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Annual Report

Volkswagen Group in China

An automotive success story in the Asia-Pacific region

The Volkswagen Group has been present in China for over 25 years. In fiscal year 2010, the successful Shanghai Volkswagen and FAW Volkswagen joint ventures produced more than 1.9 million vehicles.

BUSINESS DEVELOPMENT

We have a 50% stake in the Shanghai Volkswagen joint venture that was founded in 1984 and a 40% stake in the First Automotive Works (FAW) joint venture in Changchun, which started operating in 1990. Both companies are accounted for using the equity method in the consolidated financial statements.

The importance of the Chinese market for Volkswagen has significantly increased in the past years. The Group now has nine production facilities in China – both vehicle production plants and component plants. Two further vehicle plants are already being planned. As part of its long-term growth strategy, Volkswagen plans to increase production capacity in China in the medium term to around 3 million vehicles each year. By 2015, the Group will have invested a total of €10.6 billion in China. This amount is to be financed entirely by the cash flow from the Chinese joint ventures.

Tiguan (photo)

Tiguan

The Volkswagen Group is represented in the Chinese passenger car market by its Volkswagen Passenger Cars, Audi and Škoda volume brands, and its Lamborghini and Bentley luxury brands. The product range of established Group models is supplemented by vehicles that are produced specially for the Chinese market. These include the Passat New Lingyu, the Lavida and the New Bora.

In fiscal year 2010, the Volkswagen Group delivered 1.9 million vehicles in the Chinese passenger car market, a year-on-year increase of 37.4%. Sales figures for the Volkswagen Passenger Cars brand were 34.1% higher than in 2009 at 1.5 million vehicles. The Audi and Škoda brands increased their deliveries to customers by 43.9% and 47.3% respectively. There was particularly strong demand for the New Bora, Lavida, Passat New Lingyu, Santana, Audi A6 and Škoda Octavia models. Demand for the Tiguan and Audi Q5 models newly launched on the market exceeded expectations. With a market share of 16.8% (16.5%), the Volkswagen Group succeeded in further expanding its leadership of the Chinese market in 2010.

The joint ventures sold a total of 1.9 million locally produced vehicles in the reporting period, 33.9% more than in the previous year.

In fiscal year 2010, the joint ventures produced a total of 1.9 million vehicles, up 37.9% year-on-year.

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VOLKSWAGEN GROUP IN CHINA

 

 

 

 

 

 

 

 

2010

 

2009

 

%

Deliveries (thousand units)

 

1,923

 

1,400

 

+37.4

Vehicle sales

 

1,871

 

1,397

 

+33.9

Production

 

1,914

 

1,388

 

+37.9

1.9 million

VEHICLES DELIVERED TO CUSTOMERS IN CHINA

The joint ventures in China achieved an operating profit (proportionate) of €1.9 billion in fiscal year 2010, up €1.1 billion year-on-year. This increase was mainly a result of an increase in volume, disciplined cost and investment management, and positive exchange rate effects.

The figures for the joint venture companies in China are not included in the Group’s operating result. This is because these companies are accounted for using the equity method and their profits are exclusively allocated to the Group’s financial result on a pro rata basis.

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LOCAL PRODUCTION

 

 

 

 

Vehicles

 

2010

 

2009

Volkswagen Passenger Cars

 

1,506,886

 

1,113,650

Audi

 

209,645

 

142,359

Škoda

 

197,076

 

131,787

Total

 

1,913,607

 

1,387,796

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EARNINGS

 

 

 

 

in € million

 

2010

 

2009

Operating profit (100%)

 

4,389

 

1,892

Operating profit (proportionate)

 

1,907

 

831

Lavida (photo)

Lavida

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