (ack o)er to t"e Ger'an state: w"ere it was 'anaged (y 2or'er-&1el c"ie2 Beinric" Gord"o22. As 1art o2 t"e Industrial 1lans 2or Ger'any: large 1arts o2 Ger'an industry: including Volkswagen: were to (e dis'antled. Total Ger'an car 1roduction was set at a 'a9i'u' o2 1-F o2 t"e 10# car 1roduction nu'(ers. T"e co'1any sur)i)ed (y 1roducing cars 2or t"e 6ritis" Ar'y: and in 104.: t"e 6ritis" Go)ern'ent "anded t"e

co'1any (ack o)er to t"e Ger'an state: w"ere it was 'anaged (y 2or'er-&1el c"ie2 Beinric" Gord"o22. Production o2 t"e Ty1e - Volkswagen =re-designated Ty1e 1@ started slowly a2ter t"e war due to t"e need to re(uild t"e 1lant and (ecause o2 t"e lack o2 raw 'aterials: (ut 1roduction grew ra1idly in t"e 10*-s and 10 -s. T"e co'1any (egan introducing new 'odels (ased on t"e Ty1e 1: all wit" t"e sa'e (asic air-cooled: rear-engine: rear-dri)e 1lat2or'. In 10 -: u1on t"e 2lotation o2 1art o2 t"e Ger'an 2ederal go)ern'ent?s stake in t"e co'1any on t"e Ger'an stock 'arket: its na'e (eca'e Volkswagenwerk Aktiengesellsc"a2t =usually a((re)iated to Volkswagenwerk AG@. &n 1 Eanuary 10 *: Volkswagenwerk ac5uired Auto Hnion G'(B 2ro' its 1arent co'1any Cai'ler-6enz. T"e new su(sidiary went on to 1roduce t"e 2irst 1ost-war Audi 'odels: t"e Audi 71-# series: s"ortly a2terwards. Anot"er Ger'an 'anu2acturer: G+H 4otorenwerke AG: was 'erged into Auto Hnion on 2 August 10 0: creating a new co'1any: Audi G+H Auto Hnion AG =later rena'ed AHCI AG in 10.*@. /#ss#on T"e Grou1Is goal is to o22er attracti)e: sa2e and en)iron'entally sound )e"icles w"ic" can co'1ete in an increasingly toug" 'arket and set world standards in t"eir res1ecti)e class. At t"e sa'e ti'e: t"e 2ir' wants to 'eet t"e needs o2 its custo'ers and t"e 'arket: t"roug" e9cellence in care: 5uality: ser)ice and costs: wit" "ig"ly trained "u'an resources. V#s#on Volkswagen )ision is to continue (eing recognized as a de2ined co'1any in t"e 'arket: and (eco'e t"e leader in t"e sale and distri(ution s1are 1arts: ac"ie)ing t"e econo'ic ser)ice e9cellence: de)elo1'ent and growt" t"at "a)e always c"aracterized t"e 2ir'.

0* Volkswagen A1
T2e 3+an, Curing its "istory: Volkswagen "as de)elo1ed 2our logos: 7irst logo T"e 2irst logo was t"e result o2 an internal co'1etition in Volkswagen o22ices w"ic" was won (y 7ranz Rei's1iess wit" "is design o2 a >V> o)er a >D>. Its angles were 'atc"ed and co'1le'ented to 2or' a )ery consistent sign wit" t"e Gazi sy'(olis' o2 Ger'any. 6ecause o2 t"at: t"e (lades were si'1ly a re1resentation o2 t"e Gazi +wastika stylized to not (reak t"e (alance o2 t"e circular design t"at si'ulates a gear. Ger'an /a(our 7ront Dit" t"e a11roac" o2 t"e +econd Dorld Dar: t"e i'age "ad a 'inor c"ange w"ic" consisted in re'o)ing t"e (lades to gi)e 'ore e'1"asis to t"e gear corres1onding to t"e i'age o2 t"e >/a(our 7ront Ger'an> w"o was now in c"arge o2 t"e 1roduction o2 t"e car. Post-war A2ter t"e +econd Dorld Dar and under t"e control o2 t"e 6ritis": Volkswagen renews its i'age according to t"e situation and t"e interests o2 its new 'anager. T"e c"ange was s'aller (ut )ery noticea(le (ecause it (eca'e t"e 2irst instance o2 t"e Volkswagen?s logo t"at we can associate wit" t"e (rand as we know it today. T"e gears were re'o)ed and a container circle was set to raise t"e i'1ortance o2 t"e V and D (y gi)ing a solid conce1t o2 t"e 2ir'. T"e D 1ro1ortions were c"anged too.

Gowadays Al'ost "al2 a century later a new )ersion o2 t"e logo was created (y 4etalCesign. It is co'1osed (y a #C Cesign ty1e: a (lue (ackground and a 'etallic )olu'e edge t"at 1ro)ides t"e (ase o2 t"e V and D 'erged wit" a circle around t"e'. S!3g+o!4s an, las" la!n-2es Volkswagen acti)ities 'ay 2ocus on t"e auto'o(ile: (ut t"e Volkswagen Grou1 is 2ar 'ore t"an Just a car'aker: a wide )ariety o2 'o(ility-related ser)ices round o22 its 1ort2olio. T"e Grou1 co'1rises twel)e (rands 2ro' se)en %uro1ean countries: Volkswagen Passenger $ars: Audi: +%AT: KL&CA: 6entley: 6ugatti: /a'(org"ini: Porsc"e: Cucati: Volkswagen $o''ercial Ve"icles: +cania and 4AG. %ac" (rand "as its own c"aracter and o1erates as an inde1endent entity on t"e 'arket. T"e 1roduct s1ectru' ranges 2ro' 'otorcycles to low-consu'1tion s'all cars and lu9ury )e"icles. In t"e co''ercial )e"icle sector: t"e 1roducts include ranges 2ro' 1ick-u1s: (uses and "ea)y trucks. In addition: t"e Volkswagen Grou1 o22ers a wide range o2 2inancial ser)ices: including dealer and custo'er 2inancing: leasing: (anking and insurance acti)ities: and 2leet 'anage'ent.

)* Volkswagen %assenge+ Ca+s

Volkswagen Passenger $ars 'aintains 2acilities in 14 countries: w"ere it 1roduces )e"icles 2or custo'ers in 1*# nations. Curing t"e year 2-11: t"e Grou1Is core (rand 1resented a range o2 inno)ati)e and en"anced )e"icles. T"e 'ost recognized was t"e u1M 4odel (ecause it o22ers t"e 'a9i'u' s1ace wit"in t"e 'ini'u' di'ension. T"is way Volkswagen enters

into t"e s'all car seg'ent. &n t"e ot"er "and: t"ey redesign t"e iconIs car 6eetle and i'1ro)e t"e new Gol2 $a(riolet. In 2-12: Volkswagen Passenger $ars deli)ered *.,4 'illion )e"icles: setting a new record.

0* A!,#
Audi is one o2 t"e worldIs leading 'anu2acturers o2 1re'iu' cars and "as (een 1art o2 t"e Volkswagen Grou1 since 10 *. Today: t"e co'1any 'akes )e"icles ranging 2ro' co'1act to to1-o2-t"e range 'odels. In 2-11 introduced t"e Audi 3#: w"ic" co'(ines t"e dyna'ics o2 a co'1act car wit" t"e s1aciousness and )ersatility o2 o2 t"e an 1o1ular +HV. and 7urt"er'ore: t"ey created t"e ne9t generation 1re'iu' seg'ent series Audi A . T"ey also launc"ed t"e Audi 3* in a 2ull "y(rid )ersion and t"e su1er s1orts cars R. GT $ou1N: R. GT +1yder: t"e A. / D12 3uattro lu9ury saloon and t"e s1orty R+ # +1ort(ack. In 2-12: Audi deli)ered 'ore t"an 1.4** 'illion cars: setting a new record.

5* SEAT
+%AT looks (ack on a "istory s1anning o)er - years. A 'e'(er o2 t"e Volkswagen Grou1 since 10. : t"e +1anis" car'aker today designs: de)elo1s and 'anu2actures cars and co'1onents at its 1roduction sites in 6arcelona: 4artorell and Prat.

Curing 2-11 +eat (rand e91anded its 'odel range to include a s'all car: t"e +%AT 4ii. In 2-12: +%AT deli)ered 'ore t"an #21:--- )e"icles to its custo'ers.

6* 78OD A
Kkoda "as (een a (rand 'e'(er o2 t"e Volkswagen 2a'ily 2or 2- years. Curing 2-11 Kkoda 1resented t"e $itigo and t"e Ra1id: two )e"icles t"at e9tend t"e (randIs 'odel range. Dit" t"e launc" o2 t"e $itigo: Kkoda entered into t"e s'all car seg'ent o22ering a 2res" e9terior design and a s'art interior solution.

5* 9en"le'
6entley 4otors was 2ounded (y D.&. 6entley in 1010 and "as (een 1art o2 t"e Volkswagen Grou1 since 100.. At its "ead5uarters in $rewe: t"e %nglis" car'aker 'anu2actures lu9ury cars t"at co'(ine tec"nology cutting-edge wit" t"e auto'oti)e ulti'ate in

cra2ts'ans"i1. T"e 6ritis" lu9ury (rand 6entley 1resented in 2-11 t"e new generation o2 t"e $ontinental GT $a(riolet. T"eir 'ain o(Jecti)e was to con)ert it into a 'ore elegance and lu9ury car o2 t"e 'odel range.

:* 9!ga""#
7or 'ore t"an 1-- years: 6ugatti "as (een synony'ous wit" aest"etic and tec"nologically e9ce1tional cars. In 100.: t"e legendary (rand (eca'e 1art o2 t"e Volkswagen Grou1. +ince 1roduction started in 2--*: t"e 6ugatti Veyron 1 .4 and its si(lings Grand +1ort: +u1er +1ort and Vitesse are 'anu2actured in t"e co'1anyIs 2acility in 4ols"ei': Alsace.

6ugattiIs key )alues ;Art: 7or': Tec"ni5ue< co'e to li2e in its 1roducts. $urrently: t"e 6ugatti Veyron 1 .4 Grand +1ort Vitesse wit" a total o2 ..2 kD =1:2-- "1@ is t"e 2astest o1en to1 car e)er (uilt in series 1roduction.

;* La<3o+g2#n#
T"e Italian s1orts car 'anu2acturer /a'(org"ini "as (een 1art o2 t"e Volkswagen Grou1 since 100.. Today: so'e 0*- e'1loyees work at its "ead5uarters in +antIAgata 6olognese 'aking su1er s1orts cars t"at are co)eted t"e world o)er. In 2-12: 'ore /a'(org"ini t"an 2:--deli)ered )e"icles.

=* %o+s-2e
Porsc"e is one o2 t"e (est known and strongest (rands in t"e auto'oti)e world and (eca'e a 'e'(er o2 t"e Volkswagen Grou1 in 2-12. /ei1zig. Porsc"e In 2-12: 'aintains t"e own 1roduction sites in +tuttgart and co'1any

deli)ered 141:--- cars: setting a new record. $urrent 'odels are t"e Porsc"e 011: $ayenne: Pana'era: 6o9ster and $ay'an. In addition to Destern %uro1e: t"e co'1anyIs key sales 'arkets are t"e H+A and $"ina.

>* D!-a"#
T"e Italian 'otorcycle (rand and Cucati was 2ounded in 102

"as (een 1art o2 t"e Volkswagen Grou1 since 2-12. T"e co'1anyIs re1utation legendary is (ased on on its t"e success

racetrack. It 1roduces to1-o2-t"erange 'otorcycles in 6ologna. In 2-12: Cucati 1roduced 'ore t"an 41:--- 'otorcycles.

)0* Volkswagen Co<<e+-#al

&)er *- years ago: t"e 2oundation was laid 2or t"e Volkswagen 1lant in Bano)er. T"e 2irst trans1orter rolled o22 t"e 1roduction line "ere on . 4arc" 10* . Curing 2-11 Volkswagen $o''ercial launc"ed t"e new 4ulti)an 6lue4otion: 'aking it really attracti)e (ecause o2 its low consu'1tion o2 2uel = .4 litters o2 dieselO1-- k'@ in t"is class o2 )e"icle. It also 1roduced t"e new A'arok +inlge$a(: in w"ic" t"e loading s1ace is larger.

))* S-an#a
+cania was one o2 t"e 2irst co'1anies in t"e world to 'ake co''ercial )e"icles and "as (een a 'e'(er o2 t"e Volkswagen Grou1 since 2--.. T"is long-standing +wedis" (rand 'anu2actures "ea)y trucks: (uses and engines at nine 1roduction sites in si9 countries.

In 2-11 +cania 1resented an inno)ation in t"e 2ield o2 truck engines: wit" t"e new %uro 'odel: t"ey ac"ie)ed to cut t"e e'issions wit" t"e sa'e 2uel e22iciency as t"e 1re)ious generation o2 engines. In 2-12: +cania deli)ered and took care o2 o)er 4:--co''ercial )e"icles to custo'ers in 'ore t"an 1-- 'arkets.

)0* /AN
T"e 4AG Grou1 is one o2 %uro1eIs leading industrial 1layers in trans1ort-related engineering. As a su11lier o2 trucks: (uses: diesel engines: tur(o 'ac"inery: and s1ecial gear units: 4AG e'1loys a11ro9i'ately *2:*-- 1eo1le worldwide. Its di)isions "old leading 1ositions in t"eir res1ecti)e 'arkets. 4AG "as (een in (usiness 2or o)er 2*years. In 2-11: Volkswagen increased its e5uity interest in 4AG +% t"e **.-0F o2 t"e )oting rig"ts and *#.,1F o2 t"e s"are ca1ital and t"ere2ore consolidated anot"er success2ul (rand in t"e Grou1. 4AG +% is a co'1any and a (rand t"at o22ers trucks and (uses 1ower engineering And 2inancial ser)ices (usiness.

?Rela"#ons2#4 Volkswagen@%o+s-2e

Volkswagen and Porsc"e "a)e (een always stretc" related. Porsc"e was 2ounded in 10#1 (y 7erdinand Porsc"e w"o was t"e designer o2 t"e 2irst car o2 Volkswagen: t"e V1 'odel or co''only known as ;6eetle<. +ince t"e (eginning and until t"e 1resent Volkswagen and Porsc"e cars "a)e (een s"earing lots o2 co'1onents o2 t"eir 1rinci1al cars. 7or e9a'1le t"e 2irst Porsc"e 'odel =t"e Porsc"e 4 launc"ed in 10#.@ "ad 1arts o2 t"e Volkswagen 6eetle. Gowadays t"e Porsc"e $ayenne: introduced in t"e 'arket in 2--2: s"ares its w"ole c"assis wit" Tuareg =1roduced (y Volkswagen@ and wit" Audi 3,. T"e actual relations"i1 (etween Volkswagen and Porsc"e was caused (y a 1ower struggle wit"in t"e Porsc"e 2a'ily. Dol2gang Porsc"e: one o2 t"e grandc"ildren o2 t"e 2ounder 7erdinand Porsc"e: (egan a (attle against "is cousin 7erdinand PiPc" in order to get t"e control o2 (ot" co'1anies. T"atIs t"e reason w"y in 2--. Dendelin Diedecking: w"o at t"at 'o'ent was t"e 1resident o2 Porsc"e: wanted to get t"e ,*F o2 Volkswagen =a conglo'erate o2 se)eral (rands 2i2teen ti'es (igger t"an Porsc"e@. &n Euly 2#: 2--0: Dendelin Diedeking was 2orced to resign. Be "ad ac"ie)ed t"e 1ur1ose o2 Porsc"e as reac"ing a *1F o2 Volkswagen. Bowe)er: it "ad to inde(t Porsc"e coast at 1-:--- 'illion euros t"us Jeo1ardize t"eir accounting and econo'ic )ia(ility. &n t"e ot"er "and: 7erdinand PiPc" was a 'e'(er o2 t"e (oard o2 Volkswagen and o11osed t"e 1lans o2 "is cousin. PiPc" used its 1ower2ul allies t"e +tate o2 /ower +a9ony: w"ic" owns 2-F o2 t"e s"ares o2 Volkswagen: and t"e c"air'an o2 t"e Dorks $ouncil o2 Volkswagen: de2ender o2 t"e #,-:--- Jo(s o2 Volkswagen.

A2ter "is resignation (ot" 2a'ilies signed a truce. In 2--0 Volkswagen (oug"t t"e 40F o2 s"ares o2 Porsc"e 2or less t"an 4--- 'illion dollars. T"is rate o2 s"ares increased in t"e last years in order to reac" a 1artial integration o2 Porsc"e into t"e Volkswagen Grou1.

6* CEO
/anage<en" 9oa+, T"e 6oard o2 4anage'ent o2 Volkswagen AG co'1rises nine 'e'(ers. %ac" 6oard 4e'(er is res1onsi(le 2or one or 'ore 2unctions wit"in t"e Volkswagen Grou1. Pro2. Cr. 4artin Dinterkorn is t"e $"air'an. T"e work o2 t"e 6oard o2 4anage'ent o2 Volkswagen AG is su11orted (y t"e (oards o2 t"e (rands and regions as well as (y t"e ot"er grou1 (usiness units and "oldings.

5* Volkswagen e ol!"#on
Sales an, +e en!es e ol!"#on&

As it is s"own in t"e 1re)ious gra1g": t"ere is a 1ositi)e tendency in general ter's in sales and re)enues. S!3s#,#a+#es As we can 2igure out: we 2ind 'ore t"an a "al2 o2 t"e su(sidiaries in %uro1e: and is interesting t"at only t"e 2F is located in t"e H+A.

5* S2a+e2ol,e+s

T"e t"ree 'ost i'1ortant s"are"olders are: Porsc"e: as it "as (een e91lained 1re)iously in t"e relations"i1: owns t"e *-.,#F. T"e Go)ern'ent o2 Land Niedersachsen "as t"e 2-F. 3atar "olding //$ "as t"e 1,F.

:* S"ake2ol,e+s
S"+a"eg#- ,#alog!e w#"2 s"ake2ol,e+s At Volkswagen: working toget"er to 2or' national and international (usiness networks is a 2unda'ental 1art o2 t"e on-going dialogue "eld wit" key cor1orate grou1s and stake"olders. T"eir role is to contri(ute its tec"nical and social e91ertise to t"is dialogue: and su11ort countless 1roJects. Co<<!n#"' ,#alog!e T"e >co''unity dialogue> is a stake"older 2oru' set u1 to ensure t"at interaction and in2or'ation s"aring (etween t"e local co''unity and Volkswagen is c"aracterised (y a sense o2 trust.

T"eir o(Jecti)e is to create trans1arency and de)elo1 'utual understanding and trust. T"is is o2ten a good way o2 de2using any 1otential con2licts o2 interest in a le)el-"eaded 'anner 2ro' t"e outset. /a#n s"ake2ol,e+s oA Volkswagen T"e 'ain stake"olders t"at we "a)e analysed are t"e 2ollowings:

Cl#en"s T"e range o2 'odels t"at Volkswagen Grou1 1roduces is )ery wide. T"is way: t"e clients t"at t"e co'1any "as are really nu'erous and di22erent. De can 2ind 1ri)ate clients wit" a )aried 1urc"asing 1ower and co'1anies dedicated to distinct sectorsQ so'e o2 t"e' use t"eir cars in t"e 1roduction 1rocess =trans1ort o2 raw 'aterials and 1assenger@ and ot"ers use t"e' as a 'ean o2 trans1ort.

S!44l#e+s F#-osa& 7icosa is t"e o22icial su11lier and tec"ni5ue s"are"older o2 t"e 'aJority o2 t"e worldwide car 'anu2actories. Its 1roducts are Rear-)iew +yste's: Ve"icle $o''unication +yste's: Ad)anced Cri)er Assistance +yste's: %lectro'o(ility +yste's: Gears"i2t +yste's: Parking 6rake +yste's: Cri)e $a(les: +yste's 2or 7luids: Air Intake +yste's: Industrial Ve"icle $o'1onents and +yste's 2or Coors and +eats. 9os-2& 7or nearly 12* years: 6osc" "as ensured t"e continued )ia(ility o2 indi)idual 'o(ility: clean and econo'ical: sa2e and co'2orta(le. De are a relia(le and inno)ati)e su11lier and a trusted 1artner to t"e glo(al auto'oti)e industry. 6osc" auto'oti)e tec"nology is di)ided in: Gasoline and Ciesel +yste's: $"assis +yste's $ontrol: %lectrical Cri)ers: +tarter 4otors and Generators: $ar 4ulti'edia and Auto'oti)e %lectronics.

S#e<ens& As Partners o2 t"e Auto'oti)e +ector: +ie'ens "as de)elo1ed a set o2 conce1ts and integrated solutions 1er2ectly aligned 2or t"e entire 1roduction c"ain: adding )alue 2ro' 1resses to 2inal asse'(ly. /#-2el#n& &ne o2 t"e 'ain 1roducers o2 1neu'atics around t"e world is 4ic"elin. 4ic"elin "olds 2ore2ront 1ositions in e)ery tyre 'arket as well as in tra)el-related ser)ices. It ac"ie)es t"at (y le)eraging its tec"nological leaders"i1: ca1acity 2or inno)ation: "ig"-5uality 1roducts and ser)ices. Nok#a& As an i'1ortant co'1any in t"e 'o(ile sector: Gokia 1ro)ides to Volkswagen 1roducts suc" as GP+ Ga)igation and +1eakers 2or t"e car. E<4lo'ees %)olution o2 Volkswagen e'1loyees: Gowadays: Volkswagen owns **-:--- e'1loyees. T"eir success is (ased on t"e 5uali2ication and 1ersonal co''it'ent.

A co'1any will only (e a(le to sur)i)e in t"e 2ace o2 international co'1etition i2 it "as a to1 tea': c"aracterised (y a "ig" le)el o2 co'1etence: dedication: in)enti)eness and 2itness. $o'1etence is created 2ro' good (asic training and a li2e-long willingness to learn. Cedication ideally 'eans entre1reneurial t"inking and actions: not only (y 'anage'ent sta22. Acti)e contri(ution o2 ideas and 1artici1ation are e91ected o2 all 'e'(ers o2 sta22. Co<4e"#"o+s Volkswagen leads t"e $ontinent as %uro1e?s car'aker: (ut "as so'e co'1etitors suc" as: 9/B T"e 64D Grou1 is a Ger'an auto'o(ile: 'otorcycle and engine 'anu2acturing co'1any 2ounded in 101,. It also owns and 1roduces t"e 4ini 'ar5ue: and is t"e 1arent co'1any o2 Rolls-Royce 4otor $ars. 64D 1roduces 'otorcycles under 64D 4otorrad. In 2-1-: t"e 64D grou1 1roduced 1:4.1:2*# auto'o(iles and 112:2,1 'otorcycles across all its (rands. 64D is 1art o2 t"e >Ger'an 6ig #> lu9ury auto'akers: along wit" Audi and 4ercedes-6enz: w"ic" are t"e t"ree (est-selling lu9ury auto'akers in t"e world.

%SA& %e!geo" an, C#"+oCn Dit" its two glo(ally renowned (rands: Peugeot and $itroPn: P+A Peugeot $itroPn sold 'ore t"an 2.0 'illion )e"icles worldwide in 2-12: o2 w"ic" #.F were outside %uro1e. As %uro1eIs second largest car'aker: it generated sales and re)enue o2 **.4 (illion R. P+A Peugeot $itroPn "as sales o1erations in 1 - countries: and 2-2:1-- e'1loyees worldwide. In 2-11: t"e Grou1 de)oted 'ore t"an 2.# (illion R to RSC t"roug" its researc" centres in 7rance: /atin A'erica and $"ina: wit" a s1ecial 2ocus on new energies. 1ene+al /o"o+s General 4otors =G4@: t"e world?s largest auto 'anu2acturer: 'akes cars and trucks: wit" (rands suc" as 6uick: $adillac: $"e)rolet: and G4$. G4 also (uilds cars t"roug" its G4 Caewoo: &1el: Vau9"all: and Bolden units. General 4otors 7inancial $o'1any 1ri'arily conducts 2inancing acti)ities. T"roug"out its 2inancial woes: G4 "as recei)ed

(illions o2 dollars in loans 2ro' t"e $anadian and H+ go)ern'ents: negotiated concessions wit" la(our unions: and Jettisoned (rands. T"e auto giant went t"roug" a si9-week 1eriod o2 (ankru1tcy 1rotection in 2--0Q it issued an initial 1u(lic o22ering and returned to t"e stock 'arket in 2-1-. Da#<le+ A1& /e+-e,es@9en( Cai'ler?s 1assenger car (usiness: 4ercedes-6enz: includes co'1act: "y(rid: and electric 'odels: including its s'art and 6-$lass 7-$ell (rands. Its Cai'ler Trucks Gort" A'erica unit 'anu2actures "ea)y-trucks in t"e H+: and wit" its 7uso: 4ercedes-6enz: and +1rinter (rands: Cai'ler is t"e world?s leading 'aker o2 co''ercial )e"icles. T"e Atego 6lueTecBy(rid truck was launc"ed in 2-11. T"e co'1any "olds a 22F stake in aeros1ace and de2ence consortiu' %AC+: and -F in 7or'ula &ne tea' 4ercedes6enz Grand Pri9. Cai'ler sells its )e"icles in 4- countries: (ut %uro1e re1resents 4-F o2 its sales. To'o"a Toyota 4otor $or1oration is a Ea1anese 'ultinational auto'aker. In 2-1-: Toyota e'1loyed #--:,#4 1eo1le worldwide: and was t"e t"ird-largest auto'o(ile 'anu2acturer in 2-11 (y 1roduction (e"ind General 4otors and Volkswagen Grou1. Toyota is t"e ele)ent"-largest co'1any in t"e world (y re)enue. In Euly 2-12: t"e co'1any re1orted it "ad 'anu2actured its 2-- 'illiont" )e"icle. Toyota 4otor $or1oration grou1 co'1anies are Toyota =including t"e +cion (rand@: /e9us: Cai"atsu: and Bino 4otors: along wit" se)eral >nonauto'oti)e> co'1anies.

;* Volkswagen CSR
Volkswagen grou1 "as always taken into account its social res1onsi(ility into its culture. 7or e9a'1le: in t"e 10,-s a cor1orate 2oundation in 6razil w"ic" 1ro'oted education and "ealt" o2 t"e regions was located in one o2 Volkswagen industries. A 2ew years later: t"e $o''unity Trust was 2ounded in +out" A2rica wit" si'ilar goals. T"ese two e9e'1lars o2 Volkswagen Grou1 1roJects ty1i2y t"e 1"iloso1"y and 2unda'ental (elie2s o2 its social co''it'ent. T"ere are two core ele'ents at work "ere:

1@ $ontinuity: not su1er2icial 2ollowing o2 2as"ion. 2@ Dorking to create sustaina(le structural de)elo1'ents at t"eir sites as sources o2 econo'ic and social sti'ulus and o11ortunities 2or stake"olders. /ong (e2ore $+R e)ol)ed into a strategic as1ect o2 cor1orate 1olicy: Volkswagen was associated wit" t"e goal o2 'arrying entre1reneurial sel2-interest wit" 1"ilant"ro1ic 'oti)es. It is t"is cor1orate culture: w"ic" allows t"e Volkswagen Grou1 to integrate traditional entre1reneurial (usiness )alues wit" a 'odern understanding o2 res1onsi(ility and sustaina(ility. T"is 2ra'ework re2lects t"e c"allenges o2 t"e 21st century: in 1articular t"ose o2 resource conser)ation and cli'ate 1rotection as well as intra- and inter-generational 2air 1lay. In conclusion t"e di)erse $+R 1roJects initiated (y t"e Volkswagen Grou1 on a glo(al scale 'ust all satis2y t"ese keys: T Are in accordance wit" t"e Grou1Is 1rinci1les w"ile addressing s1eci2ic local or regional issues. T %91ress t"e di)ersity wit"in t"e Grou1 as well as t"e social en)iron'ent wit"in w"ic" t"e 1roJects take 1lace. T &riginate 2ro' an intense stake"older dialogue wit" local 1layers: t"ose acti)ely in)ol)ed in 1roJect realisation. T ProJect 'anage'ent takes 1lace locally and is t"e res1onsi(ility o2 t"e units acti)e at t"at location.

=* Lo-a"#on
T"e Grou1 o1erates 1-- 1roduction 1lants in 10 %uro1ean countries and a 2urt"er eig"t countries in t"e A'ericas: Asia and A2rica. %)ery weekday: t"e co'1any 1roduce a(out #,:,-- )e"icles: and work in )e"icle-related ser)ices or ot"er 2ields o2 (usiness. T"e Volkswagen Grou1 sells its )e"icles in 1*# countries.

>* E<e+g#ng <a+ke"s

Volkswagen AG: %uro1eIs largest car'aker: is in)esting **- 'illion euros in cars 'anu2actured in Russia and $"ina to 1re1are 2or 2urt"er growt" in t"e countriesI )e"icle 'arkets. Volkswagen is s1ending 2*- 'illion euros at its auto 1lant in Laluga: Russia: 2or an asse'(ly line t"at will (uild -- engines a day (y 2-1*. 4oreo)er: Volkswagen 1lans #-- 'illion euros in t"e trans'ission 1lant o2 TianJin: $"ina. Volkswagen: w"ic" "as a strategy to o)ertake General 4otors and Toyota 4otor to (eco'e t"e worldIs largest car'aker (y 2-1.: is s"i2ting 2ocus away 2ro' Destern %uro1e: w"ere industry wide auto sales are 2orecast to s"rink t"is year. ;Russia is t"e 1ri'ary strategic growt" 'arket in %uro1e 2or t"e Volkswagen grou1< and (y 2-1.: ;we intend to sell a "al2 a 'illion )e"icles "ere annually:< $"ie2 %9ecuti)e &22icer 4artin Dinterkorn said at t"e 1ress con2erence in ad)ance o2 t"e 4oscow International 4otor +"ow o1ening to'orrow.

FINANCIAL ALNALYSIS
EUROSTOXX50 Volkswagen e ol!"#on
$o'1aring t"e e)olution during t"e last 2our years o2 t"e %urosto99*- 'arket and t"e Volkswagen Grou1Is stocks we o(ser)e t"at Volkswagen "as increased its )alue on t"e stock'arket #1 o)er a 'ean o2 110:1. D"ereas t"e %urosto99*- "as increased 2 #:42 o)er its own 'ean =2. -2:0-@. +o in conclusion t"e growt" o2 "as a22ected in a 1ossiti)e way t"e e)olution o2 t"e %urosto99*-. 1. Risk analysis 2. Pro2ita(ility analysis

%ART II& R#sk anal's#s

Risk is t"e uncertainty associated wit" any in)est'ent. T"is 'eans t"at risk is t"e c"ance t"at an in)est'ent?s actual return will (e di22erent t"an e91ected. In ot"er words: risk is t"e 1ossi(ility t"at s"are"olders will lose 'oney w"en t"ey in)est in a co'1any t"at "as de(t: i2 t"e co'1any?s cas" 2low 1ro)es inade5uate to 'eet its 2inancial o(ligations. +o a 2unda'ental idea in 2inance is t"e relations"i1 (etween risk and return. T"e greater t"e a'ount o2 risk t"at an in)estor is willing to take on: t"e greater t"e 1otential return. T"e reason 2or t"is is t"at in)estors need to (e co'1ensated 2or taking on additional risk

)* S2o+" "e+< +#sk

Sol en-' Ra"#os

00)0 $. Assets $. /ia(ilities 1,,.-4 . . 4 Bo+k#ng Ca4#"al Sol en-' Ra"#o

T"e Dorking $a1ital o2 any co'1any 'easures t"e ca1a(ility o2 co)ering t"e s"ort ter' de(ts wit" t"e current assets. As we can see on t"e data: Volkswagen Grou1 "as 2inancial ca1acity to 'eet its s"ort-ter' de(t =D$U-@. Anot"er way to calculate t"is relations"i1 is o(taining t"e +ol)ency Ratio. In t"at case: all results are "ig"er t"an 1. T"ere2ore as we "a)e 1redicted wit" t"e Dorking $a1ital: our co'1any is sol)ent in t"e s"ort ter'. 4oreo)er: t"is ca1acity "as increased o)er t"e years.

00)0 $. Assets +tocks $. /ia(ilities 1,,.-4 2. ,4 . . 4

In t"is second ratio we analyze t"e ca1acity o2 t"e co'1any to co)er t"e s"ort ter' de(t wit" t"e current assets wit"out taking into account t"e in)entories =stocks@. As we can see: t"e results are "ig"er t"an 1: so Volkswagen Grou1 is a(le to co)er itIs i''ediately de(ts.

00)0 $as" $. /ia(ilities 1.4.. . . 4 A-#, "es" Dit" t"e acid test we analyze t"e ca1a(ility t"at t"e co'1any "as to co)er its current lia(ilities wit" its cas". As we can see Volkswagen can co)er only a 2-F o2 its current lia(ilities. T"at 'eans t"is co'1any "as not 'uc" cas". L#D!#,#"' Ra"#os

00)0 Recei)a(les +ales 1--00 102 , A g 4e+#o, oA -as2

T"e a)erage 1eriod o2 cas" is t"e nu'(er o2 days t"at t"e co'1any takes to con)ert its sales in cas". Volkswagen s"ows t"at it "as an a)erage o2 2-: , days in get its sales in cas".

00)0 Paya(les $ost o2 goods sold Initial stock 7inal stock Purc"ases -44#*1 1*,*1. 2,**1 2. ,4 1*. 41 A g 4e+#o, oA 4a'<en"s ! Purc"ases V $ost o2 goods sold-Initial stock W 7inal stock T"e a)erage 1eriod o2 1ay'ent is t"e nu'(er o2 days t"at t"e co'1any takes to 1ay its (ills to t"e su11liers. Volkswagen "as (een reducing t"ese days 2ro' 1:4, to #.:1-: w"ic" 'eans t"at t"e co'1any is co''itted and takes care o2 its su11liers.

00)0 Cas2 C'-le T"e $as" $ycle is t"e di22erence (etween t"e a)erage 1eriod o2 1ay'ent and t"e a)erage 1eriod o2 cas". In ot"er words: is t"e ti'e t"at t"e co'1any needs e9ternal 2inancial resources. As we can see: since 2--0 Volkswagen "as reduced t"is 1eriod in a "al2.

Solvency Ratio an Cash Cycle

4354

relationshi p

4356 4367 4368 4369 4364 4366 53;7 So" ven!: .a ti o a nd %a s h %:!" e re" a ti ons hi 0

6366

56366

46366

<6366

96366

=6366

Volkswagen is situated in a 1ositi)e relations"i1 (etween t"e +ol)ency Ratio and t"e $as" $ycle. T"at 'eans t"at is a non-risk co'1any (ecause is sol)ent and "as li5uidity.

0* Long "e+< +#sk

00)0 Total assets %5uity #-0 44 .1.2* Le e+age Ra"#o T"e /e)erage Ratio 'easures t"e ca1a(ility t"at t"e co'1any "as to co)er its e5uity wit" t"e total assets. In t"e case o2 Volkswagen is lower t"an a ,-F =around a 4F@: w"ic" 'eans t"at t"e co'1any doesnIt "a)e any risk in t"e long ter'.

&(ser)ing t"ese co'1anies 2ro' t"e %urosto99 *-: Volkswagen is t"e t"ird one wit" t"e "ig"est le)erage ratio. T"at is (ecause t"e co'1any is )ery sol)ent in t"e long ter'.

6* Volkswagen R#sk Re4o+"

VolkswagenIs sustaina(le success de1ends on "ow 1ro'1tly t"ey identi2y t"e risks arising 2ro' t"eir o1erating acti)ities and "ow 2orward-looking t"ey are in 'anaging t"e'. T"e Volkswagen Grou1Is internal control syste' and a co'1re"ensi)e risk 'anage'ent syste' "el1 t"e co'1any deal wit" t"ese risks in a res1onsi(le 'anner.

S4e-#A#- +#sks
/a-+oe-ono<#- +#sk Volkswagen Grou1 (elie)es t"at t"e (iggest risks to continued glo(al econo'ic e91ansion consist 1ri'arily o2 unanswered 5uestions surrounding t"e resolution o2 t"e %uro1ean and H+ de(t crises and t"e 2uture institutional structures in t"e %urozone. I'(alances in 2oreign trade and )olatile 2inancial 'arkets are also contri(uting to a "ig" le)el o2 uncertainty. Added to t"is are geo1olitical risks resulting 2ro' tensions in t"e 4iddle %ast and Gort" A2rica: w"ic" could i'1act negati)ely on t"e trend in energy and co''odity 1rices. Cue to t"e 1ersistent structural c"allenges in t"e industrialized nations: a cli'ate o2 uncertainty re'ains in e)idence in t"e international 'arkets. T"is is indicated (y a lack o2 in)est'ent (y (usinesses and "esitant lending on t"e 1art o2 co''ercial (anks. T"is "as a considera(le i'1act on t"e Volkswagen Grou1Is risk 1osition. Se-"o+@s4e-#A#- +#sk T"e growt" 'arkets o2 Asia: +out" A'erica: and $entral and %astern %uro1e are 1articularly i'1ortant in ter's o2 t"e glo(al trend in de'and 2or 1assenger cars. Alt"oug" t"ese 'arkets "ar(our t"e greatest 1otential: t"e o)erall en)iron'ent in so'e o2 t"e countries in t"ese regions 'akes it di22icult to increase unit sales 2igures t"ere. +o'e "a)e "ig" custo's (arriers or 'ini'u' local content re5uire'ents 2or do'estic 1roduction: 2or e9a'1le. 7urt"er'ore: t"e glo(al econo'ic slowdown could i'1act negati)ely on consu'er con2idence in so'e o2 t"ese countries Price 1ressure in esta(lis"ed auto'oti)e 'arkets is a 1articular c"allenge 2or t"e Volkswagen Grou1 as a su11lier o2 )olu'e and 1re'iu' 'odels due to its "ig" le)el o2 'arket co)erage. I2 glo(al econo'ic conditions deteriorate: co'1etiti)e 1ressures are

likely to increase 2urt"er. 4anu2acturers will res1ond (y o22ering 1rice discounts in order to 'eet t"eir sales targets: t"ere(y 1utting t"e entire sector under 1ressure: 1articularly in Destern %uro1e: t"e H+A and $"ina.

Resea+-2 an, ,e elo4<en" +#sk

T"ey counter t"e risk t"at it 'ay not (e 1ossi(le to de)elo1 1roducts or 'odules wit"in t"e s1eci2ied ti'e2ra'e: to t"e re5uired 5uality standards: or in line wit" cost s1eci2ications. 6ecause o2 t"at: t"ey regularly co'1are t"is 1rogress wit" t"e original targetsQ in t"e e)ent o2 de)iations: t"ey introduce a11ro1riate counter-'easures in good ti'e. Volkswagen end-to-end 1roJect organization su11orts e22ecti)e coo1eration a'ong all areas in)ol)ed in t"e 1rocess: ensuring t"at s1eci2ic re5uire'ents are incor1orated into t"e de)elo1'ent 1rocess as early as 1ossi(le and t"at t"eir i'1le'entation is 1lanned in good ti'e.

%+o-!+e<en" +#sk
T"e glo(al rise in auto'oti)e industry unit sales is also re2lected in an increased need a'ong su11liers 2or in)est'ent 2inancing and working ca1ital. In t"e %urozone: "owe)er: t"e euro crisis is i'1eding 1ro)ision o2 t"e necessary 2inancing. T"is 'ay lead to declines in indi)idual 'arket seg'ents and an ad)erse e22ect on su11liersI 2inancial 1osition. In t"e second "al2 o2 2-12: in)estors (eca'e 'ore reluctant to in)est in t"e auto'oti)e su11ly sector due to t"e dro1 in de'and in %uro1e and t"e di22icult situation 2acing co'1etitors. Volkswagen 1rocure'ent risk 'anage'ent syste' is well 1re1ared 2or t"is situation. T"ey continuously 'onitor c"anges at t"e su11liersI end and: i2 t"ere are any negati)e de)elo1'ents: use a suite o2 di22erent 'easures intended to "el1 reduce risks and ensure su11lies. T"is ena(les (ot" to largely a)oid su11ly risks due to su11lier de2aults and 'ini'ize t"e 2inancial e22ects o2 crises u1 to and including insol)encies in t"e su11ly c"ain.

%+o,!-"#on +#sk
In t"e second "al2 o2 t"e re1orting 1eriod: 'ost %uro1ean 'arkets e91erienced a s"ar1 2all in unit sales t"at "ad a noticea(le i'1act on t"e entire %uro1ean auto'oti)e industry. At Volkswagen largest co'1etitors: t"e dro1 in unit sales in core seg'ents

led to a decline in 1lant and work2orce ca1acity utilization: w"ic" in e9tre'e cases e)en resulted in 2actory closures. 7or se)eral reasons: t"e Volkswagen Grou1 was a(le to address t"is risk success2ully and t"us kee1 ca1acity utilization at its %uro1ean locations largely unc"anged: - 7irstly: t"e Volkswagen Grou1 (ene2its 2ro' its (road 1roduct range: so t"at declines in indi)idual )e"icle seg'ents can (e o22set elsew"ere. - +econdly: t"eir 1resence in al'ost all t"e worldIs 'arkets also "el1s t"e' to a(sor( 2luctuations in de'and in one region wit" t"eir glo(al and 2le9i(le 1roduction network. Ge)ert"eless Volkswagen is (eing a22ected (y t"e de)iation o2 t"e de'and wit" res1ect to t"e original 1lan (etween di22erent )e"icle e5ui1'ent 2eatures in t"e s"ort ter': w"ic" can cause (ottlenecks. T"at?s w"y t"ey "a)e )arious tools t"at ena(le suc" c"anges in de'and as early as 1ossi(le: introduce a11ro1riate 'easures to adJust ca1acity and t"us 'ini'ize t"e su11ly risk during 1eaks in de'and 2or indi)idual )e"icle 2eatures. +1ecial risks 'ay arise during large 1roJects. T"ese result in 1articular 2ro' contracting de2iciencies: 'iscosting: 1ost-contracting c"anges in econo'ic and tec"nical conditions: and 1oor 1er2or'ance on t"e 1art o2 su(contractors. De counter t"ese risks (y 1er2or'ing a11ro1riate 1roJect controls t"roug"out all 1roJects.

R#sks a+#s#ng A+o< -2anges #n ,e<an,

$onsu'er de'and not only de1ends on real 2actors suc" as dis1osa(le inco'eQ it is also s"a1ed (y 1syc"ological 2actors t"at are i'1ossi(le to 1lan 2or. Increased 2uel and energy 1rices could lead to une91ected (uyer reluctance: w"ic" could (e 2urt"er e9acer(ated (y 'edia re1orts. T"is is 1articularly t"e case in saturated auto'oti)e 'arkets suc" as Destern %uro1e: w"ere de'and could dro1 as a result o2 owners "olding on to t"eir )e"icles 2or longer. In 2-12: t"e e22ect o2 un1lanna(le 1syc"ological de'and 2actors was e9acer(ated (y t"e euro crisis and its i'1act on t"e glo(al econo'y and t"e entire auto'oti)e industry. Volkswagen Grou1 is countering t"is (uyer reluctance wit" our attracti)e range o2 'odels and in-de1t" custo'er orientation.

In addition to (uyer reluctance as a result o2 t"e crisis: a co'(ination o2 )e"icle ta9es (ased on $&2 e'issions X like t"ose already structured in so'e %uro1ean countries X and "ig" oil and energy 1rices is causing a s"i2t in de'and towards s'aller seg'ents and engines in indi)idual 'arkets. Volkswagen Ag counter t"e risk t"at suc" a s"i2t will negati)ely i'1act t"e co'1any earnings (y constantly de)elo1ing new: 2uel-e22icient )e"icles and alternati)e dri)e tec"nologies on t"e (asis o2 our dri)etrain and 2uel strategy. In t"e ra1idly e91anding 'arkets o2 Asia and %astern %uro1e: risks arise due to go)ern'ent inter)ention in t"e 2or' o2 ta9 increases: 2or e9a'1le: w"ic" could reduce 1ri)ate consu'1tion.

Q!al#"' +#sk
+ustained "ig" de'and in t"e Volkswagen Grou1Is key 'arkets 1oses 1articular c"allenges 2or 5uality assurance. 3uality assurance is o2 2unda'ental i'1ortance es1ecially in t"e growing auto'oti)e 'arkets o2 6razil: Russia: India and $"ina: 2or w"ic" dedicated )e"icles are de)elo1ed and w"ere local 'anu2acturing o1erations and su11liers "a)e (een esta(lis"ed. Volkswagen Grou1 analyse t"e conditions s1eci2ic to eac" 'arket and t"us ensure growt" in t"ese regions. Volkswagen Grou1Is need 2or "ig"-grade su11lier co'1onents o2 i'1ecca(le 5uality is rising due to growing 1roduction )olu'es: increasing co'1le9ity and t"e use o2 t"e Grou1Is toolkit syste'. To ensure 1roduction and "ence 'eet custo'er e91ectations: it is e9tre'ely i'1ortant t"at t"eir own 1lants and t"eir su11liers deli)er on ti'e. T"e introduction o2 an internally-tested risk 'anage'ent syste' at su11liers is an i'1ortant ste1 towards ensuring long-ter' 5uality and su11ly ca1a(ility early on in t"e su11ly c"ain. 3uality assurance t"us "el1s to 2ul2il custo'er e91ectations and conse5uently (oost our $o'1anyIs re1utation: sales 2igures and earnings.

%e+sonnel +#sk
T"e indi)idual skills and tec"nical e91ertise o2 t"eir e'1loyees are a 'aJor 2actor contri(uting to t"e Volkswagen Grou1Is success. T"eir ai' o2 (eco'ing t"e to1 e'1loyer in t"e auto'oti)e industry i'1ro)es VolkswagenIs c"ances o2 recruiting and retaining t"e 'ost talented e'1loyees.

6y continuously e91anding t"eir recruit'ent tools and (oosting training 1rogra's: 1articularly at t"eir international locations: t"ey are a(le to ade5uately address t"e c"allenges 1osed (y growt" on t"e "u'an resources side. T"eir 1rogra' is (ased on t"e tande' 1rinci1le: i.e. knowledge and e91ertise are trans2erred 2ro' 1erson to 1erson. T"ey counter t"e risk t"at knowledge will (e lost as a result o2 e'1loyee 2luctuation and retire'ent wit" intensi)e training. T"ey "a)e also e91anded t"eir (ase o2 senior e91erts in t"e Grou1 to ensure t"at t"e )alua(le knowledge o2 s1ecialists retiring 2ro' Volkswagen is trans2erred to ot"er e'1loyees.

IT +#sk
At Volkswagen: a glo(al co'1any geared towards 2urt"er growt": t"e in2or'ation tec"nology =IT@ used in all di)isions Grou1-wide is assu'ing an increasingly i'1ortant role. IT risks include unaut"orized access to sensiti)e electronic cor1orate data as well as li'ited syste's a)aila(ility as a conse5uence o2 downti'e or natural disasters. Volkswagen Grou1 addresses t"e risk o2 unaut"orized access to cor1orate data (y using 2irewall and intrusion 1re)ention syste's and a dual aut"entication 1rocedure. T"ey ac"ie)e additional 1rotection (y restricting t"e allocation o2 access rig"ts to syste's and in2or'ation and (y kee1ing (acku1 co1ies o2 critical data resources. 7or t"is: t"ey use tec"nical resources t"at "a)e (een tried and tested in t"e 'arket: ad"ering to standards a11lica(le t"roug"out t"e $o'1any. 6y i'1le'enting redundant IT in2rastructures: t"ey 1rotect t"e'sel)es against risks t"at occur in t"e e)ent o2 a syste's 2ailure or natural disaster.

5* S"+a"eg#es Ao+ 2e,g#ng A#nan-#al +#sks

In t"e course o2 t"eir (usiness acti)ities: 2inancial risks 'ay arise 2ro' c"anges in interest rates: e9c"ange rates: raw 'aterials 1rices: or s"are and 2und 1rices. 4anage'ent o2 2inancial and li5uidity risks: is t"e res1onsi(ility o2 t"e central Grou1 Treasury de1art'ent: w"ic" 'ini'izes t"ese risks using nonderi)ati)e and deri)ati)e 2inancial instru'ents. T"e 6oard o2 4anage'ent is in2or'ed o2 t"e current risk situation at regular inter)als. T"ey "edge interest rate risk: w"ere a11ro1riate in co'(ination wit" currency risk: and risks arising 2ro' 2luctuations in t"e )alue o2 2inancial instru'ents (y 'eans o2 interest rate swa1s: cross-currency swa1s and ot"er interest rate contracts wit" 'atc"ing

a'ounts and 'aturity dates. T"is also a11lies to 2inancing arrange'ents wit"in t"e Volkswagen Grou1. 7oreign currency risk is reduced in 1articular t"roug" natural "edging: i.e. (y 2le9i(ly ada1ting t"eir 1roduction ca1acity at t"eir locations around t"e world: esta(lis"ing new 1roduction 2acilities in t"e 'ost i'1ortant currency regions and also 1rocuring a large 1ercentage o2 co'1onents locally: currently 2or instance in India: Russia: t"e H+A: $"ina and 4e9ico. T"ey "edge t"e residual 2oreign currency risk using "edging instru'ents. T"ese include currency 2orwards: currency o1tions and cross-currency swa1s. T"ey use t"ese transactions to li'it t"e currency risk associated wit" 2orecasted cas" 2lows 2ro' o1erating acti)ities and intragrou1 2inancing in currencies ot"er t"an t"e res1ecti)e 2unctional currency. T"e currency 2orwards and currency o1tions can "a)e a ter' o2 u1 to si9 years. T"ey use t"e' to "edge t"eir 1rinci1al 2oreign currency risks associated wit" 2orecasted cas" 2lows: 'ostly against t"e euro and 1ri'arily in H+ dollars: sterling: $"inese ren'in(i: Russian ru(les: +t"eydis" kronor: 4e9ican 1esos: Australian dollars and Lorean won. In 1urc"asing raw 'aterials: risks arise relating to t"e a)aila(ility o2 raw 'aterials and 1rice trends. T"ey li'it t"ese risks 'ainly (y entering into 2orward transactions and swa1s. T"ey "a)e used a11ro1riate contracts to "edge so'e o2 t"eir re5uire'ents 2or co''odities suc" as alu'inu': co11er: lead: 1latinu': r"odiu': 1alladiu' and coal o)er a 1eriod o2 u1 to se)en years. +i'ilar transactions "a)e (een entered into 2or t"e 1ur1ose o2 su11le'enting and i'1ro)ing allocations o2 $&2 e'ission certi2icates. T"ey ensure t"at t"e $o'1any re'ains sol)ent at all ti'es (y "olding su22icient li5uidity reser)es: t"roug" con2ir'ed credit lines and t"roug" t"eir tried-and-tested 'oney 'arket and ca1ital 'arket 1rogra's. $redit lines 2ro' (anks are generally only e)er used wit"in t"e Grou1 to co)er s"ortter' working ca1ital re5uire'ents. ProJects are 2inanced (y: a'ong ot"er t"ings: loans 1ro)ided at 2a)ora(le interest rates (y de)elo1'ent (anks suc" as t"e %uro1ean In)est'ent 6ank =%I6@: t"e International 7inance $or1oration =I7$@ and t"e %uro1ean 6ank 2or Reconstruction and Ce)elo1'ent =%6RC@: or (y national de)elo1'ent (anks suc" as Lreditanstalt 2Yr Diederau2(au =L2D@. T"is e9tensi)e range o2 o1tions 'eans t"at t"e li5uidity risk to t"e Volkswagen Grou1 is e9tre'ely low.

R#sks a+#s#ng A+o< A#nan-#al #ns"+!<en"s 6y di)ersi2ying w"en t"ey in)est e9cess li5uidity and (y entering into 2inancial instru'ents 2or "edging 1ur1oses: t"ey ensure t"at t"e Volkswagen Grou1 re'ains sol)ent at all ti'es: e)en in t"e e)ent o2 a de2ault (y indi)idual counter1arties. L#D!#,#"' +#sks A downgrade o2 t"e $o'1anyIs rating could ad)ersely a22ect t"e ter's attac"ed to t"e Volkswagen Grou1Is (orrowings. In t"e re1orting 1eriod: t"e contri(ution in 2ull o2 Porsc"e AG to t"e Volkswagen Grou1 as o2 August 1: 2-12: t"e increase in t"e e5uity interest in 4AG +% and t"e ac5uisition o2 s1orts 'otorcycle 'anu2acturer Cucati 4otor Bolding resulted in a large out2low o2 li5uidity. Bowe)er: t"e strong 1er2or'ance (y t"e $o'1anyIs o1erating (usiness 'ini'ized t"e i'1act o2 t"ese transactions on its li5uidity 1osition: t"us 'aintaining VolkswagenIs 2inancial sta(ility and 2le9i(ility o)erall: +tandard S PoorIs =+SP@ a22ir'ed t"e Grou1Is e9isting rating and raised its outlook to ;1ositi)e<. 4oodyIs In)estor +er)ice assigned t"e rating a 1ositi)e outlook in t"e 1re)ious year. In2or'ation on t"e ratings o2 Volkswagen AG: Volkswagen 7inancial +er)ices AG and Volkswagen 6ank G'(B can (e 2ound on in c"a1ter Ratings. Res#,!al al!e +#sk #n "2e A#nan-#al se+ #-es 3!s#ness In t"e 2inancial ser)ices (usiness: t"ey agree to (uy (ack selected )e"icles at a residual )alue t"at is 2i9ed at ince1tion o2 t"e contract. Residual )alues are set realistically so t"at t"ey are a(le to le)erage 'arket o11ortunities. T"ey use residual )alue 2orecasts to regularly assess t"e a11ro1riateness o2 t"e 1ro)isions 2or risks and t"e 1otential 2or residual )alue risk. In so doing: t"ey co'1are t"e contractually agreed residual )alues wit" t"e 2air )alues o(taina(le. T"ese are deter'ined utilizing data 2ro' e9ternal ser)ice 1ro)iders and t"eir own 'arketing data. T"ey do not take account o2 t"e u1side in residual 'arket )alues w"en 'aking 1ro)isions 2or risks.

%ART III& %+oA#"a3#l#"' anal's#s

T"e 1ro2ita(ility analysis o2 a co'1any is a class o2 2inancial 'etrics t"at are used to assess a (usiness?s a(ility to generate earnings as co'1ared to its e91enses and ot"er rele)ant costs incurred during a s1eci2ic 1eriod o2 ti'e. In order to o(tain t"is in2or'ation: co'1anies study di22erent ty1es o2 ratios: 'argin ratio: turn o)er ratio: R&%: R&A etc. 7or 'ost o2 t"ese ratios: "a)ing a "ig"er )alue relati)e to a co'1etitor?s ratio or t"e sa'e ratio 2ro' a 1re)ious 1eriod is indicati)e t"at t"e co'1any is doing well.

)* Sales
T"e 'ean o2 Volkswagen sales 2ro' 2--# to 2-12 is ))=);:E;0F. Its standard de)iation is 6)=>0E;0F. It 'eans: t"e sales o2 t"e Grou1 "a)e increased in a 55G;;H.

0* Cos" oA goo,s sol,

T"e costs o2 Volkswagen "a)e a 'ean o2 =506)E50F. Its standard de)iation is 555:6E>5F wit" an increase in a 5)E55H. $o'1aring t"e 1ercentages o2 sales and cost o2 goods sold: we can see t"at t"e 2irst one "as a "ig"er increase t"an t"e second one. +o i2 t"ey donIt "a)e a 1ro1ortional relations"i1.

6* /a+g#n Ra"#o

T"e 4argin is a ratio o2 1ro2ita(ility calculated as net inco'e di)ided (y sales. It 'easures "ow 'uc" o2 e)ery dollar o2 sales a co'1any actually kee1s in earnings. In t"e 1re)ious gra1" it "as (een re1resented t"e 4argin ratios o2 a 2ew co'1anies o2 t"e %urosto99 *- during t"e year 2-11. Gokia is t"e only one w"o o(tained a negati)e 'argin --:-#. and t"e co'1any wit" t"e "ig"est 'argin ratio is GestlN wit" -:140. Volkswagen is t"e t"ird co'1any wit" t"e lowest 'argin ratio: w"ic" 'eans t"at Volkswagen doesnIt kee1 in earnings all w"at t"ey "a)e o(tained t"roug" sales. In ot"er words Volkswagen in)ests t"e 'ost 1art o2 its earnings in new Assets and 1ay di)idends to its s"are"olders.

5* T!+no e+ Ra"#o
T"e turno)er ratio is t"e result o2 di)iding sales (etween total assets. It 'easures "ow 'uc" "as in)ested in assets 2or eac" euro earned t"roug" sales.

53866 6 53966 6 53466 6 53666 6 63766 6 63866 6 63966 6 63466 6 63666 6

!urnov er

Turnover

In 2-11 Volkswagen "as o(tained t"e 2ort" 1osition in ter's o2 turno)er ratio. T"e "ig"est turno)er during t"is 1eriod is 2or Indite9 wit" 1:4 and t"e lowest is 2or I(erdrola

wit" -:## 1oints. +o as Volkwsagen only in)est -: 2. 1oints in Assets t"e rest o2 t"e earnings o(tained wit" sales are destined to di)idends 1ay'ents.

7inally: co'1aring Volkswagen wit" its 'ain co'1etitor w"ic" is 64D: it can (e o(ser)ed t"at 64D "as a "ig"er 'argin and a lower turno)er. +o 2or eac" euro t"at 64D o(tains t"roug" sales kee1s a "ig"er 1ro1ortion in reser)es t"an Volkswagen. And t"ere2ore 64D in)est a lower 1ercentage o2 its earning in sales t"an Volkswagen.

5* Iso@%+oA#"a3#l#"'

636866 636=66 636966 Margin 636<66 636466 636566 636666 6366

"S#$ PR#%"!A&"'"!(
=356>

438= >

437= >

4654 4655 4656 466;

6398 > 6356 6346 63<6 63?6 !urnove r 6396 63=6 6386

Iso-Pro2ita(ility s"ows "ow is co'1osed t"e 1ro2ita(ility o2 a co'1any: "ow 'uc" o2 t"is 1ro2it is due to t"e turno)er and "ow 'uc" is due to t"e 'argin. T"e 1re)ious gra1" s"ows VolkswagenIs e)olution in ter's o2 1ro2ita(ility since 2--0 until 2-12. As it can (e o(ser)ed in t"e gra1" Volkswagen "as ac"ie)ed eac" year a "ig"er and t"ere2ore a (etter 1ro2ita(ility wit" t"e e9ce1tion o2 2-1-. 4oreo)er t"ese c"anges are a conse5uence o2 an increasing turno)er. As it is s"own in t"is ne9t gra1": Volkswagen "as t"e t"ird lowest 1osition co'1ared wit" so'e co'1anies o2 t"e %urosto99*-. T"is is due to its low 'argin and turno)er e91lained (e2ore.

63466

"S#$ PR#%"!A&"'"!(
a:er ASF .e0so" LV*@ *W NoAia Te"e+&ni! a InditeB I2erdro"a

635=6

63566 Margi n

636=6

63666 63666 53=66 C636=6

63=66

53666

Vo"AsDa)en Sie'ens

!urnover

Danone

:* Re"!+n on ED!#"'
T"e Return on %5uity =R&%@ is t"e a'ount o2 net inco'e returned as a 1ercentage o2 s"are"olders e5uity. It 'easures a cor1oration?s 1ro2ita(ility (y re)ealing "ow 'uc" 1ro2it a co'1any generates wit" t"e 'oney s"are"olders "a)e in)ested.

R&% is e91ressed as a 1ercentage and calculated as: Re"!+n on ED!#"' I Ne" In-o<eJS2a+e2ol,e+Ks ED!#"' Re"!+n on ED!#"' I Ne" In-o<eJSales ? SalesJTo"al Asse"s ? To"al Asse"sJED!#"#es Re"!+n on ED!#"' I /a+g#n Ra"#o ? T!+no e+ Ra"#o ? Le e+age Ra"#o 00)0 Get inco'e =#1.12@ %5uity ROE 1*.-.1.2*

Volkswagen R&% "as a 1ositi)e tendency since 2--0 until t"e 'o'ent: wit" t"e e9ce1tion o2 2-1- in w"ic" t"e R&% was o2 1:.,F. $o'1aring Volkswagen wit" t"e rest o2 %urosto99 *- co'1anies: in 2-11 IGCIT%8 "ad t"e "ig"est R&% wit" #-:20F and G&LIA "ad t"e lowest R&% wit" -0:1,F. T"e a)erage in t"at year was a(out 1*F. T"is 'eans t"at Volkswagen "ad a lower R&% t"an t"e a)erage wit" ))E5)H. In ot"er words: s"are"olders would 1ro(a(ly in)est in ot"er co'1anies rat"er t"an in Volkswagen. In 2-12 IGCIT%8 "as ke1t t"e "ead o2 t"e ranking wit" a R&% o2 #1:,*F. T"e a)erage was a(out 1 F: and in t"at case Volkswagen "ad a "ig"est R&% t"an t"e a)erage wit" )>E6)H.

R#)
=36 93= 936 <3= <36 43= 436 53= 536 63= 636 4654 466; 4655 4656 .OE *ar)in .atio Turnover Levera)e .atio

R&% is co'1osed (y t"e 4argin: Turno)er and /e)erage ratios. In t"e 1re)ious gra1" is s"own t"e i'1act o2 eac" o2 t"ese ratios in t"e R&%. +ince 2--0 4argin "as (een 1retty low: causing a )ery low R&% too.

;* Re"!+n on ED!#"' 9EFORE TAXES

T"e Return on %5uities (e2ore ta9es =R&%(t@ discounts t"e 2iscal i'1act on t"e 2inancial 1ro2ita(ility. R&%(t is w"at t"e co'1any generates (e2ore ta9es 2or eac" euro in)ested.

00)0 Interest =#1.12@ $. /ia(ilities Gon-$. /ia(ilities Total lia(ilities L % %5uities /ia(ilitiesOe5uities EV=L-%@O=/IA6O%3@ E!lia(O%5 -:--14, -:--41 ROE3" . . 4 14-0** 22,.10 -:0-F -:40F .1.2* 2:,. 2-4,

+ince 2--0 Volkswagen "as reduced its Return on %5uities (e2ore ta9es alt"oug" 2ro' 2-1- until t"e 'o'ent "as (een increasing. T"is growt" o2 t"e R&%(t is due to t"e 2act t"at t"e $ost o2 $a1ital =L@ "as (een reducing a'ong t"e years. +o w"en L decreases lia(ilitiesOe5uities "a)e a lower i'1act reducing t"e R&A.

%"SCA' "MPAC!
<=366 > <6366 > 4=366 > 46366 > 5=366 > 56366 > =366 > 6366 > 4654 4655 4656 466; 55395 > 5534?>

5;3<5 >

?37; > 543=4 >

5436? > .OE2t .OE

537? >

C637=>

7iscal i'1act is t"e di22erence (etween R&%(t and R&%. In ot"er words: it is t"e ta9es t"at t"e co'1any 1ays 2or eac" euro t"at "as (een in)ested. T"is gra1" s"ows t"e nor'al (e"a)iour o2 t"e di22erence o2 t"ese two )alues: R&% (e2ore ta9es is always

"ig"er t"an R&% a2ter ta9es. Bowe)er: in 2-1- (ot" )alues are 1retty close due to t"e stee1 reduction in t"e sales and t"e conse5uent dro1 o2 t"e net inco'e. ItIs i'1ortant to re'e'(er t"at 2--0 was t"e 2irst year a2ter t"e (urst o2 t"e "ousing (u((le. T"atIs t"e reason w"y es1ecially in t"e 2ollowing year were 'ore reluctant to s1end 'oney in elastic goods.

T"e cost o2 ca1ital and t"e lending sensi(ility o2 creditors "a)e an in)erse relation. D"en t"e (ank sensi(ility increases: it 'eans t"at t"e co'1any is doing a good Jo( and in)estors trust itQ and as a conse5uence t"e cost o2 ca1ital decreases. +o as o(ser)ed in t"e ta(le: t"e sensiti)ity o2 in)estors "as increased signi2icantly since 2--0 until 2-12 =2ro' -:--2 to -:14,@. T"is 2act is due to t"e increase o2 sales during t"ese years. T"ere2ore: t"e cost o2 ca1ital 2or Volkswagen is today 'uc" lower t"an 2our years (e2ore.

=* O4"#<!< 00)0

Volkswagen o1ti'u' 1oint o2 le)erage =lia(ilitiesOe5uities@ is 1-:*, during 2-12 to o(tain t"e 'a9i'u' Return on %5uities (e2ore ta9es.

>* Re"!+n on Asse"s

T"e Return on Assets =R&A@ is an indicator o2 "ow 1ro2ita(le a co'1any is relati)e to its total assets and tells you w"at earnings are generated 2ro' in)ested ca1ital. R&A is e91ressed as a 1ercentage and calculated as: Re"!+n on Asse"s I E9ITJTo"al Asse"s Taking into account t"at %6IT "as to (e 2ro' #1O12 o2 t"e 1re)ious year and Total Assets 2ro' -1O-1 o2 t"e year we are calculating. 00)0 %6IT =#1O12@ Total Assets =-1O-1@ 112,1 #-0 44 ROA In t"e sa'e way t"at R&% "as (een a22ected (y t"e glo(al 2inancial crisis es1ecially in t"e year 2-1-: t"e R&A "as also e91eri'ented an i'1ortant decrease. In t"at year VolkswagenIs R&A was -:0F w"ic" is 1:. 1oints a(o)e t"e a)erage =2:,F@.

63576 63586 63596 63546 63566 63676 63686 63696 63646 63666

*)&! "MPAC!
5534? > 5436?>

?37; >

.OE2t .OA

<389 >

4375> 63;< > 4656

<3=? >

4654

C 4655 637=>

466;

Ce(t i'1act is t"e di22erence (etween R&%(t and R&A. Dit" t"ese gra1" we can see "ow our lia(ilities a22ect our 1ro2its. Dit"out lia(ilities t"e R&% would (e as t"e R&A. +o: t"anks to t"e lia(ilities: wit" less e5uity t"an assets we can o(tain 'ore 1ro2its. It is called le)erage: and it gi)es co'1anies a way to "a)e 'ore 1ro2its. To conclude t"is section: we "a)e seen t"at t"e de(t i'1act in t"e co'1any is 'uc" t"an t"e 2inancial i'1act.

)0* Real TaL Ra"e

T"e real ta9 rate is t"e a)erage rate at w"ic" a co'1any "as its 1re-ta9 1ro2its ta9ed. It is calculated (y di)iding total ta9 e91ense =ta9ation@ (y ta9a(le inco'e =%6T@. 00)0 Ta9ation %6T 2*40# Real "aL +a"e # -.

!a+ation an )&!
<666 6 4=666 46666 5=66 6 5666 6 =666 6 4654 4655 4656 466; TaBation E T

Real ta+ rate

63<66 > 634=6 63466 635=6 63566 636=6 63666 4654 4655 4656 466; .ea" taB rate

As it can (e o(ser)ed in t"e 2irst gra1": t"e %6T "as increased considera(ly since 2--0. +1eci2ically: it "as 'ulti1lied (y itsel2 se)eral ti'es: 2ro' 12 - 'illion to 2*..* 'illion. Bowe)er: t"e ta9 "as increased less t"an 1ro1ortionally: 1er"a1s due to so'e in)est'ent o2 1ro2its in so'et"ing 2ree o2 ta9es: suc" as t"e 2ir' dedication to R S C in ecological cars or in)est'ents t"at t"e state is trying to 1ro'ote. +o as t"e second gra1" s"ows =Real Ta9 Rate@: t"e ta9 rate "as declined since 2--0. %)ery year: Volkswagen is 1aying 2ewer ta9es t"an 1ro1ortionally to its %6T. De "a)e to consider t"at t"ey are 1aying 2ew ta9es due to t"e di'ension and t"e 1ower o2 t"e co'1any. To get an idea o2 "ow 2ew t"ey 1ay is i'1ortant to 'ention t"at 1"ysical 1eo1le 1ay a #-F o2 IRP7 =wit"out taking into account t"e e91enses and de1reciation costs o2 eac" indi)idual@ (esides 1aying a 21F o2 VAT 2or eac" good (oug"t wit" t"e re'aining inco'e.

))* Val!e@A,,e,
Value-Added is w"at e'1loyees contri(ute in t"e co'1any. It is t"e result o2 adding %6ITCA and cost o2 e'1loyees.

%6ITCA $&+T &7 %4P/&Z%%+ Val!e@A,,e, E9ITDAJVal!e@A,,e, +ince 2--0: t"e co'1any "as increased its Value-Added. T"atIs due to t"e growt" o2 t"e co'1any all o)er t"e world in t"e last years in econo'ical =%6ITCA@ and "u'an ter's =cost o2 e'1loyees@.

)&"!*A,Value$A
63=6 6396 63<6 6346 6356 6366 4654 4655 4656 466;

E ITDAEVa"ueCAdded

In order to analyse t"e e)olution o2 t"e 1ro2ita(ility t"at eac" worker adds to t"e co'1any: it "as (een used t"e relation (etween %6ITCA and Value-Added. As it is s"own in t"e ta(le and in t"e gra1": year (y year workers are 'ore 1ro2ita(le 2or t"e co'1any.

)0* ROAE Sol en-' Ra"#o an, Cas2 C'-le

T"e 2ollowing gra1" "el1s to understand t"e analysis and situation o2 grou1. In t"e gra1" we clearly see t"at t"e 2irst year t"e cas" cycle decrease (ut also t"e R&A and in t"e ot"er side t"e sol)ency ratio increased. T"e (est 2or a co'1any is to "a)e a "ig" R&A and sol)ency ratio: and t"e lowest cas" cycle 1ossi(le. +o t"at w"at t"ey are trying: w"en 2inally: in 2-12: t"ey ac"ie)ed t"e goal: reducing t"e cas" cycle as 'uc" as t"ey could. Ge9t ste1 will 1ro(a(ly (e to increase t"e sol)ency: (ut taking care t"e R&A Coes not decrease at t"e sa'e ti'e.

Con-l!s#ons
In conclusion: Volkswagen "as (een a22ected (y t"e 2inancial crisis: (ut at t"e sa'e ti'e "as (een a(le to ada1t its resources and ca1a(ilities to t"e glo(al situation: succeeding 2ro' t"is econo'ical dro1. +o a2ter doing t"is analysis it can (e said t"at is a good co'1any to in)est and we reco''end it 2or se)eral reasons: - It "as a good R&A and is 1ro2ita(le wit" its assets. - It "as a low cas" cycle 1roducing 2aster t"an 'ost o2 its co'1etitors. - It "as a "ig" sol)ency ratios to 2ace long ter' de(ts. - Its lia(ilities allow t"e grou1 to grow (ut wit"out taken too 'uc" risk

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