Brands and Business Fields

GROUP STRUCTURE

The Volkswagen Group consists of two divisions: the Automotive Division and the Financial Services Division. The Automotive Division comprises the Passenger Cars, Commercial Vehicles and Power Engineering business areas. We report on the Passenger Cars segment and the reconciliation in the Passenger Cars Business Area. The Commercial Vehicles Business Area and Power Engineering Business Area correspond to the segments of the same name. Activities of the Automotive Division comprise the development of vehicles and engines, the production and sale of passenger cars, light commercial vehicles, trucks, buses and motorcycles, as well as genuine parts, large-bore diesel engines, turbomachinery, special gear units, propulsion components and testing systems businesses. The Ducati brand is allocated to the Audi brand and thus to the Passenger Cars Business Area. The activities of the Financial Services Division, which corresponds to the Financial Services segment, comprise dealer and customer financing, vehicle leasing, direct banking and insurance activities, fleet management and mobility offerings.

In this chapter, we present the key volume and financial data relating to the Group brands and to Volkswagen Financial Services. In light of the considerable importance of the development of business in the world’s largest single market for the Volkswagen Group, we also report on business developments and the results of our activities in China in this chapter.

The production figures and deliveries to customers are differentiated by brand and their models that carry the corresponding brand logo. Unit sales figures contain vehicles sold by respective brand companies, including models of other Group brands. In some cases, there are marked differences between delivery figures and unit sales as a result of our business development in China.

KEY FIGURES BY MARKET

In fiscal year 2018, the Volkswagen Group generated an operating profit before special items of €17.1 (17.0) billion. Special items which resulted from the diesel issue weighed on the operating profit in the amount of €−3.2 (−3.2 ) billion.

Amid fierce competition in a challenging market environment, the Volkswagen Group lifted sales to a new record of 10.9 (10.8) million vehicles. Sales revenue increased by 2.7% to €235.8 billion.

In the Europe/Other markets region, we sold 4.7 million vehicles (+0.2%). Sales revenue amounted to €143.1 (142.8) billion. Negative exchange rate effects were offset by higher volume. The second half of 2018 was negatively impacted by the changeover to the WLTP test procedure.

In North America, Group sales stood at 0.9 million vehicles, a decline of 6.8% year-on-year. Sales revenue of €37.7 (37.7) billion was on a level with the previous year. Negative effects resulted from the decline in new vehicle sales and from exchange rates, while improvements in the mix and the financial services business, as well as revenue stemming from retrofitted used vehicles in connection with the diesel issue, had a positive impact.

In the markets of the South America region, we increased unit sales by 13.2% to 0.6 million vehicles. Volume and mix improvements increased sales revenue by 4.2% to €10.4 billion; exchange rate trends had a negative impact.

In the Asia-Pacific region – including the Chinese joint ventures – we sold a total of 4.6 (4.5) million vehicles in the reporting year. Sales revenue rose by 10.3% to €43.2 billion due to higher volumes and improvements in the components business at our fully consolidated companies. This figure does not include the sales revenue of our equity-accounted Chinese joint ventures.

Since the new accounting standard IFRS 9 was applied on January 1, 2018, income and expenses realized from hedging transactions relating to sales revenue in foreign currency have been allocated to sales revenue; in fiscal year 2018, hedging transactions increased the sales revenue of the Volkswagen Group by €1.5 billion.