Volkswagen and Related Companies Credit Ratings

Rating		Trend		Rating Action		Debt Rated
A (high)	Stable		Confirmed		Corporate Rating
(Volkswagen AG)
A (high)	Stable		Confirmed		Corporate Rating
(VW Credit Canada, Inc.)
R-1 (middle)	Stable		Confirmed		Commercial Paper
(VW Credit Canada, Inc.)
A (high)	Stable		Confirmed		Corporate Rating
(Volkswagen Canada Inc.)
R-1 (middle)	Stable		Confirmed		Commercial Paper
(Volkswagen Canada Inc.)

The above ratings for Volkswagen, based on the parent, Volkswagen AG
("VW" or the "Company") are confirmed as indicated. Despite slowing
industry sales volumes in most markets, the VW Group continues to
produce above-average results recording a 65% increase in pre-tax/extra
profit in 2000 and 16% in the first half of 2001. However, the earnings
outlook is becoming more cautious as a slowdown in Europe and North
America could offset any potential market share gains and efficiency
improvements that are expected. Global market share rose to 12.5% in the
first half of 2001 from 12.2% in 2000 due to gains in North America and
Eastern Europe and flat overall results in most other markets. The
Company has steadily raised market share over the past five years due to
a strong lineup of new vehicles. It has done this without the benefit of
an SUV offering, which will be coming in the near future under a joint
venture initiative with Porsche. Volume growth of 2.6% in the first half
of 2001 and 3.9% in 2000 was commendable but marked the lowest rise seen
during in the past five years reflecting slowing volume growth in Europe
(especially Germany which represents about one-fifth of volumes), North
America and a maturing model portfolio. Deliveries to customers have
been rising slower than production which raises concern about inventory
levels and the need for increased discounting. Being ranked fourth
globally, VW has the scale and diversity necessary to remain cost
competitive and independent. The financial profile remains strong as all
debt on the balance sheet is attributable to the sales financing arm.
Excluding the financing division, the automotive operations have net
cash (cash less total debt) of about euro 2.5 billion compared to euro
5.1 billion in 1999. Liquid assets are substantial, but it should also
be noted that VW has about DM17.6 billion in pension liabilities which
must be satisfied in the future.