China: The second home market of the Volkswagen Group

China: The second home market of the Volkswagen Group Carsten Isensee Executive Vice President Finance, Volkswagen Group China HSBC Roadshow, Hongkong, 24-25 November 2014

Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 2

Volkswagen Group China (VGC) at a glance Volkswagen production facilities in China Facts 2014 Shanghai Volkswagen Urumqi FAW-Volkswagen Volkswagen FAW Platform Volkswagen China Investment Company Chengdu Car production plants Component plants Headquarters Volkswagen Group China Volkswagen FAW Engine Beijing Dalian Yizheng Nanjing Changzhou Shanghai Ningbo Foshan Tianjin FAW-Volkswagen Volkswagen FAW Platform Changchun FAW-Volkswagen (Volkswagen, Audi) Volkswagen FAW Platform Volkswagen Automatic Transmission Dalian Volkswagen FAW Engine Volkswagen Automatic Transmission Tianjin Shanghai Volkswagen MAN Diesel & Turbo Shanghai Volkswagen (Volkswagen, ŠKODA) Shanghai Volkswagen Volkswagen Transmission Shanghai Volkswagen Powertrain Volkswagen Group ventured into China more than 30 years ago Over 20 million cars delivered to Chinese customers since market entry 89,000 employees work for the Volkswagen Group in China Another 360,000 employees work within our dealer network Volkswagen Group China is represented by more than 40 entities in China People are the center of Volkswagen Group China s strategy Ren Wei Ben. 3

Deliveries to customers Volkswagen Group in China (January October 2014) Import FBU ( 000 units) Volkswagen Group: 184 FAW-VW Locally produced ( 000 units) 1,433 SVW 1,409 Ʃ 2,842 Total deliveries region China 3,026 1) 1) incl. Hong Kong, excl. Scania, and Ducati. All figures shown are rounded. 4

Deliveries to customers by brand (January October 2014) `000 units 3,000 +14.1% 2,652 3,026 +13.8% January October 2013 January October 2014 2,500 2,000 2,018 2,296 With a solid sales performance year-to-date all brands contributed to the strong growth of Volkswagen Group China 1,500 1,000 500 0 399 +16.1% 464 199 +12.4% 224 30 +18.5% 36 1) incl. Hong Kong, excl. Scania, and Ducati. 5

Volkswagen Group No. 1 in the Chinese passenger vehicle market Passenger vehicle market China (January - October 2014 y-t-d) Others (i.e. local brands) 30% 21% Volkswagen Group Rank Brand/Group Delta of market share (y-t-d) 10% Comp.1 1 Volkswagen Group + 0.3% 2 Competitor 1-0.3% 10% 3 Competitor 2-0.1% 5% 5% Comp.2 4 Competitor 3 +/- 0.0% Comp.4 Comp.3 5 Competitor 4-0.6% 6

6 out of the Top 10 selling vehicles are Volkswagen brand models Deliveries to customers (January October 2014) 1 Lavida 311,295 vehicles 5 Jetta 247,297 vehicles 2 Santana 266,138 vehicles 9 Tiguan 197,954 vehicles 4 Sagitar 250,184 vehicles 10 New Bora 192,076 vehicles Source: CPCA 7

Audi in China Enhancing leadership in the premium segment Flexible capacity expansion, adjusted to market demand Leading the premium SUV market in China Annual production capacity, vehicles up to 700,000 SUV share of the premium market Comparison of growth rates 100,000 200,000 Production 400,000 Production 2008 2010 2013 2017 SUV 18% 82% 38% 62% 40% 35% 30% 25% 20% 15% +22% +30% +36% Pioneering the compact segment with three locally produced models 2008 Jan-Sep 2014 10% 5% 0% Jan-Sep 2014 Premium Market SUV Premium Market Audi SUV Audi Q3 Segment leader 50% market share (Jan-Jul 2014) Audi A3 Sedan 1st local premium compact sedan launched early September 2014 Audi A3 Sportback 1st local premium compact hatchback launched in March 2014 8

China has become the most important sales market for ŠKODA Further volume expansion of ŠKODA within the next years Developing the model range in China Annual deliveries to customers > 500,000 Spaceback 226,971 Rapid Rapid 27,000 Yeti Yeti Others 2007 38% 2013 2018 ŠKODA Top 5 markets 1991 vs. 2013 1991 2013 34% Czech Republic 5% 9% 6% 8% UK Slovak Republic Poland Germany Others Czech Republic 37% 6% 7% 10% Germany UK 25% 15% China Russia Import Local Production Octavia Octavia Octavia Octavia Octavia Octavia Octavia Octavia 2007 Fabia Fabia Fabia Fabia Fabia Fabia Fabia Current Models Superb Superb Superb Superb Superb Superb 2008 2009 2010 2011 2012 2013 2014 New Models Superb Combi Yeti Superb Combi Yeti 9

Porsche is gaining substantial momentum in China Deliveries to customers (in units) +15% 31,205 37,425 2,603 1,418 24,340 1,149 949 6,738 2,402 929 9,148 7,726 26,666 19,959 13,283 2011 2012 2013 Cayenne Panamera 911 Boxster/Cayman Dealerships (number of dealers) CAGR SUV Sports Car Macan launch in China: Q3 2014 Increasing model variety and improving customer experience Flagship Sports Car Initiative China Porsche Experience Center Shanghai CAGR +16% Focus 2014: 40 51 63 Pro-active sports car market development and exploitation with 911 and Boxster/Cayman 2011 2012 2013 10

Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 11

China continues to offer substantial growth potential Real GDP growth in % 12 10 Bubble size: real GDP 2013 data unless otherwise stated 8 6 4 2 0-2 India China Brazil China 2020 Russia China 2030 Japan Germany 0 10 20 30 40 50 60 USA Real GDP per capita in `000 USD PPP Source: IHS Economics 12

Continued positive economic development and the increase in household income drives private consumption on a solid growth path in USD bn % 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Private Consumption, China (left scale) Private Consumption Growth Rate, China (right scale) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 Source: IHS Economics 13

Traffic restrictions reduce local deliveries, however, rumors on future restrictions lead to front loading of car sales Cities with either restriction policy in place or rumors on future restrictions Deliveries in cities with or without restrictions 1) Cities restricted Cities with restriction rumors Beijing (2011) Tianjin(2014) Dalian Shijiazhuang Qingdao Lanzhou Nanjing Shanghai (1994) Xi an Zhengzhou Suzhou Chengdu Chongqing Wuhan Hangzhou (2014) Ningbo Dongguan Foshan Shenzhen Guangzhou (2012) in 000 units 11,297 2,376 2,376 1,246 7,675 7,675 +12.4% 12,699 3,111 1,042 8,546 w/ Rumors (15 cities) Restricted (6 cities) Not restricted (326 cities) Growth (y-o-y) 30.9% -16.3% 11.3% Guiyang (2011) Remark: Restricted cities include Beijing, Shanghai, Guangzhou, Tianjin, Hangzhou, Guiyang; 15 cities w/ rumors include Chengdu, Chongqing, Dalian, Dongguan, Foshan, Lanzhou, Nanjing, Ningbo, Qingdao, Shenzhen, Shijiazhuang, Suzhou, Wuhan, Xi an, Zhengzhou Jan - Sep 2013 Jan - Sep 2014 1) converted to deliveries to customers from registration data Source: Registration data, CPCA 14

Less developed cities provide new opportunities Level I cities Level II cities Share of total market ᴓ cars/1,000 inhabitants Number of cities Average # of inhabitants (m) ᴓ cars/1,000 inhabitants Number of cities Average # of inhabitants (m) ᴓ Beijing Shanghai Guangzhou 119 Dalian Xi an Changsha 9 26 16.7 8.4 Level III cities Level IV cities Level V cities Shantou Hengshui Jingdezhen 62 Guyuan Yaan Zigong 68 109 4.8 4.0 95 Haibei Jinchang Turpan 29 25 135 1.8 Level III, IV and V cities Level I and II cities Level I share 41% 2014e Level III share Level V share 59% 2014e 37% 2015e 63% 2015e Level II share 35% 2016e 65% 2016e 34% 2017e Level IV share 66% 2017e 33% 2018e 67% 2018e 15

China will invest further in the construction of road infrastructure Length of national roads in China ( 000 km) National Road Network Construction Plan National expressways National ordinary roads 265 Urgent need to expand the current road network: 106 +84% 118 +150% more than 900 counties 1) in China are not connected to the national road network more than 18 cities with >200,000 population and 29 regional administrative centers are not connected to expressways 64 2011 2030 The Central Government Plan: By 2030, all cities above 200,000 inhabitants will be connected to the national expressway network, and all counties will be connected to the national ordinary road network Source: National Road Network Construction Plan (2013-2030) 1) There are 2,856 counties in China 16

Southern and Western regions show above average growth supporting our Go South and Go West Strategy Regional share of total market sales (Q3 2013 vs. Q3 2014 in %) Western region 21% 22% Q3 2013 Q3 2014 Xinjiang Tibet Qinghai Sichuan Yunnan Gansu Ningxia Inner Mongolia Beijing Tianjin Hebei Shaanxi Chongqing Guizhou Guangxi Shanxi Henan Hubei Hunan Jiangxi Fujian Guangdong Shandong Anhui Liaoning Jiangsu Zhejiang Heilongjiang Northern region Eastern region Southern region Jilin Shanghai 35% Q3 2013 23% Q3 2013 22% Q3 2013 35% Q3 2014 23% Q3 2014 20% Q3 2014 Hainan Source: Registration data 17

How big will the Chinese passenger vehicle market be in 2020? in m vehicles 38 33 28 Forecast 10% growth in 2014e: ~ 17.5 m vehicles Scenario CAGR 10% 32 m vehicles p.a. 23 18 2013: 15.9 m vehicles Scenario CAGR 5% 25 m vehicles p.a. 13 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Volkswagen Group China scenario calculation 18

Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 19

Investment program and core projects Scenario CAGR 5%: >20 m passenger vehicles Vehicle plants Total investment of 18.2 bn 1) in 2014-2018 Component plants Products 2011 2012 2013 2014 2015 2016 Assuming a 5% CAGR and a 20% market share of VGC the additional annual sales volume 1 m 200,000 would imply a need of 2 new factories every 3 years New plant Changsha (SVW) Capacity increase Foshan (FAW-VW) Chengdu (FAW-VW) Capacity increase Changchun Chengdu Tianjin Dalian CO 2 measures for plants and products PHEV products MQB products Total market Volkswagen Group China 1) Status as per press release 22 November 2013 20

Go West and Go South strategies are core drivers for future growth Urumqi Changchun Go West Strategy Beijing Tianjin Qingdao Chengdu Yizheng Nanjing Shanghai Go South Strategy Changsha Ningbo Foshan Existing vehicle production site Planned vehicle production site 21

Capacity expansion plans on the way to 4 million units in 2018 (Standard capacity of 250 working days) 4 million units 3.135 m Upward flexibility Urumqi Ningbo Yizheng Nanjing Shanghai Foshan Chengdu Changsha Urumqi Ningbo Yizheng Nanjing Shanghai Foshan Chengdu Changsha Urumqi Ningbo Yizheng Nanjing Shanghai Foshan Chengdu SVW FAW-VW Changchun Changchun Changchun 2013 Production 2013 Capacity 2015 Capacity 2018 Capacity 1) Capacity expansion plans are based on the expected growth in unit sales, upward flexibility (e.g. additional working days) and downward flexibility (e.g. postponement of expansion steps). 1) As per 12/2013; the new vehicle plants planned in Qingdao and Tianjin are not included in the chart (planned start of production in 2017/18) 22

Implementation of the MQB toolkit in the Chinese production network Urumqi Beijing Changchun MQB & MLB share of Volkswagen Group production Chengdu Tianjing Qingdao Yizheng Nanjing Shanghai Changsha Ningbo Foshan Existing production site MQB production site by 2016 Planned MQB production site 2012 2013 2014 2015 2016 MQB MLB MQB volume China Golf A3 SB A3 Octavia Lamando Implementation of MQB in the Chinese production network will significantly reduce investments for new models 23

Significant growth of dealer networks planned 1) 31 Xinjiang 6 Tibet [as of H1 2014] 45 Heilongjiang 41 Jilin 60 106 94 Gansu Inner Mongolia Liaoning 28 Beijing 43 11 15 136 Tianjin Qinghai Ningxia 71 Hebei 216 Shanxi Shandong Shaanxi 114 68 248 107 Henan 72 Jiangsu Sichuan 30 67 Shanghai Hubei Anhui 91 Chongqing Zhejiang 34 Hunan 46 217 60 71 Guizhou Jiangxi Fujian Yunnan Guangxi 71 32 Guangdong 151 10 Hainan 2,395 320 341 1,593 ~2,750 >3,600 2013 2014e 2018e 1) Map includes only Volkswagen, Audi and ŠKODA dealers; discrepancies may occur due to reporting backlog 24

Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 25

Broad local product portfolio at FAW-Volkswagen and SVW New Bora Sagitar Magotan Jetta Gran Lavida Santana Passat Tiguan Volkswagen CC Golf Volkswagen Polo Touran Lavida Lamando A4L A6L Q3 Q5 Yeti Fabia Superb Octavia Audi A3 SB A3 ŠKODA Rapid Rapid SB Note: Status as per July 2014 26

Model launches in 2014: Continuously strong product momentum New locally produced models New import models e-up! Golf Variant Scirocco T5 Caravelle A3 A3 Sportback SVW Polo Rapid Spaceback S3 RS7 A8L S8 A8 Hybrid Cross Polo Octavia Macan Cayenne Cayenne GTS Cayman GTS Boxster GTS 918 Spyder FAW-VW Flying Spur V8 Continental GT V8S Cont. GT Conv. V8S Huracán A3 Sportback A3 27

Significant extension of product portfolio planned: More than 100 models by 2018 2013: CKD 22 FBU 41 63 2018e: CKD >35 FBU>65 >100 Note: number of models including derivatives 28

SUVs are already the second largest body type in the Chinese market and the growth is expected to continue 2012-2014 body type market share 2020 2024 % Notchback Hatchback MPV SUV Others 63,2 63.2 61,6 61.6 59,9 59.9 53.4 52.5 13.1 13.3 12,3 12,3 12.3 14,3 14.3 4.6 4.6 4.1 4.1 4.3 17,5 17.7 21,5 21.5 23,0 23.0 28.0 28.7 0.7 0.5 0.7 0.9 0.9 2012 2013 2014e 2020e 2024e Source: Volkswagen Group China, % share of body type in total passenger car market 29

Volkswagen China Product solutions to match our customers needs China special detail solutions Passat USA Passat China China specific wheelbase extensions, trim and colors A6 Europe Yeti Europe A6 L China Yeti China China exclusive spare wheel 30

Toolkits support the localisation of of our products Platform Extended Wheel Base Lamando Exterior Interior Chrome Leather Wood Lighting Color 31

Legal requirements of average fuel consumption targets for fleets in China l/100 km 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 0 7.5 6.9l 164g CO 2 /km 120g CO 2 /km 4.8l 1) 5.0l 2012 2013 2014 2015 2016 2017 2018 2019 2020 95g CO 2 /km 3.8l 1) The Chinese target is challenging due to the low proportion of diesel cars in China of only ~1% customers preference for larger vehicles Published data Assumptions of the Volkswagen Group 1) Committed EU targets of the Volkswagen Group 32

Volkswagen Group China to actively engage in the New Energy Vehicle market with locally produced cars as well as the localization of technology Timing 2013 20132016 2016 2020 Introduction Porsche Panamera S E-Hybrid Volkswagen e-up! Audi A6 e-tron Porsche 918 Spyder Audi A3 e-tron e-golf Golf GTE Phase Development Import Local production Localization of New Electric Vehicle technology 33

Expansion of Research & Development know-how in China ~ 2,700 engineers in R&D in China Design Engine development Body development Electric & Electronics development Prototype workshops Vehicle testing facilities 3D development environments 34

Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 35

Car park development of Volkswagen Group China shows substantial opportunities for growth in the service and spare parts businesses Car park of Volkswagen Group China brands Age segmentation of car park 2014 in m units >48 5-8 years 20% 8-10 years 10% >10-15 years 5% 1-2 years 39% 3-4 years 26% 7.0 8.6 10.2 12.4 15.1 Age segmentation of car park 2023 8-10 years 19% >10-15 years 11% 1-2 years 22% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Car park covers all Volkswagen Group brands (only luxury car park does not use scrapping rate) Definition: Car park 2014 is car park as at 31 Dec 2013 5-8 years 27% 3-4 years 21% Car park will grow approx. 2 times by 2018 and 3 times by 2023 compared to 2014 36

Development of pre-owned car dealer business Total pre-owned car market forecast 1) Group pre-owned car dealer roll-out in m units 4.3 2.7 Pre-Owned Commercial Vehicles Pre-Owned Passenger Cars 4.8 3.1 5.1 3.5 6.5 4.8 8.7 6.3 10.6 7.2 12.4 8.4 14.0 9.5 16.0 10.3 18.2 10.9 182 304 285 330 11 20 in `000 units 1 4 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2013 2014e 2013 2014e 2013 2014e 2013 2014e Volkswagen + ŠKODA (Das WeltAuto) Audi (refined recomm.) Porsche (approved pre-owned) Bentley (Bentley pre-owned) Qualitative and quantitative roll-out of group pre-owned car dealers 37

Volkswagen Financial Services is further growing its business Gaining share in an expanding retail financing market Volkswagen Finance (China) retail finance penetration in the Volkswagen Group China network (% of deliveries to customers) 2007 09/2014 2018e Strong retail finance development New retail finance contracts (number of units) 390,000 Cash Finance Cash Finance Cash Finance 90% 73% 67% 227,000 10% 27% 33% 149,000 8% 16% 18% 78,000 2% 11% 15% VW FS Others VW FS Others VW FS Others 2011 2012 2013 2014e Financial Services China: Strategic growth dimensions Leasing / Credits Fleet Management Used Cars New Mobility After Sales / Insurance 38

Another strong operating result from January to September 2014 2010 2011 2012 2013 Q1-Q3 2014 Deliveries to Customers ( 000 Units) 1,923 2,259 2,815 3,271 2,719 Production (100%) 1) ( 000 Units) 1,914 2,202 2,643 3,135 2,615 1) SVW Group / FAW-VW Group Operating profit (100%) ( m) 4,389 6,134 8,424 9,569 9,061 Operating profit (proportionate) ( m) 1,907 2,616 3,678 4,296 3,920 39

Chinese Joint Ventures generate substantial, self-funded growth and at the same time sustainably rising dividends Total amount of dividends paid out to Joint Venture partners (in bn) Total amount of dividend Chinese Joint Ventures thereof paid to Volkswagen Group 6.5 4.6 2.8 2.8 0.7 0.8 0.3 0.4 1.8 0.8 1.2 2.0 2008 2009 2010 2011 2012 2013 40

Volkswagen Group China is well positioned to maintain its number one position in the market and seize additional opportunities in the future 4.0 3.5 in m units 3.0 2.5 2.0 1.5 1.0 0.5 0.0 41