Volkswagen group to invest more than €62 billion up to 2016

The Volkswagen Group will invest around €62.4 billion in its Automotive Division in the coming five years. This is the result of the Group’s investment planning for 2012 to 2016 discussed by the Supervisory Board on Friday. “The Volkswagen Group is investing a record amount in forward-looking projects to achieve its goal of becoming the world’s best automobile manufacturer in economic and ecological terms”, said Prof. Dr. Martin Winterkorn, CEO of Volkswagen Aktiengesellschaft, adding: “We shall continue to extend our innovation and technology leadership. Top of the agenda for us are investments in environmentally friendly, sustainable models and drives.”

Investments in property, plant and equipment will account for €49.8 billion. More than half of this (57 percent) will be invested in Germany alone. According to Winterkorn, the Volkswagen Group with its high level of domestic investments offers the best possible proof of Germany's international competitiveness as a leading manufacturing location. "And this will continue to be the case in future", he said.


The ratio of capital expenditure to sales revenue will be at a competitive level of around six percent on average in the period from 2012 to 2016.

Besides investments in property, plant and equipment, the total amount also includes additions to capitalized development costs of €11.6 billion and investments in financial assets of €1.0 billion net of proceeds from asset disposals. Volkswagen is laying the foundations for profitable, sustainable growth by building new production facilities, introducing new models and developing alternative drives, as well as with its modular toolkits.

Group Works Council Chairman Bernd Osterloh commented as follows: "Volkswagen's investment package is yet another move designed to ensure the Group is fit for the future and takes the form of high-quality investments in new, innovative products, manufacturing processes and our global locations. This safeguards jobs for the long term." He also said that the planning round is proof of Volkswagen's commitment to its home country of Germany. For example, roughly €100 million will be invested in significantly improving the flexibility in the body and white production area of the Wolfsburg plant. The same applies to body and white production at Emden. "The investments in the Wolfsburg and Emden locations safeguard operations at the Emden - Wolfsburg - Zwickau turntable. In future, flexible manufacturing of different volumes and products will be possible at these locations, reflecting market requirements. This represents a major contribution to ensuring these three locations
are fit for the future", Osterloh said. In addition, the investments in the German locations will focus on alternative drives, new generations of diesel and petrol engines, and new generations of Volkswagen's innovative direct shift gearboxes.

At €32.7 billion (roughly 66 percent), the Group will spend a large proportion of the total amount to be invested in property, plant and equipment in the Automotive Division on modernizing and extending the product range for all its brands. The main focus will be on new vehicles and successor models in almost all vehicle classes, which will be based on the
modular toolkit technology and related components. This will allow the Volkswagen Group to systematically continue its model rollout with a view to tapping new markets and segments.

In the area of powertrain production, new generations of engines will be launched offering additional enhancements to performance, fuel consumption and emission levels. In particular, the Group will continue to press ahead with the development of hybrid and electric engines.

In addition, the Company will make cross-product investments of €17.1 billion over the next five years. Due to the high quality targets and the continuous improvement of production processes, the new products also require changes to, and additional capacity in, the press shops, paintshops and assembly facilities. Investments outside production are mainly planned for the areas of development, quality assurance, sales, genuine parts supply and information technology.

Investment activities will also include expenditure on wind, solar and hydroelectric power, in order to supply the factories with renewable energies. The plans are based on the Volkswagen Group's current structures and hence already take into account the consolidation of Porsche Holding Salzburg. The joint ventures in China are not consolidated and are therefore also not included in the above figures. These companies will invest a total of €14.0 billion in new production facilities and products in the period from 2012 to 2016. These investments will be financed using the joint ventures' own funds.

| Volkswagen

Rolls-Royce to expand manufacturing plant

The Home of Rolls-Royce at Goodwood in West Sussex is to expand in the months ahead. The news follows significant growth in worldwide sales over the last 18 months and a greater demand from customers for highly personalised Rolls-Royce Ghost and Phantom models.

The expansion includes an increase in size by more than 2500 square metres for the Assembly Hall, completing the final phase of development from original site plans for the production area. A new extension will also increase the Surface Finish Centre by more than 640 square metres. Total investment in the project will be about £10 million.


This development follows record sales in 2010 and growing demand across all markets, both at home and internationally. The company is also expanding its dealer network, with several new dealerships recently launched in North America, Asia Pacific and Europe and more are planned in the balance of the year.

The new space, and a number of additional infrastructure changes, will allow the company’s manufacturing and Bespoke operation to expand significantly. Bespoke allows Rolls-Royce customers the luxury to commission motor cars that suit their personal lifestyles and creative desires, transforming super-luxury cars into unique hand-crafted masterpieces which are as individual as their owner’s fingerprint. This year, Rolls-Royce has seen a significant increase in demand for personalised bespoke models, and the company recently announced a doubling in the number of Bespoke experts throughout the business.

Torsten Müller-Ötvös, Chief Executive Officer for Rolls-Royce Motor Cars, said, “I am very pleased to announce our expansion plans. We continue to see increased demand from customers all over the world and the new facilities will allow us to increase the capacity for our hand-built, highly personalised motor cars. This investment demonstrates our confidence in this unique brand, our commitment to our Home at Goodwood - the only place in the world where Rolls-Royce motor cars are built - and signals the next phase in the development of our company.”

Mark Prisk, Minister of State for Business and Enterprise, said, “It is good news to hear that Rolls-Royce has plans for expansion at the Goodwood site. It is a further endorsement of the strength of the automotive sector in the UK. Automotive is the UK’s number one manufactured export – in 2010 the UK auto sector exported over £27 billion-worth of vehicles and parts.”

Construction is planned to commence later this year and will be completed in late 2012.

| Rolls-Royce

Saab update on production

Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) continues discussions with its supplier base on material supply and delivery terms in order to be able to resume production at its Trollhättan plant. Swan and Saab Automobile continue their discussions with parties to obtain further short-term funding to be able to restart and sustain production. As delivery of all parts needed to secure a production start is not yet agreed production will not resume on August 9 as intended and will be postponed until a full commitment on delivery plans can be secured.

Gunnar Brunius, Vice President of Production and Purchasing said: "I am positive about the progress we made on the payment terms with our suppliers and it is good to see that we all want to make it work. What we need now is a full commitment on supply of parts into our factory to be able to restart production and secure a stable manufacturing operation. We are now working hard with our suppliers to nail down these plans, commit to a delivery schedule and start building the close to 11,000 cars that we currently have in our order books. The industry-wide summer break at our suppliers caused certain key suppliers not to be able to supply us in time. Saab Automobile hopes to restart production earliest in week 35 provided that it is able to commit to a delivery schedule with its suppliers."

| Saab

Volkswagen Mexico starts production of the Volkswagen Beetle

Volkswagen has officially started production of the new Beetle in Puebla, Mexico. On this occasion Dr. Guido Westerwelle, the Federal Foreign Minister, Felipe Calderón, the Mexican President, and Hubert Waltl, Board Member for Production and Logistics at the Volkswagen Passenger Cars brand, visited the Volkswagen plant in Mexico.

“The Beetle is a strong symbol of our brand. It combines the emotional heritage of the original Beetle with the future of Volkswagen,” Hubert Waltl said in Puebla. “At the same time, the new Beetle and the engine plant we are building in Silao represent the great confidence we place in Mexico as a manufacturing location. As one of the main manufacturers of compact class vehicles, Volkswagen de México is a key building block in our growth strategy for North America.” Some 300 guests from politics and industry attended the ceremony in Puebla.


The Beetle wrote a success story in the USA in particular: That is where the mobility icon from Wolfsburg was sold almost five million times between 1949 and 1981. The New Beetle took up the thread of this Beetle Mania, with a total of 1.15 million units built in Puebla selling between 1997 and 2010. The latest Beetle celebrated its world premiere in April this year and will be in dealers’ showrooms in Germany from this fall.

The Puebla plant is the largest automobile factory in Mexico and one of the Volkswagen Group’s biggest vehicle manufacturing plants. It supplies North and South America as well as Europe with the new Jetta volume model. The Beetle and Golf Variant are built exclusively by Volkswagen de México for world markets. In 2010, the factory produced some 435,000 vehicles. Puebla also manufactures engines for the American continent and with its workforce of over 15,000 is one of Mexican industry’s largest employers.

| Volkswagen

100,000th van rolls out by SoVAB plant of Renault

The 100,000th big van rolled out of Renault's SoVAB plant (Société de Véhicules Automobiles de Batilly) in eastern France on Monday, July 11. The landmark figure speaks volumes for the vehicle's success, and orders for Renault Master have increased by 40 percent compared to the same period in 2010. The brand's 14 percent share of Europe's big van market up to end-May 2011 represents a rise of two points and 16 percent over the first five months of 2010. And this success isn't restricted to Europe either, since it is mirrored in the Euromed[1] region where the vehicle enjoys a market share of 17.9 percent (up 49 percent).

The SoVAB plant has pulled out all the stops to meet this growing demand which has resulted in full order books. Production rates have risen sharply, while 90 people were taken on during the first half of the year, allowing the factory to run two-and-a-half shifts. Everything is now in place for the unprecedented production rate of 600 vehicles per day to be reached by the last quarter of 2011.



"A remarkable team effort"
From New Master's launch to the availability of all 350 versions of the van in all its markets took a little more than one year, a remarkably short period of time given the immense challenge it represented in manufacturing terms. Indeed, while the broad variety of variants means that the needs of business customers are comprehensively covered, it has naturally made production more complex. "All those involved in the project produced a remarkable team effort," says Pierre Monflier, Factory Director. "Their unfailing commitment and motivation enabled us to make all 350 variants of New Master available in time. That's an achievement we can be proud of, and our biggest reward is the response of our customers which has resulted in full order books."

"The Renault network is a big plus!"
The 100,000th vehicle was delivered to the Colas Group which took delivery of its New Master at SoVAB's premises on Monday, July 11. Philippe Brissonneau, the Group's Equipment Director, explained his firm's choice of a New Master chassis cab which will go on to be converted into a dropside platform by Renault Tech: "We have worked with Renault for some years. Indeed, Renault is a fairly straightforward choice because our activity calls for reliable vehicles which match our needs at the lowest possible price. Renault has always met those requirements. We are convinced that this New Master will be even better than its predecessor, which is a vehicle we know very well. Being able to depend on Renault's network is obviously a big plus, too!"

Renault Master: an office on wheels
New Master is the third generation of Renault's big van. In addition to the range's breadth, the model features extensively revised, robust styling and sharply lower running costs (down 40 percent), thanks notably to the fuel efficiency of the new M9T engine which is made in Cléon, France. New Master is also more driver-friendly, while work has gone into stowage solutions and innovations like pivoting and retractable tables, Carminat TomTom Live navigation and Bluetooth connectivity that make the cabin a genuine office on wheels.

In addition to New Master's success with its customers, the model has also been acclaimed by the trade's professionals:

- Business Vehicle of the Year 2011 (L’Automobile et Entreprise, France).
- Utility Vehicle of the Year 2011 (L’Argus, France).
- Van of the Year 2011 in Denmark and Lithuania.
- Van of the Year 2011 (What Van?, Great Britain)
- Van of the Year 2010 (Van Fleet World Honours, UK).
- Transporter of the Year 2010 (Kep, Germany).

THE SOVAB FACTORY (Société des Véhicules Automobiles de Batilly)

- Established in France's Meurthe et Moselle region in 1979.
- 2,350 staff with unlimited-term contracts (as of May 31, 2011)
- 1,802,410 vehicles manufactured since 1980.
- The factory has manufactured Masters since the model's first generation in 1980
- It is the only factory to produce New Renault Master.
- SoVAB also assembles the New Opel Movano.

(1) Bulgaria, Maghreb nations, Romania, Turkey.

| Renault