Volkswagen / Porsche SE

Equity Research Quick Bite Sector 24 January 2014 Volkswagen / Porsche SE VW s consensus undershoots Momentum turns around Based on its 2014E P/E ratio, VW is the cheapest DAX-company overall and, together with Renault, the cheapest European OEM and we have an idea why that is: consensus fell by a spectacular 25% in the last 16 months, providing an ongoing drag on performance. We believe we have now arrived at the inflection point, as registrations recover, order intake picks up and prices stabilise. We slightly lower our 2014 estimates and slightly increase our 2015 estimates now we find ourselves above consensus for the first time in a while. Our target prices moves from 205 to 235 and we reiterate our Buy rating on VW. Due to the increased target price we increase our fair value for Porsche from 70 to 85. With the limited upside from the current levels we cut our rating on Porsche SE from Buy to Hold. VW Buy TP 235 (from 205) CP 198.25 Porsche Hold (from Buy) TP 85 (from 70) CP 78.54 (Close 23 January 2014) VW underperformed as consensus declined VW shares increased by 18.6% in 2013, underperforming Daimler by 32%-points and PSA by 45%-points. How can the market ignore the cheapest German DAX company so much? The reason is negative momentum: at the beginning of 2013 we had 85% Buy ratings and no Sell rating and consensus earnings had to decline by 25% from 17bn to slightly below 13bn. The decline in estimates was mainly driven by a weaker European market, especially as German demand missed expectations. but consensus is getting to its inflection point We expect the decline in earnings expectations to bottom out at the level c. 13bn. We met with OEMs and suppliers at our New York conference in January and we see rising evidence that Europe is turning around. This is reflected in pricing data and order intake (reported by German Industry Association VDA). Representing an estimated 65% of Group earnings, Europe has a very significant impact on VW s P&L. We believe consensus assumes over a 1bn negative price effect in 2014 year on year. Should Europe stabilise we rather expect a neutral pricing effect. Adjusting estimates Our own estimates are lagging consensus: We lower our 2014 EBIT estimates from 13.8bn to 13.2bn due to lower volumes and less positive contributions from MQB (we are shifting some 300m from 2014 to 2015). However, following the significant fall in expectations in the past months we now find ourselves above market expectations. For 2015 our EBIT estimates slightly increase to 15.3bn. Momentum turning positive Valuation might be useless when momentum is negative. VW s valuation is highly attractive and we see momentum now turning positive. Accordingly, we believe current levels are good entry levels. Based on increased peer multiples we increase our target price from 205 to 235. This implies a target 2015E P/E ratio of 8.7x. If we were to assume a 6% EBIT margin for VW brand, 10% for Audi we would arrive at 31 EPS for 2015E. Using Toyota s P/E ratio would yield a fair value of 300. Porsche: downgrade to Neutral We use our increased fair value for VW in our sum-ofthe-parts valuation for Porsche and we lower the assumed litigation risk from 4.5bn to 3.5bn: our target price moves from 70 to 85. Given the limited upside we downgrade our rating to Hold from Buy. Porsche remains an attractive access to VW, however, the spread to NAV has decreased substantially, the current share price implies c. 1.7bn litigation cost. Key valuation data 2011 2012 2013E 2014E 2015E VW EV/EBITDA (x) 1.5 1.8 3.4 3.1 2.6 EV/EBITA (x) 2.5 3.4 6.6 5.8 5.7 P/E (x) 3.7 3.0 10.5 9.1 7.5 Porsche EV/EBITDA (x) n.m. n.m. n.m. n.a. n.a. EV/EBITA (x) n.m. n.m. n.m. n.a. n.a. P/E (x) 7.0 29.7 9.9 7.5 6.2 Source: Company, Commerzbank Corporates & Markets Analyst Daniel Schwarz, CFA +49 69 136 28641 daniel.schwarz@commerzbank.com Analyst Sascha Gommel +49 69 136 47287 sascha.gommel@commerzbank.com research.commerzbank.com For important disclosure information please see pages 14 and 15.

Key investment thesis on VW The key thesis of this report is: VW shares performed poorly in 2013 due to falling consensus estimates (see page 2) and consensus declined because the European market was weaker than anticipated by most (see page 3) and pricing, interest rates, base effect, order intake, feedback from suppliers imply: Europe now starts turning around after six years of decline (see pages 3-5) No 2013-like shock to consensus: expectations seem better managed this time, they already declined 25% BEFORE management provides a guidance (see page 6) On page 7 we adjust our estimates and find out: consensus finally undershoots Conclusion: As consensus bottoms out, momentum turns positive and VW should catchup to European peers. We see no reason why VW should trade at the lowest P/E ratio among European peers, with a significant discount to suppliers and the lowest multiple in the DAX. VW performed poorly because consensus declined In 2013, VW was the weakest performer (together with BMW) among European peers, VW underperformed Daimler by 32%-points and PSA by 45%-points (surely we should not forget the share doubled in 2010 and increased 55% in 2012). Valuation is not the issue: the weaker performance in 2013 was despite VW being the cheapest DAX company overall (even some 8% discount to the second cheapest and post the 25% consensus correction) and together with Renault it trades on the lowest 2014E P/E ratio in Europe. TABLE 1: 12-month share price performance OEMs Perf. 1Y Driver in 2013 BMW 14,8% Flat earnings, model cycle peaked Daimler 46,6% Model cycle and rising estimates Volkswagen (pref.) 14,8% Falling consensus estimates Porsche (pref.) 25,6% Reduced legal risks Fiat 66,0% Corporate action Renault 54,8% Excellent Dacia business and Nissan performance Peugeot 59,7% Restructuring action and reduced financing cost estimates, Bloomberg The reason for the underperformance is easy to identify: the 2014 EBIT consensus declined from above 17bn in September 2012 to c. 13.2bn. Adjusting for outdated estimates, the market expectations for 2014 EBIT seem to be even more cautious just below the 13bn mark. The share cannot perform against a 25% decline in expectations. The annoying thing for VW shareholders in 2013 was: even at 13bn the valuation is cheap. 2 24 January 2014

CHART 1: Consensus estimates, Commerzbank s new & old EBIT forecast 18500 17500 16500 15500 14500 13500 12500 2/28/2012 3/28/2012 4/28/2012 5/28/2012 6/28/2012 7/28/2012 8/28/2012 9/28/2012 10/28/2012 11/28/2012 12/28/2012 1/28/2013 2/28/2013 3/28/2013 4/28/2013 5/28/2013 6/28/2013 7/28/2013 8/28/2013 9/28/2013 10/28/2013 11/28/2013 12/28/2013 Yr 14 EBIT Estimate CBKe old CBKe new Source: Bloomberg consensus declined because Europe was weak The more relevant question is what caused the massive decline in expectations? We think a combination of several factors, e.g. the cost savings from MQB are a fine source for confusion: VW guides for 20% unit cost savings, but it is unclear on what percentage of parts of the car this applies and how this compares to cost savings on new models in the past. We reduce our assumptions for MQB cost savings in 2014 by some 300m (please see our EBIT bridge on page 6). Second, markets are to blame: in China Japanese competitors came back after they lost share in 2012, in Brazil pricing deteriorated and, most importantly, Europe declined for a sixth year in a row. Within Europe, Germany in particular was a massive negative surprise, despite a moderate 0.4% GDP growth, record high employment rates and record low interest rates, new light vehicles registrations declined by 3.8% year on year to 3.2m units. VW sells 42% of its vehicles in Europe. We estimate that VW generates some 65% of group pretax profit in Europe, a large part of that in Germany, given a rich mix, a high portion of financing and leasing and higher ASPs. Accordingly, the surprising weakness (Germany missed the forecasts by the VDA, LMC and Commerzbank, VW was guiding for a weaker German market right from the beginning of the year) explains a large part of the correction we have seen in the consensus, accompanied by a cautious guidance (that unfortunately turned out to be right). and Europe eventually turns around If we had to pick one key message for the automotive sector from Commerzbank s GIS in New York in mid-january: the European market is about to recover. Wow big deal! you might say this is highly anticipated and consensus view. However, after six years of falling volumes, increasing discounts we believe this will be the dominant theme in 2014. If we know when consensus turns positive, we know when VW starts outperforming the sector. Consensus turns positive when confidence in the European market rises. Including December we have seen four months with positive year-on-year growth rates. 24 January 2014 3

CHART 2: European car registrations adj. for selling days CHART 3: LTM European car registrations 8% 6% 4,6% 5,7% 7,1% Millionen 17 16 4% 16 2% 15 --% 0,4% 0,5% 15 (2%) (1,6%) (0,6%) 14 (4%) 14 (6%) (5,7%) (6,0%) (5,9%) (8%) (7,9%) (8,5%) (10%) Jan 13 Feb 13 Mrz 13 Apr 13 Mai 13 Jun 13 Jul 13 Aug 13 Sep 13 Okt 13 Nov 13 Dez 13 13 13 12 12 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13, ACEA, ACEA What will happen in the coming three months? Consensus now expects small growth for Europe (we are at 3.5%, slightly above consensus we believe, LMC is at 2.8%). Given the low basis and accelerating momentum, the growth rates in the coming months might look much better than this. Especially in January to May, Europe is running against a very favourable low basis (see Chart 2). We believe that enthusiasm for exposure to Europe will continue to rise in the coming months, and VW should benefit from this. We are forecasting 3.5% growth for Europe. This is slightly above consensus estimates of around 2%. For our detailed volume estimates please see the appendix of this report on page 13. As a basis for our forecast we use our economists expectations for growth. Real GDP in the Eurozone is expected to grow by 0.9%, following a 0.4% contraction in 2013. In Germany, the largest vehicles market, GDP growth is expected to increase from 0.4% to 1.7%, in France from 0.2% to 0.5%. Used car prices started to increase recently in Germany. The more expensive used car prices are getting, the more willing consumers become to buy new cars. CHART 4: : Used car prices work fine as a leading indicator for new car sales Thousands 17 8% 17 16 16 15 15 (5.8%) (6.5%) (6.4%) (5.7%) (4.7%) (4.3%) (4.0%) (3.2%) (0.7%) 0.9% 2.6% 3.0% 3.9% 5.2% 5.3% 5.2% 4.7% 4.1% 3.4% 2.9% 1.9% (0.3%) 0.0% 0.7% 1.5% 0.1% 0.2% (0.1%) (0.1%) (0.5%) (0.7%) (0.2%) (0.7%) 0.9% 0.8% 0.1% (1.1%) (0.1%) (1.2%) (1.4%) (2.1%) (1.6%) (0.4%) 0.6% 2.1% 2.1% 6% 4% 2% 0% (2%) (4%) (6%) (8%) 14 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 (10%) Growth y/y Used car index (AGPI) Source: Autoscout24 4 24 January 2014

Pricing deteriorated again in 2013 as it should with declining sales volumes and over-capacity. However, we cannot see deterioration in VW s pricing in recent months. To receive data on pricing in Europe we are tracking the offers for some 65 cars from eight large online-dealers in Germany, UK and France on a monthly basis. The discounts provided in Graph 5 are the best offer for the respective cars without additional options. CHART 5: Pricing for VW brand in Germany, UK, France 23% 21% 19% 17% 15% 13% 11% 9% 7% 5% Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Germany (Ø discount) UK (Ø discount) France (Ø discount) The chart implies that pricing should not provide an additional headwind in 2014 year on year. We believe consensus expectations for VW include another over 1bn headwind from pricing. Based on current developments and our expectation of stabilising demand in Europe we expect neutral pricing in our EBIT bridge. This might look like a bold assumption, following several years of price declines. However, volumes stabilise and some capacity is leaving the European market in the course of 2014. Accordingly, capacity utilisation should increase in the course of 2014, supporting the pricing discipline among OEMs. Lessons from 2013 expectations seem to be better managed this time VW investors will well remember what happened in 2013. On 22 February VW provided a bearish outlook for 2013 that was some 17% below market expectations at that time. At the analyst meeting later in March, management did not suggest that guidance was conservative but highlighted headwinds for the industry in 2013. CHART 6: 2013 EBIT consensus was not prepared for management s cautious guidance 15000 14500 14000 13500 13000 12500 12000 11500 11000 Yr 13 EBIT Estimates Q4 press release and 2013 guidance 1/15/2012 3/15/2012 5/15/2012 7/15/2012 9/15/2012 11/15/2012 1/15/2013 3/15/2013 5/15/2013 7/15/2013 9/15/2013 11/15/2013 1/15/2014 Source: Bloomberg Could we face a similar situation in 2014? We think the risk for a similar disappointment is limited. First, expectations seem to be better managed. Before the Q4 2012 release, expectations decreased some 5% from peak levels and had to decrease another 17% thereafter. 24 January 2014 5

However, before the release of Q4 2013 results, consensus had already decreased by 25%. And according to our estimates, there is more upside than downside from here. CHART 7: 2014 EBIT consensus already declined sufficiently 17500 17000 16500 16000 15500 15000 14500 14000 13500 13000 12500 Yr 14 EBIT Estimates Q4 press release and 2014 guidance 2/28/2012 4/28/2012 6/28/2012 8/28/2012 10/28/2012 12/28/2012 2/28/2013 4/28/2013 6/28/2013 8/28/2013 10/28/2013 12/28/2013 2/28/2014 Source: Bloomberg In addition to the different levels of consensus estimates the market development is different to 2013. Around the release of Q4 2013 results the market was confronted with very weak monthly sales figures (European January 2013 sales down 8.5% year on year), for the coming months we expect very promising headline figures. 6 24 January 2014

Change to estimates: shift some profits to 2015 We are lowering our estimates for 2014 and slightly increase our estimates for 2015. The negative changes for 2014 include slightly lower volumes, less tailwind from MQB. Positive changes include pricing and Porsche. TABLE 2: Estimates overview 2014E 2015E m CB old CB new Consensus CB old CB new Consensus Revenues 205,223 202,974 205,912 210,347 211,443 216,011 EBIT 13,828 13,228 13,180 15,130 15,334 15,125 Pre-tax profit 16,015 15,203 15,290 18,140 18,146 17,436 EPS 23,44 22,25 23,16 26,45 26,57 25,96 estimates, Bloomberg TABLE 3: Our EBIT bridge 2011-15 Operating Profit in: FY 2011 FY 2012 FY 2013 FY 2014 bn 11.271 11.510 11.667 13.228 Volume/Mix/Price 0.800-1.529 0.818 1.939 thereof Vol 3.575-0.333 0.791 0.967 thereof Mix -0.347 0.191 0.028-0.028 thereof price -2.427-1.387 0.000 1.000 FX 1.200-0.600-0.800-0.800 Product costs 1.500 1.600 1.500 1.250 Fix/launching costs/depr. -3.200-1.100-1.150-1.200 Scania -0.433 0.820 0.381 Financial services 0.300 0.080-0.010 0.000 other 0.038 0.515 0.325 0.266 Porsche -0.400 1.624 0.180 0.270 11.510 11.667 13.228 15.334 Operating Profit in: FY 2012 FY 2013 FY 2014 FY 2015 2014: EBIT moves from 13.8bn to 13.2bn, now slightly above consensus Our key assumptions for 2014: 3.5% volume growth outside China, 20% operating leverage, neutral pricing, 800m FX headwind, 1.5bn help from product cost, 1.15bn headwind from fixed-cost/depreciations. We discuss the factors below. Volume growth: We reduce our volume growth assumption from 5% to 3.5%. For Europe we keep our positive view, as described above. However, for the US regions (due to a lower market share), for Brazil (lower market volumes), for Russia (lower market volumes) we have reduced our volume estimates. Including China we estimate 5% volume growth (previously 6.2%). In our EBIT bridge we arrive at 791m volume effect, assuming some 20% operating leverage). This is some 200m reduction compared to our previous forecast. Our mix assumptions remain largely unchanged, on a group level we see a slightly positive mix effect. Product cost: In 2014 the number of cars to be produced on MQB increases from some 1m units to 2m units (thereof 500k in China), with increasing volumes for the Golf, Skoda Octavia, Seat Leon and (towards the end of 2014) the new Passat. We estimate that the combination of reduced upfront cost and positive labour cost and material cost savings yields a year-on-year improvement in Product Cost of some 1.5bn (slightly below the 1.6bn we forecast for 2013). Some 1.1bn we estimate to come from MQB, the remaining 0.4bn from other product cost improvements. 2015: volumes & pricing & product cost For 2015 our key assumptions remain unchanged. We assume a slightly lower operating leverage of 18% as capacity utilisation increased. For pricing we expect 1bn tailwind and from currencies we model some 800m headwind. 24 January 2014 7

Additional cost savings from Product cost are expected to be 1.25bn as a function of volumes produced on MQB and MLB further ramping up. For Porsche we assume an increase in EBIT from 2.75bn to 3.02bn. Recently, the German weekly magazine Wirtschaftswoche reported that Porsche mulls increasing production of the new small SUV Macan from 50k units to 80k units. According to the article, the 2014 volumes are sold out and waiting time is some 13 months (our local Porsche dealer in Frankfurt could confirm this). Porsche recently unveiled the details for the Macan, deliveries start on 5 April, three versions are available, starting price is 57,930. We believe that profitability of the Macan should be similar to the Cayenne at c. 15% margin (the price for the 3l version is some 16% above a comparable Audi Q5 that shares a high portion of common parts). Volkswagen will host a launch event for the Porsche Macan on 10 April in Leipzig we expect supportive news flow from the event. All in all we arrive at 15.3bn EBIT and 26.57 EPS for 2015E, compared to consensus of 15.1bn EBIT and 25.96 EPS (source: Bloomberg). 8 24 January 2014

TABLE 4: Peer group valuation Valuation: target P/E ratio of 8.7x We use a sum-of-the-parts valuation for Volkswagen. For Audi and Bentley we use the same multiples as for Mercedes and BMW. For Porsche we use a similar EV/EBIT multiples (which might be unfair due to Porsche s superior growth profile) but a higher EV/Sales multiple to reflect the sustainably higher profitability. We are valuing MAN and Scania in line with Volvo and use the same multiples as for Daimler Trucks. We value the Chinese JVs with a P/E ratio of 8.3x on 2015 estimates, in line with multiples of Chinese peers. Based on our 2015 estimates our target price moves from 205 to 235. This implies a target P/E ratio of 8.7x, which we regard conservative. To get to our 2015 estimates we assume a 4.6% EBIT margin for the VW brand. CFO Pötsch implied at the Frankfurt Motor Show that 6% will be achieved before 2018. Bull-case scenario: if we were to assume 6% EBIT margin for the VW brand, 10% for Audi we would arrive at 31 EPS for 2015. Using Toyota s P/E ratio would yield a fair value of 300. EV/Sales EV/EBITDA EV/EBITA P/E OEMs Rec 2014 2015 2014 2015 2014 2015 2014 2015 BMW Add 0.51x 0.47x 3.4x 3.1x 5.6x 5.0x 10.4x 9.4x Daimler Buy 0.49x 0.45x 4.2x 3.6x 5.7x 4.8x 9.6x 8.2x Fiat Hold 0.37x 0.35x 3.6x 3.2x 8.0x 6.9x nm 9.8x Renault Hold 0.01x nm 0.1x nm 0.4x nm 8.2x 5.9x Peugeot SA Add 0.17x 0.16x 3.1x 2.5x 63.8x 12.0x 20.9x 5.9x Porsche Buy nm nm nm nm nm nm nm nm VW Buy 0.37x 0.35x 3.1x 2.6x 5.8x 4.7x 9.1x 7.5x Average (excl. Porsche) 0.32x 0.35x 2.9x 3.0x 14.9x 6.7x 11.6x 7.8x 24 January 2014 9

TABLE 5: VW 2015e SOP Valuation Asset Revenue Multiple EV EBIT Multiple EV AVERAGE /SHARE Volkswagen 105.555 27% 28.5 4.152 5,2x 21.59 25.045 55 Skoda 10.818 25% 2.705 620 4,5x 2.79 2.747 6 SEAT 7.678 5% 384 71 5,2x 369 377 1 Mass Brands 124.052 25% 31.588 4.843 5,1x 24.75 28.169 61 Audi 51.309 52% 26.681 4.75 5,7x 27.075 26.878 59 Bentley 1.639 52% 852 155 5,7x 884 868 2 Porsche AG 16.707 90% 15.036 3.02 5,7x 17.214 16.125 35 Ducati 540 50% 270 50 5,7x 285 278 1 Premium Brands 70.194 61% 42.839 7.975 5,7x 45.458 44.148 96 Commercial Vehicles 10.242 60% 6.145 620 5,0x 3.1 4.623 10 Scania 11.546 75% 8.659 1.321 9,0x 11.889 10.274 22 MAN 18.377 70% 12.864 1.185 8,5x 10.073 11.468 25 Trucks 40.165 69% 27.669 3.126 8,0x 25.062 26.365 57 Other -43.562 30% -13.069-2.04 5,0x -10.2-11.634-25 TOTAL OF FULLY CONSOLIDATED INDUSTRIAL ASSETS 87.048 190 Associates / Other Stake Method Financial Services 100,00% RoE/CoE 13.44 29 VW China 50%/45% PE-ratio 33.055 72 Suzuki market price 2.552 6 SGL Carbon market price 168 0 Net Cash/(Debt) 11.313 25 Pension -22.338-49 Other Minorities -5.113-11 TOTAL EQUITY VALUE 120.125 262 Holding Discount -12.012-10% TARGET PRICE 108.112 235 10 24 January 2014

TABLE 6: Divisional estimates Vehicles sales (in thousands) 2012 y-o-y Q3 2013 Q4 2013 2013 y-o-y 2014 y-o-y 2015 y-o-y Volkswagen Passenger Cars 4,850 9% 1,123-8% 1,201-1% 4,700-3% 4,925 5% 5,100 4% Audi 1,299-16% 312-4% 306 3% 1,310 1% 1,380 5% 1,420 3% ŠKODA 727 5% 162 13% 186 6% 710-2% 750 6% 780 4% SEAT 429 19% 91-6% 110-4% 445 4% 485 9% 525 8% Bentley 9 29% 3 50% 2 0% 9 0% 10 6% 11 11% Volkswagen Commercial Vehicles 437-1% 105 3% 115 7% 440 1% 470 7% 490 4% Scania 67-16% 18 20% 24 20% 80 19% 85 6% 92 8% MAN 134 436% 33 0% 40 21% 138 3% 145 6% 160 7% VW China 2,609 19% 777 16% 806 17% 3,100 19% 3,500 13% 3,750 7% Other -1,278-11% -293-1% -333 4% -1,350 6% -1,550 15% -1,580 2% Porsche 62 37 68% 47 18% 163 172 6% 195 13% Volkswagen Group 9,345 12% 2,368 1% 2,504 6% 9,744 4% 10,377 6% 10,943 5% of which: Automotive Division 9,345 12% 2,368 1% 2,504 6% 9,744 4% 10,345 6% 10,943 6% VW excluding China 6736 9% 1,591-4% 1,698 1% 6,644-1% 6,877 3.5% 7192.5 4.6% Sales revenue ( m) 2012 y-o-y Q3 2013 Q4 2013 2013 y-o-y 2014 y-o-y 2015 y-o-y Volkswagen Passenger Cars 103,942 10% 23,866-9% 24,935 0% 99,168-5% 102,428 3% 105,555 3% Audi 48,771 11% 11,731-7% 11,287 2% 48,252-1% 50,107 4% 51,309 2% ŠKODA 10,438 2% 2,399 11% 2,672 4% 10,037-4% 10,452 4% 10,818 4% SEAT 6,485 20% 1,388-4% 1,613-4% 6,630 2% 7,126 7% 7,678 8% Bentley 1,453 30% 379 29% 362-10% 1,431-2% 1,489 4% 1,639 10% Volkswagen Commercial Vehicles 9,450 5% 2,234 0% 2,362 0% 9,373-1% 9,872 5% 10,242 4% Scania 9,314-7% 2,268 7% 2,866 11% 10,231 10% 10,717 5% 11,546 8% MAN 15,999 503% 3,713-6% 4,508 6% 15,850 3% 17,228 9% 18,377 7% Other -36,927 9% -8,957 1% -10,142 4% -39,512 7% -41,487 5% -43,562 5% Volkswagen Financial Services 17,872 13% 4,570 4,561 0% 18,819 5% 20,041 6% 21,134 5% Porsche 5,879 3,396 3,981 7% 14,400 145% 15,001 4% 16,707 11% Volkswagen Group 192,676 21% 46,987-4% 49,006 1% 194,680 1% 202,974 4% 211,443 4% Operating result ( m) 2012 y-o-y Q3 2013 Q4 2013 2013 y-o-y 2014 y-o-y 2015 y-o-y Volkswagen Passenger Cars 3,640-4% 623-3% 753-4% 2,870-21% 3,042 6% 4,152 36% 3.5% 2.6% 3.0% 2.9% 3.0% 3.9% Audi 5,380 1% 1,099-17% 1,057-10% 4,800-11% 4,720-2% 4,750 1% 11.0% 9.4% 9.4% 9.9% 9.4% 9.3% ŠKODA 712-4% 128 8% 144-1% 515-28% 580 13% 620 7% 6.8% 5.3% 5.4% 5.1% 5.5% 5.7% SEAT (156) -31% (53) 0% (7) -89% (100) -36% 20-120% 71 - -2.4% -2.4% -0.3% -1.5% 0.3% 0.9% Bentley 100 1150% 40 150% 37 37% 135 35% 150 11% 155 3% 6.9% 10.6% 10.2% 9.4% 10.1% 9.5% Volkswagen Commercial Vehicles 421-6% 96 66% 118-2% 460 9% 558 21% 620 11% 4.5% 4.3% 5.0% 4.9% 5.7% 6.1% Scania 930-32% 227 8% 314 30% 1,005 8% 1,132 13% 1,321 17% 10.0% 10.0% 11.0% 9.8% 10.6% 11.4% MAN 808 319% 171 6% 253-14% 300-63% 993 231% 1,185 19% 5.1% 4.6% 5.6% 1.9% 5.8% 6.4% Other (2,681) 66% (582) -32% (625) -39% (2,400) -10% (2,197) -12% (2,040) -7% 7.3% 6.5% 6.2% 6.1% 5.3% 5.1% Thereof PPA 1,895 350-53% 350-48% 1,400 1,100 950 Volkswagen Financial Services 1,410 17% 430 33% 364-14% 1,490 6% 1,480-1% 1,480 0% 7.9% 9.4% 8.0% 7.9% 7.4% 7.0% Porsche 946 599 54% 677 22% 2,570 2,750 3,020 16.1% 17.6% 17.0% 17.8% 18.3% 18.1% Volkswagen Group 11,510 2% 2,777 3,084 11,645 1% 13,228 14% 15,334 18% 6.0% 5.9% 6.3% 6.0% 6.5% 7.4% 24 January 2014 11

Porsche: spread has declined We are updating our sum-of-the-parts valuation for Porsche with our new fair value for Volkswagen. We use the 223 fair value for VW ordinary shares (5% discount to the preference shares) and apply a 20% Holding discount. The progress on the litigation front is annoyingly slow and we will very likely not have transparency on the legal risks in the short term. Nevertheless, Porsche achieved some milestones in the past twelve months. Most recently, on 21 January, three plaintiffs that wanted to pause the civil cases in Brunswick to await the outcome of the criminal cases against the former management in Stuttgart lost their bid. This implies that the Brunswick court (which has ruled in favour of Porsche in the past) has the intention to accelerate the process. We are reducing the assumed value of litigation risk in our sum-of-the-parts valuation from 4.5bn to 3.5bn. As a result, we arrive at a fair value of 85. Given the limited upside, we lower our rating from Buy to Hold. Porsche remains an attractive access to VW for those who like the VW investment case. The spread, i.e. the implied discount to VW, has shrunk in the past twelve months. TABLE 7: Sum of the parts Porsche SE Value per share Share Value 50.7% of VOW shares 33.42 109.21 150 223 Net debt / (cash) (2,589) (8.46) Litigation risks 3,500 11.44 Equity Value Number of shares 306 NAV per share 106.24 Conglomerate discount 20.0% 21.25 Fair value per share 84.99 If we would use the current VW ordinary share price, apply 20% Holding discount we arrive at an implied litigation risk of 1.7bn. We see limited downside to this number, which implies limited upside to the PAH-VW spread. TABLE 8: At current share prices for VW and Porsche some 1.7bn legal risks are priced in Value per share Share Value 50.7% of VOW shares 29,490 96.37 150 197 Net debt / (cash) (2.589) (8,46) Litigation risks 1,700 5.56 Equity Value 30,379 NOSH 306 NAV per share 99.28 Conglomerate discount 20.00% 19.86 Fair value per share 79.42 The next news flow on Porsche should be from the hearing in Brunswick in April. Whether the three cases mentioned above (those that will not be on hold until the criminal case in Stuttgart is concluded) will be added to the hearing in April is not clear yet. What s the upside risk from here? Table 6 shows that currently the implied litigation risk is some 1.7bn. If we were to remove this it would be worth some 5.56 per Porsche share, some 7% upside from the current level. It seems very unlikely that we will get transparency on the outcome of the cases in Germany (in Brunswick and Hanover) and in the US (there is still an open case at the New York district court that was appealed). We are using a Holding discount of 20% and use Heineken Holding as a benchmark. In case of a merger of Porsche SE and VW the discount would disappear. However, we have no indication that this could materialise in the short term. As a pre-condition, litigation risks would have to be resolved. Second, VW preference shareholders would have to agree on a merger and we struggle to see an incentive for this shareholder class. 12 24 January 2014

Appendix Light vehicle sales (#m) 2010 2011 2012 2013 2014 2015 2016 2017 West Europe 14.43 14.38 13.16 12.80 13.25 13.90 14.50 15.00 France 2.67 2.63 2.30 2.18 2.25 2.40 2.50 2.55 Germany 3.11 3.40 3.33 3.20 3.30 3.40 3.45 3.50 Italy 2.13 1.92 1.50 1.40 1.48 1.65 1.80 1.85 Spain 1.10 0.91 0.80 0.83 0.87 0.93 0.96 1.00 UK 2.26 2.21 2.29 2.51 2.58 2.60 2.65 2.70 Other 3.16 3.30 2.95 2.68 2.77 2.92 3.14 3.40 East Europe 3.75 4.63 4.85 4.90 5.07 5.45 5.84 6.23 Russia 1.88 2.65 2.94 2.76 2.70 2.85 3.00 3.15 Asia 28.92 29.31 32.63 35.70 38.50 41.90 45.40 48.30 China 17.24 18.00 19.06 21.73 23.50 25.50 27.50 29.50 India 2.71 2.93 3.27 2.90 3.10 3.50 3.80 4.10 Japan 4.89 4.13 5.25 5.10 4.75 4.70 4.65 4.50 North America 13.93 15.23 17.13 18.41 19.00 19.50 19.80 20.10 USA 11.56 12.75 14.46 15.60 16.15 16.60 17.00 17.25 South America 4.74 5.19 5.08 5.47 5.66 6.05 6.40 6.76 Brazil 3.36 3.51 3.51 3.45 3.40 3.50 3.75 3.90 Other 7.90 8.15 7.90 6.22 6.52 6.60 7.01 7.61 Total 73.67 76.89 80.74 83.50 88.00 93.40 98.95 104.00 Light vehicle sales ( y/y) 2010 2011 2012 2013 2014 2015 2016 2017 West Europe (3.7%) (0.4%) (8.4%) (2.7%) 3.5% 4.9% 4.3% 3.4% France 0.1% (1.3%) (12.6%) (5.3%) 3.2% 6.7% 4.2% 2.0% Germany (21.9%) 9.4% (2.3%) (3.8%) 3.1% 3.0% 1.5% 1.4% Italy (9.0%) (9.8%) (21.6%) (6.9%) 5.7% 11.5% 9.1% 2.8% Spain 3.6% (16.9%) (12.7%) 4.2% 4.8% 6.9% 3.2% 4.2% UK 3.1% (2.4%) 3.6% 9.8% 2.8% 0.8% 1.9% 1.9% Other 15.1% 4.3% (10.7%) (9.0%) 3.4% 5.4% 7.5% 8.3% East Europe 16.9% 23.5% 4.7% 1.0% 3.5% 7.5% 7.2% 6.7% Russia 27.9% 40.8% 10.9% (6.0%) (2.2%) 5.6% 5.3% 5.0% Asia 26.0% 1.4% 11.3% 9.4% 7.8% 8.8% 8.4% 6.4% China 32.7% 4.4% 5.9% 14.0% 8.1% 8.5% 7.8% 7.3% India 31.4% 8.1% 11.7% (11.4%) 6.9% 12.9% 8.6% 7.9% Japan 7.5% (15.4%) 27.0% (2.9%) (6.9%) (1.1%) (1.1%) (3.2%) North America 10.4% 9.3% 12.5% 7.5% 3.2% 2.6% 1.5% 1.5% USA 11.1% 10.3% 13.4% 7.9% 3.5% 2.8% 2.4% 1.5% South America 17.2% 9.6% (2.2%) 7.7% 3.5% 6.9% 5.8% 5.6% Brazil 9.3% 4.5% (0.0%) (1.8%) (1.4%) 2.9% 7.1% 4.0% Other 15.1% 3.1% (3.1%) (21.2%) 4.8% 1.2% 6.2% 8.6% Total 13.9% 4.4% 5.0% 3.4% 5.4% 6.1% 5.9% 5.1% Light vehicle sales (%) 2010 2011 2012 2013 2014 2015 2016 2017 West Europe 19.6% 18.7% 16.3% 15.3% 15.1% 14.9% 14.7% 14.4% France 3.6% 3.4% 2.9% 2.6% 2.6% 2.6% 2.5% 2.5% Germany 4.2% 4.4% 4.1% 3.8% 3.8% 3.6% 3.5% 3.4% Italy 2.9% 2.5% 1.9% 1.7% 1.7% 1.8% 1.8% 1.8% Spain 1.5% 1.2% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% UK 3.1% 2.9% 2.8% 3.0% 2.9% 2.8% 2.7% 2.6% Other 4.3% 4.3% 3.6% 3.2% 3.1% 3.1% 3.2% 3.3% East Europe 5.1% 6.0% 6.0% 5.9% 5.8% 5.8% 5.9% 6.0% Russia 2.6% 3.4% 3.6% 3.3% 3.1% 3.1% 3.0% 3.0% Asia 39.3% 38.1% 40.4% 42.8% 43.8% 44.9% 45.9% 46.4% China 23.4% 23.4% 23.6% 26.0% 26.7% 27.3% 27.8% 28.4% India 3.7% 3.8% 4.1% 3.5% 3.5% 3.7% 3.8% 3.9% Japan 6.6% 5.4% 6.5% 6.1% 5.4% 5.0% 4.7% 4.3% North America 18.9% 19.8% 21.2% 22.0% 21.6% 20.9% 20.0% 19.3% USA 15.7% 16.6% 17.9% 18.7% 18.4% 17.8% 17.2% 16.6% South America 6.4% 6.8% 6.3% 6.6% 6.4% 6.5% 6.5% 6.5% Brazil 4.6% 4.6% 4.4% 4.1% 3.9% 3.7% 3.8% 3.8% Other 10.7% 10.6% 9.8% 7.4% 7.4% 7.1% 7.1% 7.3% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 24 January 2014 13

Reference to first page of disclaimer VW pref. price chart Porsche pref price chart Distribution of ratings: Number of recommendations from Commerzbank, CM- Research, at the end of the fourth quarter 2013 99 (48.2%) Buy / Add 29 (61.6%) 76 (37.1%) Hold 12 (25.6%) 30 (14.7%) Sell / Reduce 6 (12.8%) thereof recommendations for issuers to which investment banking services were provided during the preceding twelve months This document has been created and published by the Corporates & Markets division of Commerzbank AG, Frankfurt/Main or Commerzbank s group companies mentioned in the document. Commerzbank Corporates & Markets is the investment banking division of Commerzbank, integrating research, debt, equities, interest rates and foreign exchange. The relevant research analyst(s), as named on the front cover of this report, certify that (a) the views expressed in this research report accurately reflect their personal views about the securities and companies mentioned in this document; and (b) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. The research analyst(s) named on this report are not registered / qualified as research analysts with FINRA. The research analyst(s) may not be associated persons of Commerz Markets LLC and therefore may not be subject to NASD Rule 2711 and incorporated NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst. It has not been determined in advance whether and in what intervals this document will be updated. Unless otherwise stated current prices refer to the most recent trading day s closing price. Conflicts of interest: Disclosures of potential conflicts of interest relating to Commerzbank AG, its affiliates, subsidiaries (together Commerzbank ) and its relevant employees with respect to the issuers, financial instruments and/or securities forming the subject of this document valid as of the end of the month prior to publication of this document*: 2. Commerzbank owns 1 % or more (calculated under computational methods as required by US regulations) of any class of Volkswagen AG, Wolfsburg, Porsche Automobil Holding SE common equity securities. 7. Commerzbank, and or its affiliates, has managed or co-managed a public offering for Volkswagen AG, Wolfsburg in the past 12 months. 8. Commerzbank AG, or its affiliates, has received compensation from Volkswagen AG, Wolfsburg within the last 12 months for the provision of investment banking services. Please refer to the following link for disclosures on companies included in compendium reports or disclosures on any company covered by Commerzbank analysts: https://research.commerzbank.com/portal/en/site/equity/disclaimer_1/index.jsf* * Updating this information may take up to ten days after month end. Ratings and definitions Our fundamental equity analysts rate shares on an absolute basis using a 6-month target price. A Buy rating implies potential share price upside of more than 15%. An Add rating reflects potential share price upside of between 5% and 15%. A Hold rating is given when implied upside or downside is within 5% of the current share price. A Reduce rating implies potential downside of between 5% and 15%. A Sell rating implies potential share price downside of more than 15%. For more information pleaser refer to: https://research.commerzbank.com/portal/en/site/equity/disclaimer_1/index.jsf Explanation of valuation parameters and risk assessment Unless otherwise stated in the text of the financial analysis/investment research, target prices in the publication are based on either a discounted cash flow valuation and/or comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst's views on the likely course of investor sentiment. Whichever valuation method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company s products. Such demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, from changes in social values. Valuations may also be affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, political and social conditions. Disclaimer This document is for information purposes only and does not take account of the specific circumstances of any recipient. The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments and/or securities mentioned in this document and will not form the basis or a part of any contract or commitment whatsoever. The information in this document is based on data obtained from sources believed by Commerzbank to be reliable and in good faith, but no representations, guarantees or warranties are made by Commerzbank with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current judgement of the author(s) on the data of this document and are subject to change without notice. The opinions do not necessarily correspond to the opinions of Commerzbank. Commerzbank does not have an obligation to update, modify or amend this document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. The past performance of financial instruments is not indicative of future results. No assurance can be given that any financial instrument or issuer described herein would yield favourable investment results. Any forecasts or price targets shown for companies and/or securities discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assumptions made by Commerzbank or by other sources relied upon in the document were inapposite. 14 24 January 2014

Neither Commerzbank nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this document. Commerzbank may provide hyperlinks to websites of entities mentioned in this document, however the inclusion of a link does not imply that Commerzbank endorses, recommends or approves any material on the linked page or accessible from it. Commerzbank does not accept responsibility whatsoever for any such material, nor for any consequences of its use. This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of Commerzbank. The manner of distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations. Additional notes to readers in the following countries: Germany: Commerzbank AG is registered in the Commercial Register at Amtsgericht Frankfurt under the number HRB 32000. Commerzbank AG is supervised by the German regulator Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main, Germany. United Kingdom: This document has been issued or approved for issue in the United Kingdom by Commerzbank AG London Branch. Commerzbank AG, London Branch is authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details on the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. This document is directed exclusively to eligible counterparties and professional clients. It is not directed to retail clients. No persons other than an eligible counterparty or a professional client should read or rely on any information in this document. Commerzbank AG, London Branch does not deal for or advise or otherwise offer any investment services to retail clients. United States: Commerz Markets LLC ( Commerz Markets ): This document has been approved for distribution in the US under applicable US law by Commerz Markets, a wholly owned subsidiary of Commerzbank and a US registered broker-dealer. Any securities transaction by US persons must be effected with Commerz Markets. Under applicable US law; information regarding clients of Commerz Markets may be distributed to other companies within the Commerzbank group. This research report is intended for distribution in the United States solely to institutional investors and major U.S. institutional investors, as defined in Rule 15a-6 under the Securities Exchange Act of 1934. Commerz Markets is a member of FINRA and SIPC. Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. Under no circumstances is the information contained herein to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. In Canada, the information contained herein is intended solely for distribution to Permitted Clients (as such term is defined in National Instrument 31-103) with whom Commerz Markets LLC deals pursuant to the international dealer exemption. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities may not be conducted through Commerz Markets LLC. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon these materials, the information contained herein or the merits of the securities described herein and any representation to the contrary is an offence. European Economic Area: Where this document has been produced by a legal entity outside of the EEA, the document has been re-issued by Commerzbank AG, London Branch for distribution into the EEA. Singapore: This document is furnished in Singapore by Commerzbank AG, Singapore branch. It may only be received in Singapore by an institutional investor as defined in section 4A of the Securities and Futures Act, Chapter 289 of Singapore ("SFA") pursuant to section 274 of the SFA. Hong Kong: This document is furnished in Hong Kong by Commerzbank AG, Hong Kong Branch, and may only be received in Hong Kong by professional investors within the meaning of Schedule 1 of the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made there under. Japan: Commerzbank AG, Tokyo Branch is responsible for the distribution of Research in Japan. Commerzbank AG, Tokyo Branch is regulated by the Japanese Financial Services Agency (FSA). Australia: Commerzbank AG does not hold an Australian financial services licence. This document is being distributed in Australia to wholesale customers pursuant to an Australian financial services licence exemption for Commerzbank AG under Class Order 04/1313. Commerzbank AG is regulated by Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) under the laws of Germany which differ from Australian laws. Commerzbank AG 2014. All rights reserved. Version 9.16 Commerzbank Corporates & Markets Frankfurt London Commerzbank AG Commerzbank AG London Branch New York Commerz Markets LLC Singapore Branch Commerzbank AG Hong Kong Branch Commerzbank AG DLZ - Gebäude 2, Händlerhaus Mainzer Landstraße 153 60327 Frankfurt PO BOX 52715 30 Gresham Street London, EC2P 2XY 2 World Financial Center, 32nd floor New York, NY 10020-1050 71, Robinson Road, #12-01 Singapore 068895 29/F, Two IFC 8 Finance Street Central Hong Kong Tel: + 49 69 136 21200 Tel: + 44 207 623 8000 Tel: + 1 212 703 4000 Tel: +65 631 10000 Tel: +852 3988 0988 24 January 2014 15