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Volkswagen Increases First-Half Operating Profit by More Than 20 Percent

WOLFSBURG - July 23, 2008: The Volkswagen Group again significantly improved its operating profit in the first six months of the current fiscal year. At €3.4 billion, the Group's operating profit exceeded the prior-year figure by 21.8 percent. Europe's largest automobile manufacturer even recorded 31.3 percent growth in profit after tax to €2.6 billion. "This shows that we are on the right track. Our innovative products are meeting with an enthusiastic response from our customers", Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, said on Wednesday commenting on the half-year figures. "Volkswagen's successful model rollout, leaner processes and disciplined cost management are enabling us to grow profitably", said CFO Hans Dieter Pötsch.

Sales revenue rose by 3.0 percent to €56.5 billion. The Volkswagen Group increased vehicle deliveries to 3.27 million in the first six months, exceeding the previous year's delivery record by 5.8 percent. Its global market share climbed to 9.9 percent (9.6 percent) in the period from January to June.

All of the Group's individual brands also developed positively in the first six months. The Volkswagen Passenger Cars brand increased its operating profit by 32.0 percent to €1.3 billion. Negative effects from the unfavorable exchange rate situation were more than offset by the higher sales volume and lower fixed costs. Audi lifted its operating profit to €1.3 billion (€1.0 billion) on the back of improved sales and product cost optimization. This includes the figures for the Lamborghini brand that also developed positively. Škoda increased its operating profit to €381 million (€356 million). SEAT recorded an operating profit of €2 million following an operating loss of €7 million in the prior-year period. Volkswagen Commercial Vehicles grew its operating profit significantly by €94 million to €215 million. The Bentley brand achieved an operating profit of €85 million as in the previous year. The Financial Services Division again made a significant contribution to the Volkswagen Group's profit: at €523 million, its operating profit exceeded the previous year's level by €12 million.

Liquidity continued to improve in the Automotive Division, rising by 28.1 percent to €15.1 billion at the end of June. The ratio of investments in property, plant and equipment (capex) to sales revenue remained below the long-term average at 4.3 percent (3.3 percent). "This shows that we are continuing to pursue a policy of disciplined investment", said Pötsch.

The Board of Management remains confident about the rest of the year. "The operating environment has become tougher and is demanding considerable efforts from the automotive industry. This does not make it easy for us. However, we are well positioned and have the right strategy to master the tasks ahead of us", said Winterkorn. Volkswagen is moving into new market segments and selectively further expanding its product portfolio, he added. The Asia-Pacific, Central and Eastern Europe and South America regions will record the highest growth in demand for Group vehicles. "We are also constantly improving our processes and continuing to demonstrate disciplined cost management", confirmed Pötsch. The Board of Management therefore remains convinced that the Group will exceed the previous year's figures for deliveries, sales revenue and operating profit in 2008.

Volkswagen increased its share of the voting rights in Scania to 68.6 percent on July 22, 2008 when the key antitrust approvals were obtained. This means that Scania will be consolidated as the Group's ninth brand in the second half of 2008.