March 10, 2005

Volkswagen exceeds earnings guidance despite difficulties

Wolfsburg, Germany – Despite unfavourable economic conditions in 2004, the Volkswagen Group exceeded the earnings guidance published in July 2004. At more than 2.0 billion Euro, operating profit was better than the forecast 1.9 billion Euro.

“This means that the Group has made significant progress towards improving its competitiveness,” said Dr. Bernd Pischetsrieder, Chairman of the Volkswagen Group’s Board of Management. The new model initiative, with eleven market launches in the passenger car segment, saw the Volkswagen Group increase its deliveries to customers year-on-year to approximately 5 million vehicles.

Reflecting on the improvement, the Board of Management and Supervisory Board proposed to pay an unchanged dividend on ordinary and preferred shares. “This reflects our confidence in the mid-terms prospects for the Volkswagen Group,” said Dr. Pischetsrieder.

Volkswagen assumes it will increase its worldwide customer deliveries in 2005 on the basis of over 20 new products and product variants, to be launched in the markets this year.

2004 was an eventful year for both the Volkswagen Group and the automobile industry as a whole. Key factors for Volkswagen included exchange rates, increased prices for commodities and materials such as oil and steel, and steps taken by the Chinese government to slow economic growth in that country. Despite this, Volkswagen was able to defend its market leadership in Western Europe, Germany and China. Germany remains its largest single market, with 943,136 vehicles delivered. The company had an 11.5 per cent share of the global market in 2004.

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