Wolfsburg, 2005-10-11
Planning of the Supervisory Board for the Group of Companies
The proportion of investment on physical fixed assets in the Automobile Division has remained at a constant level of about 6 percent.
The Supervisory Board of Volkswagen AG discussed the current financial overall planning for the group of companies at its meeting today. The main focus of this was measures to make a significant improvement in earning power and investment planning for the next three years.
Therefore, within the Automobile Division, investment during 2006 to 2008 will amount to 22.7 billion €. In addition to investment in physical fixed assets, this figure also includes accruals of development costs shown as assets and investments in financial fixed assets. 16.5 billion € of this will be used for investment in physical fixed assets. Since it has already been possible to reduce the proportion for investment in 2004 and 2005 significantly, it will continue to move at a competitive level of about 6 percent in the long term. This is an improvement on the planned figures which preceded the decision. “In this way, we are creating a necessary and important precondition for the targets we have set ourselves with the aim of improving results,” said Finance Chairman Hans Dieter Pötsch.
At 10.9 billion €, the group will be spending the greater part of the investment in physical fixed assets in the Automobile Division on the modernisation and extension of the product range within the planning period. This will focus on successors to existing models and new derivatives in almost all vehicle classes. In this way, the Volkswagen Group is continuing its model offensive consistently to cover the markets even more effectively. In the Power Unit Division, new generations of petrol engines will be introduced which will have advantages with regard to power, consumption and therefore emission values and the diesel particulate filter will be fitted on all engines. New products will be introduced into the range of automatic transmission systems available.
5.6 billion € have been budgeted for the non-product sector. As a consequence of the quality and cost targets, the new products require adaptations in the press plants, paint plants and assembly lines. Apart from fabrication, the majority of the investments are planned for the development, quality assurance, original parts supply and information technology departments. No expansion of fabrication capacity is planned. The area for consolidation does not include the joint venture companies in China. These companies will invest a total of 1.9 billion € between 2006 and 2008.Therefore our investments in China are also significantly below the figure previously planned, corresponding to the current market situation.
Extensive measures have already been introduced to improve the earning power of the group of companies. These include, for example, the agreements on manufacturing the compact SUV in Wolfsburg and the new shift models in Wolfsburg and Emden. Further considerable operational measures have also been included in planning within the scope of ForMotion plus, especially with regard to structural costs but also to optimise individual product lines and markets. “We are still maintaining the target announced for the Volkswagen Group of 5.1 billion € before tax for the year 2008 on the basis of these plans,” said Finance Chairman in conclusion. This would mean an improvement of 4 billion € compared with 2004.
Therefore, within the Automobile Division, investment during 2006 to 2008 will amount to 22.7 billion €. In addition to investment in physical fixed assets, this figure also includes accruals of development costs shown as assets and investments in financial fixed assets. 16.5 billion € of this will be used for investment in physical fixed assets. Since it has already been possible to reduce the proportion for investment in 2004 and 2005 significantly, it will continue to move at a competitive level of about 6 percent in the long term. This is an improvement on the planned figures which preceded the decision. “In this way, we are creating a necessary and important precondition for the targets we have set ourselves with the aim of improving results,” said Finance Chairman Hans Dieter Pötsch.
At 10.9 billion €, the group will be spending the greater part of the investment in physical fixed assets in the Automobile Division on the modernisation and extension of the product range within the planning period. This will focus on successors to existing models and new derivatives in almost all vehicle classes. In this way, the Volkswagen Group is continuing its model offensive consistently to cover the markets even more effectively. In the Power Unit Division, new generations of petrol engines will be introduced which will have advantages with regard to power, consumption and therefore emission values and the diesel particulate filter will be fitted on all engines. New products will be introduced into the range of automatic transmission systems available.
5.6 billion € have been budgeted for the non-product sector. As a consequence of the quality and cost targets, the new products require adaptations in the press plants, paint plants and assembly lines. Apart from fabrication, the majority of the investments are planned for the development, quality assurance, original parts supply and information technology departments. No expansion of fabrication capacity is planned. The area for consolidation does not include the joint venture companies in China. These companies will invest a total of 1.9 billion € between 2006 and 2008.Therefore our investments in China are also significantly below the figure previously planned, corresponding to the current market situation.
Extensive measures have already been introduced to improve the earning power of the group of companies. These include, for example, the agreements on manufacturing the compact SUV in Wolfsburg and the new shift models in Wolfsburg and Emden. Further considerable operational measures have also been included in planning within the scope of ForMotion plus, especially with regard to structural costs but also to optimise individual product lines and markets. “We are still maintaining the target announced for the Volkswagen Group of 5.1 billion € before tax for the year 2008 on the basis of these plans,” said Finance Chairman in conclusion. This would mean an improvement of 4 billion € compared with 2004.