Volkswagen Investor Conference Notes

Thoughts on Brazil

“[Interpreted] I’ll try to give you some information on the markets, Brazil and Russia. Our comments with Brazil, which saw a multitude of factors creating a less optimistic forecast or assessment of the market, first of all, you’ve got the economic development and trends, which are critical. Interests have risen sharply and consequently individual customers find it increasingly difficult to refinance their purchases. At the same time the government programs, I repeated, are have been phased out at end of the year, and the situation in the truck sales context are very difficult and the pre-conditions are no longer in place as we saw them before. And there is unrest in the country, so that we assess the situation as critical to tell you the truth, and the markets are contracting. This massively concerns passenger cars, and this is massively affects the truck business as well.

We assume that be downward trend will not continue with the steepness of that contraction of that weathering of the situation, whether this will be a long term problem, something I can’t tell you. However, it will not be months, we assume but this will remain a rocky ride of the next two to three years in terms of the economic framework conditions and the market in Brazil.

Let me add that Brazil is not alone. There is a continent which is of consequence, the situation in Argentina did nothing to help our business there, it’s not a very pleasant development there. We foresee in the foreseeable future that there will be a – see change in the trends. So there is a link with Brazil, with that market as well.

Thoughts on Russia

“When it comes to Russia, here we’re in a situation which not only politically speaking is caused by the causes we have in place for 18 months. We’ve seen the economic downturn, which continues accelerate even, that contraction up until the end of last year. We had the almost expected inflation run, let me put it that way. Customer said were simply before I leave the money in my pocket or buy something, a product, a good which make sense anyway to compensate for inflation, this is led to upfront purchases, proactive purchases up until the end of December. That brings us to a critical situation with negative growth rates throughout the market.”

” Russia reacts very quickly after economic downturns after going through the bottom – it recovers then very quickly and we’ll be ready for that.”