Volkswagen Brand in China

Weiming Soh

Executive Vice President of Volkswagen Group China

Sales and Marketing
Page 1
Volkswagen Brand China
Investor Conference 2010 in Beijing

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies and Think Blue Campaign

Page 2
China has been the key region for the Volkswagen
Brand worldwide for decades
Regional distribution of deliveries to customers by brand

Toyota Ford Honda

CY2009

US 5% 34% 33% 33%

China 28% 14% 5% 16%

Germany 17% 2% 9% 1%

Japan 1% 26% 0% 16%

Rest 23% 12% 26% 9%

of
Europe

Source: Volkswagen Group; Global Insight

Page 3
Now, China is the largest market for the Volkswagen
Brand worldwide
Passenger Car Market Worldwide Volkswagen Brand Worldwide
Jan -March, 2010 Jan -March, 2010

China
China
19% 33%
4% Brazil
2% Russia
4% India 13% Brazil
1% Russia
0.2% India

Mature markets 71% Mature markets 53%

Source: Volkswagen Group; based on deliveries to customers

Page 4
2009 was a year of “Records” for the Volkswagen
Brand and 2010 is aiming for a new height

Deliveries to customers ≥ Market Growth

‘000 Units

1,118

844
781
629
511

2005 2006 2007 2008 2009 2010

Remark: Sales forecast is based on PO target (10 million total market forecast)

Page 5
In Q1 2010, Volkswagen Brand also secured its leading
market share position on the Chinese Mainland
YTD MS % YTD MS %
Market Share by Brand % (Jan-Mar 2010) Ranking Brand
Jan-Mar 10 2009

Volkswagen 1 Volkswagen 13.7% 13.2%

2 Toyota 6.0% 7.7%
Others
3 Honda 6.0% 6.7%

Toyota 4 Nissan 5.8% 6.4%

5 BYD 5.7% 5.1%
6 Chevrolet 5.1% 3.9%
Honda
7 Hyundai 4.7% 6.8%
8 Buick 4.5% 5.3%
Nissan
9 Chery 3.4% 4.6%
Suzuki
BYD
Chery
10 Suzuki 2.9% 2.7%
Buick Chevrolet
Hyundai Others 42.2% 37.5%
Audi 1.9% 1.9%
Skoda 1.6% 1.4%

Source: Volkswagen Group China; excl. LCVs

Page 6
The latest new models have dramatically improved the
image of the Volkswagen Brand in the past few years

Sales of Shanghai Volkswagen Sales of FAW-Volkswagen

+Touran +Lavida +New + Tiguan + Sagitar +New Bora +Golf A6 +CC

Passat LY + Magotan

55% 56%
60%
60%
72% 67%
72%
80%

Santana Jetta

2007 2008 2009 2010 2007 2008 2009 2010

Remarks: Average share of old models of SVW and FAW-VW is 24% in Y2010
Old models New models
Source: Volkswagen Group China

Page 7
SVW delivered 568,071 Volkswagen Brand cars
in 2009, up 29%

Sales No. 1 sales in China 2009

2009
2009 Passat Lingyu sales volume > 100,000 units

Polo sales volume > 100,000 units

Utilization of TSI+DSG and EA 888

engine technology

2010
Lavida Santana/ Passat Polo Touran Tiguan LWB launch
Vista

Source: Volkswagen Group China

Page 8
FAW-VW delivered 527,670 Volkswagen Brand cars
in 2009, up 35%

Sales Magotan sales volume > 70,000 units

2009
2009 Sagitar sales volume > 100,000 units

Golf A6 successfully launched, 60%

of which are TSI+DSG models

Launch of Golf GTI and CC

2010
Volume breakthrough on Magotan 1.4
Jetta New Sagitar Magotan Golf A6
Bora
TSI+DSG

Source: Volkswagen Group China

Page 9
Volkswagen Import Company (VICo) in China is young,
but has great potential
Business Startup Infrastructure Setup Accelerate Growth Volkswagen
Network, Training, Process, etc. Individual, Motorsports, Bluemotion Worldwide Target
2004 2005 2006 2007 2008 2009 2010 2011 2012

Target Phaeton No. 1

20,162
Touareg No. 1
11,108

7,850
2,026 5,015
645
New Beetle No. 2
Sales
volume
India Ukraine Hungary Czech Poland Japan Austria Russia
as today’s:
Scirocco No. 2

Source: Volkswagen Group China

Page 10
Volkswagen Import China (VICo) has achieved a
remarkable growth among the key competitors

Total Import Market +116%

+224%
+159% +179% +283% +145% +193% +78% +111% +218%
20,811
17,998 Jan – Mar 2009
Jan – Mar 2010

13,676

9,976

6,898
4,954
7,448 3,590
6,937 2,020
1,691
3,567 3,083 2,811 83 175 11 35
Mercedes- BMW Lexus Volkswagen Audi Porsche Volvo Bentley Lamborghini
Benz

Source: Volkswagen Group China

Page 11
By March 2010, Volkswagen Hong Kong reached 10.5%
market share (cumulative)
Volkswagen Brand Strategic Challenge for
Market Share in Jan-Mar, 2010 Volkswagen Brand m/s %
Jan-Mar,
2010 5
VWHK
Competitor 1 19.9%
established
Competitor 2 13.2% 6
7 7
Competitor 3 11.2% 9.1%
10.5% 5.5%
4.5% 4.3%
Competitor 4 10.5%
10.1% 2006 2007 2008 2009 2010
Competitor 5 6.1%
Volkswagen Brand MS in Q1 2010
Competitor 6
4.9%
11.2% 12.7%
Competitor 7 3.9%
7.5%
2.6%
Jan. Feb. Mar.

Source: Volkswagen Group China

Page 12
Volkswagen Brand made integrated efforts to strengthen
its presence in Hong Kong

The first worldwide VW city showroom, and

the biggest showroom in Hong Kong
Largest Test Drive Initiative ever in
Hong Kong
Aggressive marketing strategy
(e.g. Taxi advertisement)
State-of-the-art workshop facility in
Tsuen Wan

Source: Volkswagen Group China

Page 13
Volkswagen Brand China
Investor Conference 2010 in Beijing

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies and Think Blue Campaign

Page 14
Volkswagen Motorsport swept China and scooped 1st
and 2nd positions in Macau Grand Prix

Scirocco Cup Race of Champion Grand Prix F3 Race

Source: Volkswagen Group China

Page 15
Successful TSI+DSG promotion provided a solid foundation
to accelerate sales in 2010
2009 Event : Discover Volkswagen TSI+DSG in Dalian & Shanghai
Dalian VWED (TSI factory) & Shanghai VWATD (DSG factory)/VWPT (TSI factory)
“SEE” “TOUCH” “FEEL”
Display of cut-away engines Factory tour with experts Test drive with integration of
1.4TSI, 1.8TSI and 2.0TSI, First time visit of VWATD (Dalian) “200 m Acceleration Game” to
7-DSG and 6-DSG exponents Introduction of TSI+DSG product experience power of the engines
knowledge & competitive advantages “Fuel Duel” game to promote
Full product-line
“minimum fuel consumption”

2010 Event : Production of DSG started in Volkswagen Automatic Transmission Factory in Dalian
“Start of Production” ceremony
on May, 11th, 2010
Dalian factory will produce 300,000
Units of 7-speed DSG transmission
every year and gradually expand to
capacity of 600,000

Source: Volkswagen Group China

Page 16
In 2010, the Volkswagen Brand will launch 9 new
models/series including CKD and FBU imports
Golf GTI Jetta A2 FL Tiguan CC

Beijing
Jetta Tiguan R New New
Jan Feb GTI Motor May CC Sep Oct
A2 FL LWB Strategy Phaeton Touareg
Show

R and R-line models New Phaeton New Touareg /Hybrid

Source: Volkswagen Group China

Page 17
Volkswagen Brand China
Investor Conference 2010 in Beijing

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies and Think Blue Campaign

Page 18
Strategic dealer network expansion plan to fulfill volume
ambition

Volkswagen Brand dealer network expansion plan

+85%
+600
>1,750

+200
>1,150
950

2009 2010 (E) Future

Source: Volkswagen Group China

Page 19
Volkswagen Brand develops different dealership
formats and master plan for China
4S Dealership (Umbrella Facelift) 4S Dealership (New Build)

City Showroom Phaeton Center 2nd Tier

Source: Volkswagen Group China

Page 20
Volkswagen Brand China
Investor Conference 2010 in Beijing

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies and Think Blue Campaign

Page 21
Volkswagen Brand China will enhance the training
infrastructure to meet future challenges

Today Future

Best Quality
Future Strategy & Programs

Current Strategy & No. 1 Customer

• National Training • Build the industry leading
Programs Satisfaction
Strategies Training Academy

• Individual Training • International • Develop Top-of-mind

Strategies Volkswagen Management Qualification &
Brand Image
Standards Trainer Qualification
• Individual Training
Standards • Localized • Implant Volkswagen Top Performer
• Locally Developed International Train-the-Trainer standard & Attraction/Retention
Programs Programs China TtT certification program

Source: Volkswagen Group China

Page 22
Major programs have been identified to meet customer
satisfaction target

Customer Satisfaction China Major Programs 2010 Targets

Dealer operation standards and process & audit

Technical and no-technical training

Dealer
Number
FAW-VW
SVW 2nd Tier Dealers
SVW 1st Tier Dealers
Sales1
(‘000)
Top in Volume
2,500 2,000

Brand
VICo
Official Sales target
1,978

1,773
2,000 1,600
1,635

Network development
1,648
1,407
1,500 1,116 1,463 1,200
1,323
645
1,130 550
485
1,000 938 800
415 266
350 231
214
154
500 81 400
592 642
491 544
457
50 70 80 90 95
0 0
2009 2010(E) 2011(E) 2012(E) 2013(E)

Dealer support

Dealer commercial policy and incentive programs

Source: Volkswagen Group China

Page 23
Volkswagen Brand China
Investor Conference 2010 in Beijing

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies and Think Blue Campaign

Page 24
Volkswagen introduced BlueMotionTechnologies
in China

Natural Resources Increase Renewable

(Oil, Gas) efficiency Energies

CNG TDI BlueMotion TwinDrive E-Drive

TSI DSG Hybrid Fuel Cell

Natural Resources Increase Renewable

(Oil, Gas) efficiency Energies

Source: Volkswagen Group China

Page 25
Comprehensive brand campaign of Think Blue is being
launched in China starting from 2010 Beijing Auto show

Auto Show Internet

360° Brand Campaign

Eco-Driving Promotion Advertisement

Model Range Mobile Marketing

Source: Volkswagen Group China

Page 26
Volkswagen Brand in China
Weiming Soh

Executive Vice President of Volkswagen Group China

Sales and Marketing
Page 27
Disclaimer
This presentation contains forward-looking statements and information on the business development of
the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such
as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar
meaning. These statements are based on assumptions relating to the development of the economies of
individual countries, and in particular of the automotive industry, which we have made on the basis of the
information available to us and which we consider to be realistic at the time of going to press. The
estimates given involve a degree of risk, and the actual developments may differ from those forecast.

Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in
Western Europe (and especially Germany) or in the USA, Brazil or China, will have a corresponding
impact on the development of our business. The same applies in the event of a significant shift in current
exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech
koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove
incorrect, the actual results may significantly differ from those expressed or implied by such statements.

We do not update forward-looking statements retrospectively. Such statements are valid on the date of
publication and can be superceded.