Business Development

(Condensed, in accordance with the German Commercial Code)

VEHICLE SALES

Volkswagen AG sold a total of 2,597,126 (2,584,375) vehicles in fiscal year 2018. Vehicles sold abroad accounted for a share of 71.0 (70.0)%.

PRODUCTION

Volkswagen AG produced a total of 1,113,415 vehicles at its vehicle production plants in Wolfsburg, Hanover and Emden in the reporting period (−9.1%).

EMPLOYEES

As of December 31, 2018, a total of 119,394 (117,420) people were employed at the sites of Volkswagen AG, excluding staff employed at subsidiaries. Of this figure, 5,009 (4,953) were vocational trainees. 4,785 (4,380) employees were in the passive phase of their partial retirement.

Female employees accounted for 17.3 (17.1)% of the workforce. Volkswagen AG employed 5,883 (5,069) part-time workers. The percentage of foreign employees was 6.3 (6.1)%. 83.2 (83.4)% of the employees in Volkswagen AG’s production area were in possession of vocational or additional training in the reporting period. The proportion of graduates was 19.5 (18.9)% in the same period. The average age of employees in fiscal year 2018 was 43.9 (43.6) years.

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EMPLOYEE PAY AND BENEFITS AT VOLKSWAGEN AG

€ million

 

2018

 

%

 

2017

 

%

 

 

 

 

 

 

 

 

 

Direct pay including cash benefits

 

8,175

 

70.6

 

7,637

 

70.7

Social security contributions

 

1,437

 

12.4

 

1,361

 

12.6

Compensated absence

 

1,350

 

11.7

 

1,161

 

10.7

Retirement benefits

 

611

 

5.3

 

640

 

5.9

Total expense

 

11,573

 

100.0

 

10,799

 

100.0

RESEARCH AND DEVELOPMENT

Volkswagen AG’s research and development costs as defined in the German Commercial Code increased to €5.6 (4.8) billion in the reporting period. 12,796 (12,332) people were employed in this area at the end of the reporting period.

EXPENDITURE ON ENVIRONMENTAL PROTECTION

When measuring expenditure on environmental protection, a distinction is made between investments and operating costs for production-related environmental protection measures. Of our total investments, only those that are spent exclusively or primarily on environmental protection are included in environmental protection investments. We distinguish here between additive and integrated investments. Additive environmental protection measures are separate measures upstream or downstream of the production process. In contrast to additive environmental protection measures, integrated measures reduce the environmental impact already during the production process. In 2018 we invested primarily in soil and water pollution control.

The recognized operating costs relate to measures that protect the environment against harmful factors by avoiding, reducing, or eliminating emissions by the Company. Resources are also conserved. For example, these include expenditures incurred to operate equipment that protects the environment as well as expenditures for measures not relating to such equipment. As in previous years, the emphasis in 2018 was on sewage and waste management.

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VOLKSWAGEN AG EXPENDITURE ON ENVIRONMENTAL PROTECTION

€ million

 

2018

 

2017

 

2016

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Investments

 

13

 

17

 

11

 

21

 

19

Operating costs

 

230

 

227

 

223

 

244

 

226

OPERATING COSTS FOR ENVIRONMENTAL PROTECTION AT VOLKSWAGEN AG 2018
Share of environmental protection areas in percent
Operating costs for environmental protection at Volkswagen AG 2018 (bar chart)

BUSINESS DEVELOPMENT RISKS AND OPPORTUNITIES AT VOLKSWAGEN AG

The business development of Volkswagen AG is exposed to essentially the same risks and opportunities as the Volkswagen Group. These risks and opportunities are explained in the Report on Risks and Opportunities.

RISKS ARISING FROM FINANCIAL INSTRUMENTS

Risks for Volkswagen AG arising from the use of financial instruments are the same as those to which the Volkswagen Group is exposed. An explanation of these risks can be found in the “Financial risks” chapter.

DEPENDENT COMPANY REPORT

The Board of Management of Volkswagen AG has submitted to the Supervisory Board the report required by section 312 of the AktG and issued the following concluding declaration:

“We declare that, based on the circumstances known to us at the time when the transactions with affiliated companies within the meaning of section 312 of the German Stock Corporation Act (AktG) were entered into, our Company received appropriate consideration for each transaction. No transactions with third parties or measures were either undertaken or omitted on the instructions of or in the interests of Porsche or other affiliated companies in the reporting period.”

The Annual Financial Statements of Volkswagen AG (in accordance with the German Commercial Code can be accessed from the electronic company register at www.unternehmensregister.de.