Report of the Supervisory Board

Dear Shareholders,

During the last fiscal year, the Supervisory Board dealt regularly and in detail with the situation and the development of the Volkswagen Group. In compliance with legal requirements and the German Corporate Governance Code, advice and support was provided to the Board of Management in questions relating to the running of the Company. In addition, the Supervisory Board was consulted directly with regard to all decisions of fundamental significance to Volkswagen.

The Board of Management provided the Supervisory Board with regular, complete and prompt verbal and written reports on all key issues for the Volkswagen Group relating to planning, the development of business, the position of the Group including the risk situation and risk management, and other matters. Furthermore, the Board of Management provided us with detailed monthly reports on the current business position and a forecast for the year as a whole. The Board of Management gave us a comprehensive verbal or written account of any variations from the defined plans and targets. Together with the Board of Management, we discussed the reasons for these variations so that suitable countermeasures could be taken.

The Supervisory Board held four ordinary meetings in 2006. In addition, the Supervisory Board held three extraordinary meetings during the year. Average attendance by Supervisory Board members was 98%. All members attended more than half of the meetings. Resolutions regarding urgent business transactions were adopted in writing by means of a circulated document.

COMMITTEE ACTIVITIES
In order to perform its duties, the Supervisory Board has established four committees: the Presidium, the Mediation Committee in accordance with section 27(3) of the Mitbestimmungsgesetz (German Codetermination Act), the Audit Committee and the Shareholder Business Relationships Committee (AfGA). The Presidium is composed of three shareholder representatives and three employee representatives. The remaining committees are composed of two shareholder representatives and two employee representatives. Membership of the committees at the end of 2006 is indicated in the chapter Executive Bodies.

The Presidium of the Supervisory Board met prior to each Supervisory Board meeting. The main topics discussed at these meetings were fundamental issues relating to corporate policy and management, as well as current developments in the commercial vehicles sector. The body also met for an additional meeting in order to finalize personnel changes in the Board of Management of Volkswagen AG.

The Mediation Committee was not required to convene during the year. The Shareholder Business Relationships Committee’s task includes the supervision of business relationships of Volkswagen AG and its Group companies with Volkswagen AG shareholders who hold at least 5% of voting rights. This also includes monitoring compliance with the business processes established by the Board of Management which were put in place to structure legal relationships with shareholders in accordance with agreements. The Committee met three times in 2006.

The Audit Committee held four meetings in 2006. These meetings were primarily concerned with the consolidated financial statements and risk management. The Audit Committee also dealt with the interim reports, matters relating to financial reports and their audit by the auditors.

TOPICS DISCUSSED BY THE SUPERVISORY BOARD
At our meeting on February 24, 2006, the Supervisory Board thoroughly examined and subsequently approved the annual financial statements of Volkswagen AG and the consolidated financial statements of the Group prepared by the Board of Management for 2005.

During the same meeting, we resolved to expand the Presidium of the Supervisory Board from four to six members. Dr. Wendelin Wiedeking, President and CEO of Dr. Ing. h.c. F. Porsche AG, and Mr. Bernd Wehlauer, Deputy Chairman of the Group and General Works Councils of Volkswagen AG, were appointed to the Presidium. Furthermore, audit firm KPMG submitted its final report on the incidents (front companies, embezzlement) in relation to which Volkswagen had filed criminal charges at the end of June 2005. KPMG provided us with extensive information on individual incidents and their impact and consequences. We also approved the retirement of some 41.7 million treasury shares. Finally, the Board of Management informed us about current considerations relating to Europcar.

On March 15, 2006, the Supervisory Board approved the sale of the Europcar subsidiary to the French investment group Eurazeo by means of a circulated document. At its meetings on April 19/20, 2006, May 2, 2006, July 18/19, 2006, and on September 15, 2006, the Supervisory Board concerned itself predominantly with strategic issues. The Board of Management explained concepts for improving the market position of the Group – particularly the Volkswagen Passenger Cars brand – in the USA, China and South America. We concurred with these concepts. The Supervisory Board authorized the Board of Management to continue negotiations with employee representatives and IG Metall with a view to improving the situation of the Volkswagen Passenger Cars brand. In addition, we examined the situation at the SEAT brand and concurred with the proposed measures. Furthermore, we approved the plans of the Board of Management to substantially expand substantially the Group´s involvement in Russia. In May 2006, we also set up the Shareholder Business Relationships Committee (AfGA).

The MAN/Scania issue was the subject of our meeting on October 15, 2006. We examined the situation in detail and unanimously backed an amicable solution for all concerned with the aim of merging MAN and Scania.

At the Supervisory Board meeting on November 17, 2006, we resolved unanimously to replace the Chairman of the Board of Management at the end of the fiscal year. We also discussed in detail the Volkswagen Group’s financial and investment planning for 2007 to 2009 and approved the Board of Management’s proposals. Furthermore, we approved the Board of Management’s plans to establish a production facility in India. At this meeting, the Supervisory Board also confirmed its endorsement of the merger between MAN and Scania.

CORPORATE GOVERNANCE AND DECLARATION OF CONFORMITY
The implementation of the German Corporate Governance Code at Volkswagen was discussed by the Supervisory Board at its meeting on November 17, 2006. In particular, we discussed the recommendations published by the “Government Commission on the German Corporate Governance Code” on July 24, 2006. On November 17, 2006, together with the Board of Management, we issued the declaration required under section 161 of the Aktiengesetz (German Stock Corporation Act) regarding compliance with the recommendations of the Code. This is permanently available on the Volkswagen AG website at www.volkswagen-ir.com. Further information regarding the implementation of the recommendations and suggestions of the German Corporate Governance Code can be found in our Corporate Governance Report and in the Notes to the Consolidated Financial Statements.

AUDIT OF ANNUAL AND CONSOLIDATED FINANCIAL STATEMENTS
The Annual General Meeting on May 3, 2006, appointed PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft as auditors for fiscal year 2006. The auditors audited the annual financial statements of Volkswagen AG, the consolidated financial statements of the Volkswagen Group and the combined management report. They issued unqualified audit opinions on all of these documents. The auditors also assessed the risk management system, concluding that the Board of Management had taken the measures required by section 91(2) of the German Stock Corporation Act to ensure early detection of any risks endangering the continued existence of the Company.

The documentation relating to the financial statements and the auditors’ reports was made available to all members of the executive bodies in good time for the Audit Committee meeting on February 27, 2007, and for the Supervisory Board meeting on March 2, 2007. At both meetings, the auditors reported extensively on the principal findings of their audit and were available to provide additional information if required.

Our own review of the consolidated financial statements of the Group, the annual financial statements of Volkswagen AG and the combined management report did not give rise to any objections. At our meeting on March 2, 2007, we therefore concurred with the auditors’ findings and approved the annual financial statements and the consolidated financial statements prepared by the Board of Management. The annual financial statements are thus adopted. We endorsed the proposal on the appropriation of net profit submitted by the Board of Management.

DISCLOSURES IN ACCORDANCE WITH SECTION 289(4) AND SECTION 315(4) OF THE GERMAN COMMERCIAL CODE (HGB) AND WITH SECTION 171(2), SENTENCE 2 OF THE GERMAN STOCK CORPORATION ACT (AKTIENGESETZ)
The provisions of the German Takeover Directive Implementation Act (Übernahmerichtlinie-Umsetzungsgesetz) included amendments to the German Commercial Code (HGB) and the German Stock Corporation Act (AktG). The detailed information now required for the following disclosures can be found in the combined Management Report:

• capital structure,
• shareholder rights/obligations,
• voting right limitations,
• shareholdings exceeding 10% of voting rights,
• composition of the Supervisory Board,
• legal requirements and requirements of the Articles of Association with regard to the appointment and removal of Board of Management members and to the criteria for amending the Articles of Association,
• the powers of the Board of Management, particularly concerning the issue of new shares and the repurchase of treasury shares,
• and the material agreements of the parent company that take effect in the event of a change of control following a take over bid.

This information has also been reviewed by the auditors. The Board of Management has explained the information in the combined management report. We have reviewed these explanations and endorse them.

MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
On January 18, 2006, Mr. Peter Mosch, Chairman of AUDI AG’s Central Works Council, was appointed a member of the Supervisory Board by court order to succeed Mr. Xaver Meier, who left on December 31. On January 25, 2006, Dr. Wendelin Wiedeking, President and CEO of Dr. Ing. h.c. F. Porsche AG, was appointed a member of the Supervisory Board by court order to succeed Lord David Simon of Highbury, CBE, who stepped down from the Supervisory Board on the same date. Dr. Gerhard Cromme and Dr. Klaus Liesen retired from the Supervisory Board at the end of the Annual General Meeting on May 3, 2006. The same Annual General Meeting elected Dr. Jürgen Großmann, Managing Partner of Georgsmarienhütte Holding GmbH, and Mr. Holger P. Härter, member of the Executive Board of Dr. Ing. h. c. F. Porsche AG responsible for Finance and Controlling, to the Supervisory Board for the first time.

At our meeting on November 17, 2006, we appointed Prof. Dr. Martin Winterkorn as Chairman of the Board of Management of Volkswagen AG effective January 1, 2007. At this meeting, we also resolved to remove Dr. Bernd Pischetsrieder from the Board of Management effective December 31, 2006.

At the Supervisory Board meeting on January 11, 2007, we appointed Prof. Dr. Jochem Heizmann to the Board of Management. Dr. Wolfgang Bernhard left the Company effective January 31, 2007.

We would like to thank the members of the Board of Management, the Works Council, the management and all the employees of Volkswagen AG and its affiliated companies for their efforts and achievements over the past year.

Wolfsburg, March 2, 2007

Ferdinand Piëch
Chairman of the Supervisory Board