Annual Report

35 Litigation

In fiscal year 2010, the United Kingdom Office of Fair Trading (OFT) started an investigation into Scania, a Volkswagen subsidiary. In fiscal year 2011, Scania also became the subject of an investigation launched by the European Commission concerning alleged inappropriate exchange of information. Besides other truck manufacturers, the EU probe also includes MAN SE, in which Volkswagen holds a 28.67% interest. Such investigations normally take several years. It is still too early to judge whether these investigations pose any risk to Scania or MAN.

In the course of their operating activities, Volkswagen AG and the companies in which it is directly or indirectly invested also become involved in legal disputes and official proceedings in Germany and internationally. In particular, such proceedings may occur in relation to suppliers, dealers, customers, or investors.

For the companies involved, these may result in payment or other obligations. Particularly in cases where US customers assert claims for vehicle defects individually or by way of a class action, highly cost-intensive measures may have to be taken and substantial compensation or punitive damages paid. Corresponding risks also result from US patent infringement proceedings.

Where transparent and economically viable, adequate insurance cover is taken out for these risks and appropriate provisions recognized for the remaining identifiable risks. The Company does not believe, therefore, that these risks will have a sustained effect on the economic position of the Group.

However, as some risks cannot be assessed or can only be assessed to a limited extent, the possibility of loss or damage not being covered by the insured amounts and provisions cannot be ruled out.

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