VOLKSWAGEN GROUP MAKES A GOOD START TO 2014

• First-quarter sales revenue up 2.7 percent year-on-year to EUR 47.8 billion (EUR 46.6 billion)
• Operating profit rises by 0.5 billion to EUR 2.9 billion despite ongoing challenging environment
• Net liquidity in Automotive Division remains high at EUR 17.7 billion

The Volkswagen Group has made a good start to fiscal year 2014 in a market environment that remains difficult. Sales revenue rose by 2.7 percent in the first three months of the year to EUR 47.8 billion (EUR 46.6 billion) despite negative currency effects. Operating profit grew by 21.8 percent to EUR 2.9 billion (EUR 2.3 billion). The Group's operating profit and sales revenue exclude the activities of the Chinese joint ventures, which are accounted for in the financial result using the equity method and is therefore not included in consolidated operating profit. The share of operating profit attributable to the Chinese joint ventures in the first quarter of 2014 was EUR 1.24 billion (EUR 1.16 billion).

The Volkswagen Group's profit before tax amounted to EUR 3.4 billion (EUR 2.7 billion). The return on sales before tax rose from 5.8 percent to 7.0 percent. Profit after tax was EUR 2.5 billion (EUR 1.9 billion). "The Volkswagen Group has established a strong position in recent years. Our good start to the current fiscal year is an additional proof of this. We must now continue improving our position and maintain our successful course as part of the systematic implementation of our Strategy 2018", said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg on Tuesday.

Global demand for passenger cars continued to rise in the first quarter of 2014. However, market trends were mixed at a regional level. The number of new registrations in the Asia-Pacific region, Western Europe, North America and Central Europe increased year-on-year, while the emerging markets in South America and Eastern Europe recorded lower market volumes. The weak currencies of key emerging economies pushed prices up and thus put pressure on demand. "These challenges mean that it is more important than ever that we focus on three key action areas: firstly, disciplined cost and investment management, secondly, our profitability targets and thirdly, improved profitability in all regions", said CFO Hans Dieter Pötsch.

Net liquidity in the Automotive Division remains high

Net liquidity in the Automotive Division amounted to EUR 17.7 billion at the end of March (December 31, 2013: EUR 16.9 billion). Liquidity was reduced by the capital increase in the Financial Services Division, while the successful placement of hybrid notes strengthened the Automotive Division's capital base. Investments in property, plant and equipment (capex) in the Automotive Division remained virtually unchanged at EUR 1.6 billion (EUR 1.7 billion). The Volkswagen Group maintained its disciplined approach to investment with a ratio of capex to sales revenue in the Automotive Division of 3.9 percent (4.1 percent). Investments were made primarily in production facilities and in the models to be launched in 2014 and 2015, as well as in the ecological focus of the model range.

Brands and business fields

The Volkswagen Passenger Cars brand recorded an operating profit of EUR 440 million (EUR 590 million) in the first quarter of 2014. It should be noted that this figure does not include the Chinese joint ventures. Operating profit was negatively impacted by lower sales volumes, negative exchange rate trends especially in South America and Russia and higher upfront investments in new technologies, while lower material costs and improvements in the mix had a positive effect.

AUDI's operating profit was on a level with the prior-year period, at EUR 1.3 billion (EUR 1.3 billion). Operating profit was impacted by high upfront investments in new products and technologies, as well as in the expansion of the international production network.

ŠKODA generated an operating profit of EUR 185 million (EUR 112 million) in the first quarter of 2014, up 65.2 percent on the previous year on the back of volume and mix-related factors.

SEAT's operating loss improved by EUR 10 million to EUR 36 million (EUR 46 million).

BENTLEY's operating profit climbed by 65.7 percent year-on-year to EUR 45 million in the first quarter (EUR 27 million).

Porsche recorded an operating profit of EUR 698 million (EUR 573 million) in the first three months.

At EUR 136 million, Volkswagen Commercial Vehicles more than doubled its operating profit compared with the first quarter of 2013 (EUR 60 million).

Scania posted an operating profit of EUR 254 million (EUR 227 million). MAN generated an operating profit of EUR 68 million (previous year: operating loss of EUR 102 million).

Volkswagen Financial Services recorded an operating profit of EUR 353 million in the first quarter of 2014, on a level with the previous year. The division signed 1.1 million new financing, leasing and service/insurance contracts worldwide (+ 17 percent).

Winterkorn: "We are pursuing the goal of offering all customers the mobility and innovation they need."

The Volkswagen Group is well positioned to deal with the mixed developments in the automotive markets. The Group's strengths include its unique brand portfolio covering almost all segments, from motorcycles through subcompact cars to heavy trucks and buses, its steadily growing presence in all major world markets and its wide range of financial services.

"We offer an extensive range of environmentally friendly, cutting-edge, high-quality vehicles for all markets and customer groups that is unparalleled in the industry", said Winterkorn. The Volkswagen Group will press ahead with its product initiative across all brands in 2014, and modernize and expand its offering by introducing attractive new vehicles. "We are pursuing the goal of offering all customers the mobility and innovation they need, thus sustainably strengthening our competitive position", Winterkorn added.

The Volkswagen Group is expecting a moderate increase in deliveries to customers in fiscal year 2014. Challenges for the Volkswagen Group will come from the difficult market environment and fierce competition, as well as interest rate and exchange rate volatility and fluctuations in raw materials prices. Volkswagen believes that the modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group's cost structure.

Depending on economic conditions, Volkswagen is expecting 2014 sales revenue for the Group and its business areas to move within a range of 3 percent around the prior-year figure. In terms of the Group's operating profit, Volkswagen is forecasting an operating return on sales of between 5.5 percent and 6.5 percent in 2014 in light of the challenging economic environment, and the same range for the Passenger Cars Business Area. The Group expects the Commercial Vehicles/Power Engineering Business Area to moderately exceed the 2013 figure. Volkswagen anticipates an operating return on sales of between 8.0 percent and 9.0 percent in the Financial Services Division.

The complete interim report is published on our website:
http://www.volkswagenag.com/ir/Q1_2014_e.pdf

January – March	2014	2013	%
Volume Data
Deliveries to customers ('000 units)	2,442	2,314	+ 5.6
Vehicle sales ('000 units)	2,562	2,375	+ 7.9
Production ('000 units)	2,565	2,388	+ 7.4
Employees (Mar. 31/Dec. 31)	574,900	572,800	+ 0.4
Financial Data (IFRSs), EUR million
Sales revenue	47,831	46,565	+ 2.7
Operating profit	2,855	2,344	+ 21.8
as a percentage of sales revenue	6.0	5.0
Profit before tax	3,357	2,688	+ 24.9
Profit after tax	2,468	1,946	+ 26.8
Automotive Division
Cash flows from operating activities	2,251	3,528	- 36.2
Cash flows from investing activities attributable to operating activities	2,302	3,942	- 41.6
of which: acquisition of property, plant and equipment	1,625	1,672	- 2.8
as a percentage of sales revenue	3.9	4.1
Net liquidity at Mar. 31	17,714	10,649	+ 66.3
Net liquidity at Mar. 31/Dec. 31	17,714	16,869	+ 5.0