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REPORT 2010
About this report
Contents                                                                       The business reports of the individual brands and compa-
This report contains information about the sustainability                      nies are available on their respective websites.
activities of the Volkswagen Group. It outlines strategic prin-
ciples and presents practical examples. The report is divided                  The period under review extends from 15 June 2009, when
into central chapters on Strategy, Economy, Society and                        the last report went to press, until March 31, 2011. The facts
Environment. The key sustainability indicators are set out                     in this report are constantly updated on the Internet. The
starting on page 56.                                                           next Sustainability Report will be published in the second
                                                                               quarter of 2012.
Scope
Unless otherwise indicated, the information in this report
relates to the entire Group, in which case we refer to the
“Group” or “Volkswagen Group”. When we use “Volkswagen”
on its own, we mean the Volkswagen brand.




   >>01 Internet concept
   This printed sustainability report is closely linked to the website volkswagenag.com/sustainability. The
   entire contents of the present report are also available there. The Internet content is constantly updated.


   This website also offers you a wealth of additional in-depth information: The >> 01 -numbers in the text of
   this report indicate a specific link. These sources are listed in the List of Links on page 78 (cover), with a
   brief indication of their contents. This List of Links can also be found on the website volkswagenag.com/        If you have a smartphone, this
   sustainability, where a click on the relevant link will take you to the appropriate information.                 code will take you straight to
                                                                                                                    the website volkswagenag.com/
   www.volkswagenag.com/sustainability                                                                              sustainability. The charges de-
                                                                                                                    pend on your individual mobile
                                                                                                                    call rates.




Indexes – Rankings – Awards

The Volkswagen Group is represented in all leading sustainability and corporate social responsibility (CSR)
indexes. Moreover, this report was prepared in accordance with internationally recognised reporting standards.
An overview of all indexes and awards can be found on page 68.


Furthermore, the selection of topics and our editorial processes and choice of indicators have been analysed and
verified by independent auditors and stakeholders. For further information, see the Back-up section starting on
page 72.
VOLKSWAGEN FINANCIAL SERVICES
                                                                AKTIENGESELLSCHAFT




Portrait of the Group
The Volkswagen Group, based in Wolfsburg, is one of the                       In 15 European countries and six countries in the Americas,
world’s leading automobile manufacturers and the largest                      Asia and Africa, the Volkswagen Group operates 62 produc-
automaker in Europe. In 2010 the Group increased the                          tion facilities (as of December 31, 2010). Around the world,
number of vehicles delivered to customers to 7.2 million                      nearly 400,000 employees produce more than 29,600 vehi-
(2009: 6.3 million), which equates to a global market                         cles per working day or provide vehicle-related services.
share of 11.4 percent. In Western Europe more than one                        The Volkswagen Group’s sales operations cover more than
fifth of all new cars (21.0 percent) were manufactured by                     150 countries worldwide. The Group’s aim is to offer attrac-
the Volkswagen Group.                                                         tive, safe and eco-friendly vehicles that set the global
                                                                              benchmark in their respective classes.
The Group’s sales revenue rose from €105.2 billion in 2009
to €126.9 billion in 2010. Profit after tax in the fiscal year 2010           At the end of 2010, the subscribed capital of Volkswagen AG
totalled €7.2 billion (2009: €0.9 billion). The Volkswagen                    comprised 295,045,567 ordinary shares and 170,142,778
Group owns nine brands from seven European countries:                         preference shares. Porsche Automobil Holding SE, Stuttgart,
Volkswagen, Audi, Škoda, SEAT, Bentley, Lamborghini,                          held 50.74 percent of the voting rights. The second-largest
Bugatti, Volkswagen Commercial Vehicles and Scania.                           shareholder was the State of Lower Saxony, with 20.0 percent
Each brand has its own distinctive character and operates                     of the voting rights. Qatar Holding LLC was the third-largest
autonomously in the marketplace. The passenger car port-                      shareholder with 17.0 percent, while Porsche Holding GmbH,
folio extends from economical compact cars to luxury high-                    Salzburg, held 2.37 percent. The remaining 9.89 percent
end models. In the commercial vehicle sector, the range                       were held by other shareholders. Information on production
starts with pick-up trucks and extends all the way to buses                   and deliveries of the main Volkswagen Group products can
and heavy-duty trucks.                                                        be found in the Annual Report 2010 on pages 108-123. > >01




VO L K SWA G E N G R O U P



   Data                                                                                  2010               2009


   Vehicle sales (units)                                                             7,278,440          6,309,743

   Production (units)                                                                7,357,505          6,054,829

   Employees at Dec. 31                                                               399,381             368,500

   Proportion of female employees (percent)                                               14.2               14.2

   Health index (percent)                                                                 96.7               97.5

   CO2 emissions, European new vehicle fleet (g/km)                                       144                151

   Direct CO2 emissions (kg/vehicle)                                                   175.19              234.67

   Energy consumption (MWh/vehicle)                                                       2.55               2.81


   Financial data (IFRS), € million                                                      2010               2009       Comments on the key
                                                                                                                       sustainability indicators
                                                                                                                       can be found in the Key
   Sales revenue                                                                      126,875             105,187
                                                                                                                       Indicators chapter of
   Operating profit                                                                     7,141               1,855      this report (page 56).
                                                                                                                       You will find revenue
   Profit before tax                                                                    8,994               1,261      and profit figures bro-
                                                                                                                       ken down by brand and
   Profit after tax                                                                     7,226                911       business field in our cur-
                                                                                                                       rent annual report. >>02
7,278,440                     vehicles
                                          sold
                                                                              399,381               employees
                                                                                                    worldwide




4.6   percent less CO2 emissions by
      EU new vehicle fleet (EU 27) than
                                                116     models with CO2 emissions of less than
                                                        120 g/km, including 20 with less than    8.4        percent more employees
                                                                                                            than in 2009
      in 2009                                           100 g/km > >04, >>05, >>06




            62      production plants, including 57 certified to inter-
                    national environmental management standards
                                                                              51,585             employees took part in training run
                                                                                                 by Volkswagen Coaching in 2010
                    such as ISO 14001 and EMAS; 4 plants are current-
                    ly preparing for certification >>03
Strategy   8

    Economy 20

      Society 28

 Environment 42

Key Indicators 56

      Back-up 72
By 2018 we’re aiming to be Number 1 –
     both economically and ecologically.




6
Dear Reader,

                        Responsible business management and commercial success are two sides of the same
                        coin. In the last two years the Volkswagen Group has again given an impressive demon-
                        stration of this fact. In a challenging environment we have continued to post solid
                        growth, enabling us to set new records in the 2010 financial year with 7.2 million vehi-
                        cles delivered and an operating profit of €7.1 billion.

                        Sustainability is and will remain the foundation of our corporate policy. One clear focus
  Prof. Dr. rer. nat.
Martin Winterkorn       is on “green” mobility. This is dictated by both social responsibility and sound business
                        thinking. In the last five years, for example, we have reduced our fleet’s CO 2 emissions
                        by 15 percent to 144 grams per kilometre. Today the Volkswagen Group’s portfolio
                        already includes 20 model variants with emissions of less than 100 grams of CO2 /km.
                        Tomorrow’s mobility will be determined by efficiency and diversity. Which is why our
                        Group, with the concentrated innovative power of its multi-brand alliance, is forging
                        ahead with the entire technology and powertrain spectrum: from optimised combustion
                        engines through lightweight design to electric drive. With our “one-litre” car XL1 we
                        have already demonstrated technologies that could go into series production in the
                        near future.
    Bernd Osterloh

                        Green mobility goes hand in hand with environmentally sound production processes.
                        The Volkswagen Group is making great efforts to further improve resource efficiency at
                        its 62 production facilities. Our new factory in Chattanooga is setting standards in this
                        respect. Equally high standards are characteristic of our worldwide labour relations:
                        our self-image as a fair employer and our established culture of co-determination have
                        proved to be anchors of stability and a clear competitive advantage. Moreover, success-
                        ful initiatives such as “A chance to play” in South Africa demonstrate that our social
                        commitment does not end at the factory gates.

                        In keeping with its responsibility for society, environment, employees and customers,
                        the Volkswagen Group continues to adhere to the principles of the United Nations Glob-
                        al Compact. The effectiveness of our sustainability strategy is confirmed by internation-
                        al indexes such as the Dow Jones Sustainability Index and the FTSE4Good, in which the
                        Volkswagen Group is again represented this year. Because sustainability calls for trans-
                        parency, we have had this report audited in accordance with the AA1000AS standard.
                        The Global Reporting Initiative (GRI) has again awarded us its highest rating “A+”.

                        Supported by corporate leadership that is sustainable in all respects, our 400,000 em-
                        ployees are dedicated to making the Volkswagen Group the world’s leading automaker
                        by 2018 – both economically and ecologically. And they are also working on the best
                        ideas for the next 125 years of automotive diversity.

                        See for yourself how far we have already travelled along this road. We trust you will find
                        informative insights into the world of Volkswagen on the pages of this report, and we
                        look forward to engaging in dialogue with you.




                        Prof. Dr. rer. nat. Martin Winterkorn	                                  Bernd Osterloh
                        Chairman of the Board of Management of Volkswagen Aktiengesellschaft	   Chairman of the General and Group Works Councils




                                                                                                                                               7
1   Strategie & Management

    Strategie 2018

    Management
       Strategy
    Herausforderungen
       Strategy 2018

       Sustainability management

       Materiality




8
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




Driving success.
Our strategy pursues a clear objective: By 2018 the Volkswagen Group is to be the world’s most
successful and fascinating automobile manufacturer – and the leading light when it comes to
sustainability. Our Strategy 2018 paves the way to this goal.




                                                                                                                                                    9
Globalisation has developed an enormous eco-        making an effective contribution to sustainable
                                          nomic momentum. This increases people’s             mobility – with technologies for the cleanest
                                          prospects of participation. Trade, transport and    and most economical cars. Job security and
                                          division of labour are the elementary driving       profitability are goals of equal importance in
                                          forces behind an economic development that          Volkswagen’s corporate activities.
                                          puts people in a position to raise their standard
                                          of living.
                                                                                              Volkswagen stays on course:
                                          If, as expected, the world’s population grows to    Strategy 2018
                                          more than nine billion by 2050, this means that     The Volkswagen Group has emerged safely and
                                          companies will have to satisfy the needs of bil-    with renewed strength from the worldwide cri-
                                          lions more people. These people need energy         sis that was triggered by the financial markets.
                                          and food, housing and mobility, education and       Deliveries were at an all-time high of 7.2 million
                                          healthcare.                                         vehicles. With growth of 13.7 percent, we outper-
                                                                                              formed the market as a whole and extended our
     Our Strategy 2018 focuses special    Technical progress and significant productivity     share of the global passenger car market to 11.4
     attention on the ecological orien-   increases, innovations and structural change        percent.
     tation and benefits of our vehicle   will help to achieve the necessary improve-
      projects. We will be setting new    ments. The guiding principle for the 21st centu-    With our “Strategy 2018” we are building con-
     ecological standards with regard     ry is sustainability. In other words, the way we    sistently on the company’s strengths and setting
       to vehicles, major components      manage our lives and the resources we consume       new goals. Attractive models and new vehicle
              and lightweight design.     must not reduce the opportunities available to      segments, plus innovative environmental tech-
                                          future generations.                                 nologies, are paving the way for increasingly
                                                                                              economical combustion engines and power-
                                          Sustainability is the foundation of Volkswagen’s    trains, for hybrid and electric vehicles, and for
                                          corporate strategy. This means that sustainabil-    future biofuels. The latest example is the pres-
                                          ity is integrated in the entire value-added pro-    entation of the XL1, a study with series-produc-
                                          cess. In the long term, corporate responsibility    tion potential which marks the third stage in the
                                          committed to the vision of sustainability safe-     evolution of the Volkswagen Group’s “1-litre” car
                                          guards the future viability of the company, while   strategy. Its plug-in hybrid system, lightweight
                                          respecting the need to harmonise economic,          design and impeccable aerodynamics enable
                                          environmental and social goals.                     the two-seater to manage on a bare 0.9 litres per
                                                                                              100 kilometres. That equates to CO2 emissions
                                          As a group with worldwide operations, Volks­        of just 24 g/km. Currently the world’s most
                                          wagen acknowledges this corporate responsi-         efficient vehicle and due to go into (limited)
                                          bility and devotes its entire innovative power to   series production in 2013, the XL1 underpins the
10
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




                                 St eering a cl ea r course



Volkswagen Group’s claim to play a leading         based on attractive vehicles that appeal to cus-           Gaining worldwide acceptance –
environmental role. Added to which there are       tomers in all parts of the world and meet the in-          while catering for regional
the electric vehicles “up! blue-e-motion”, “Golf   dividual regional requirements and cost targets.           differences.
blue-e-motion” and “Audi A1 e-tron”. Through       Our modular approach will be a great help in
its approach, the Group will be underlining the    this respect. In conjunction with our TSI® and
need for e-mobility to remain affordable.          TDI® engines, the innovative DSG® dual-clutch
                                                   gearbox and future electric powertrains, the
With these technological innovations, the Volks­   MQB will play its part in ensuring that the Volks­
wagen Group can build on a strong tradition        wagen Group meets its ambitious fuel consump-
and corporate culture that has always centred      tion and emissions targets. With its broad prod-
on a capacity for social and ecological change.    uct and segment coverage as a multi-brand
Through our corporate values we are committed      company, the Volkswagen Group is in an almost
to a sustainable and socially responsible course   unparalleled position to ensure very speedy
of action. For us, commercial success must in-     implementation of innovations in high-volume
variably go hand in hand with an intact environ-   brands and markets and thereby achieve sig­
ment and social responsibility.                    nificant improvements in efficiency. > 07
                                                                                         >

Our basic position remains that, as the Volks­     Above and beyond this, we also apply our techno-
wagen Group, we act responsibly towards our        logical expertise in the interests of other prod-
customers, our shareholders, our employees         ucts and services with the aim of safeguarding
and towards society.                               jobs, protecting the environment and boosting
                                                   our profitability. These include, for example,
Through our Strategy 2018 we are pursuing the      projects focused on the development and use of
long-term goal of firmly anchoring the Volks­      industrial engines or boat engines that combine
wagen Group among the most successful au-          superior motive power with excellent fuel con-
tomakers in the world. This applies to profita-    sumption figures and low emissions.
bility, customer satisfaction and quality, to
developing new markets and stepping up our         One milestone here is the incorporation of the
production volume, and to our attractiveness as    million-selling 2-litre natural-gas engine from
an employer.                                       the Salzgitter plant in the EcoBlue compact CHP
                                                   units. These are the packages contributed by
With a model portfolio geared to ecological        Volkswagen to the “Home Power Plant” devel-
principles and the strong position of its brands   oped by the power partnership with energy sup-
in the global marketplace, the Volkswagen          plier LichtBlick. The Home Power Plants are
Group will be systematically building on its       used by LichtBlick to realise an innovative, intel-
competitive advantages. Our growth strategy is     ligent heat and power supply concept. In the long
                                                                                                                                                     11
term, LichtBlick will be networking 100,000 dis-     Volkswagen will be providing increasing sup-
                                        tributed Home Power Plants to create Germany’s       port for its dealers as the vital link with the cus-
                                        largest virtual gas power station. The plants will   tomer and expanding its marketing measures.
                                        generate “swarm power” – so called because, as       The greatest long-term growth potential in this
                                        in a swarm of fish, many small units will be mov-    respect is to be found in Brazil, China, India,
                                        ing in the same direction – supplementing fluc-      Russia and the USA. Localising supplier rela-
                                        tuating wind and solar power generation as nec-      tions not only makes us less dependent on ex-
                                        essary. The heat produced will be stored and will    change rates, but enables us to contribute to
                                        be available locally for heating and hot water.      economic development and location upgrading
                                        The first Home Power Plants have already been        in the individual countries. And our suppliers
                                        installed at private and commercial customers in     are subject to the same ecological and social
                                        Hamburg. >   >35                                     standards as our own production facilities.

                                        We can only attain our ambitious goals as car-       The competence of our employees provides the
                                        makers if, in addition to our existing customer      basis for our business. Volkswagen will only be
                                        base, we succeed in attracting many new cus-         successful in mastering the present and future
                                        tomers all over the world. With this in mind,        challenges of the automobile manufacturing




The “1-litre car”
The XL1 prototype, which made its
debut at the Qatar Motor Show in
January 2011, is a milestone on the
way to sustainable mobility. With a
consumption of 0.9 l/100 km, the
XL1 only emits 24 grams of carbon
dioxide per kilometre. This is possi-
ble thanks to consistent lightweight
design using glass fibre-reinforced
plastic, perfect aerodynamics and
a plug-in hybrid system. The hybrid
system comprises a two-cylinder
TDI engine and an electric motor
coupled with a 7-speed DSG dual-
clutch gearbox and a lithium-ion
battery.

12
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




                                                  0.9                        litres is all the XL1 needs to
                                                                             go 100 kilometres.




sector if all employees – from apprentice to top       wagen brings together, under the heading of
manager – consistently deliver the outstanding         BlueMotionTechnologies, the best available con-
performance needed to safeguard the excellent          temporary environmental technologies. In the
quality of innovation and products in the Volks­       next few years we will be investing more than
wagen Group in the long term. Outstanding              €8 billion a year in developments such as the op-
performance, the resulting successes and par-          timisation of our existing TSI®, TDI® and DSG®
ticipation in the rewards are at the focus of Volks-   technologies, as well as the ongoing enhance-
wagen’s human resources strategy of being a            ment of our TSI® technology to run on natural
good and attractive employer and building a top        gas or as a flex-fuel powertrain. We will also be
team. Be it vocational training, continuing pro-       forging ahead with progress in the field of future          Improving the efficiency of
fessional development at home and abroad, a            biofuels. And finally we will be investing a great          conventional powertrains while
forward-looking remuneration policy or em-             deal of funds and effort in the electrification au-         forging ahead with electromobility.
ployee involvement: the Volkswagen Group al-           tomobiles. The success of electric powertrains
ways sets standards for good work in a process         depends to a very large extent on the batteries
of dialogue with its employees.                        employed, and this is an area where much pro-
                                                       gress still needs to be made. The topic is supple-
The advancement and professional develop-              mented by new mobility concepts that create an
ment of women in particular is a central princi-       attractive package of the various means of trans-
ple of personnel work at Volkswagen. We are            port and the ways they are used.
keen to encourage even more female graduates
to commit to engineering and scientific profes-        In other words, it will still be some time before
sions and play their part in shaping the car of        the paradigm shift to electric cars takes place.
the future. One example of our initiatives here        Here too, Volkswagen’s credo remains un-
is the “Woman Driving Award”.                          changed: we will settle for nothing less than of-
                                                       fering our customers the best solution. When
Our Strategy 2018 will take us forward along our       developing new vehicles, CO 2 emissions are a
charted course. In this context we assign top          key parameter. Consequently, at every stage of
priority to ecological relevance and sustainable       the product creation process, the CO2 emissions
commercial success. The initiatives that we            are determined for all vehicles, and every deci-
have already set in motion to boost productivity       sion in favour of a specific product is made with
and quality will continue undiminished. By ap-         a view to its impact on the climate. That way we
plying rigorous discipline in terms of costs and       can ensure that the objectives laid down in the
capital expenditure, we will put the necessary         Group’s Environmental Principles and in the
conditions in place for attaining our long-term        Environmental Goals of the Technical Develop-
earnings targets and ensuring a sustainable            ment Department are achieved.
high level of liquidity.
                                                       The Volkswagen Group’s maxim for its progress
For Volkswagen, “green mobility” means no less         towards its goal of most successful automaker is
than setting new ecological standards in automo-       to accept responsibility for people, the environ-
bile manufacturing in order to put the cleanest,       ment and society. In this way Volkswagen makes
most economical – and at the same time most            a substantial contribution to a world worth
fascinating – cars on the road. To this end Volks-     living in – today and for future generations.
                                                                                                                                                         13
Sustainability management                                      rate strategy focused on the long term, squaring
                                       For the Volkswagen Group, living up to our cor-                up to challenges which are not only economic,
                                       porate social responsibility (CSR) is a corporate              but also ecological and social in nature. >>08
                                       contribution to sustainable development. For
                                       us, CSR means voluntary acceptance of respon-                  Since 2006 our CSR Office has been responsible
                                       sibility for social concerns on a scale that goes              for coordinating corporate activities in the field
                                       beyond mere compliance with statutory regula-                  of CSR and sustainability management through-
                                       tions. With its integrated CSR concept, the                    out the Volkswagen Group. Its task is to deter-
                                       Volkswagen Group seeks to prevent risks, en-                   mine the strategic direction of CSR and opti-
                                       sure timely identification of growth opportuni-                mise sustainability management activities.
                                       ties and enhance the company’s reputation. As
                                       a whole, CSR management and sustainability                     In 2010, with the aim of strengthening manage-
                                       management make an important contribution                      ment processes, the CSR Steering Group and
                                       to safeguarding the long-term future of the com-               the Sustainability Reporting Group were com-
                                       pany and increasing its value over time.                       bined to form the CSR & Sustainability Steering
                                                                                                      Group. The CSR & Sustainability Office reports
                                       Model of Sustainable Development                               to the CSR & Sustainability Steering Group,
                                       We have formulated the principles of sustainable               which consists of representatives of all central
                                       business in our Model of Sustainable Develop-                  corporate departments at top management level
                                       ment. For us this is the benchmark for a corpo-                plus the Group Works Council.


                                                                                                                    Management            Steering group




                                                                                    Group Board of Management


                                             CSR & Sustainability Steering Group                                      CSR &
                                                                                                                      Sustainability Office
                                             Strategic goals and statements on
                                             CSR and sustainability

                                             Definition of Group-wide steering indicators
                                             for CSR and sustainability

                                             Commissioning and approval of
                                             sustainability reporting



                                             CSR & Sustainability – Project teams                                     Brands and regions
     In 2010 management processes
                                             Interface for CSR sustainability fields and topics                       Annual conference
     were strengthened by merging
                                                                                                                      w
     the CSR Steering Group and the          Evaluation and development of stakeholder dialogue

     Sustainability Reporting Steer-         Sustainability reporting / Corporate profiles for rankings
       ing Group to form the CSR &
      Sustainability Steering Group.

14
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




                                                                 1      unit brings together the various
                                                                        sustainability management bodies.




The aim of the Steering Group’s work is to foster     opment of German Business – and in various                 Sustainability is measurable...
networks linking internal functions and               working groups on issues such as “Making sus-
strengthen the sharing of information between         tainability measurable” and “Sustainability in
specialist departments. Our CSR project teams         the supply chain”.
carry out cross-functional work on topical issues
such as the enhancement of Group sustainability       Stakeholder involvement
reporting; since the creation of a Group-wide         As a good “corporate citizen” we are committed
CSR body in 2009 there has been a regular inter-      to an ongoing dialogue with our stakeholders.
national exchange of information with the CSR         Since 2002 Volkswagen has supported the Glob-
coordinators of the brands and regions.               al Compact (GC) initiated by former UN Secre-
                                                      tary General Kofi Annan. With over 7,000 com-
One central field of activity is the establishment    panies in more than 135 countries, this is the
of an IT-based CSR key indicator system cutting       world’s biggest and most important CSR initia-
across regional and brand boundaries. During          tive. Its goal is to bring about a fairer and more
the last financial year we successfully completed     sustainable global economy. Volkswagen plays
the first phase of the introduction of this key in-   an active part in ensuring that this goal is
dicator system. We are now in a position to steer     achieved.
CSR activities more efficiently, making them
more transparent and more successful. This has        The GC is based on ten principles relating to hu-
created an important foundation for up-to-date        man rights, labour standards, environmental
CSR and sustainability reporting by the Group.        protection and anti-corruption measures. In
In the second phase we are rolling out the key        2010 Volkswagen continued to align its business
indicator system across the brands and regions.       activities with these principles at all locations.
Thus Volkswagen is meeting its stakeholders’          We make our know-how available within the GC
increasing expectations with regard to differen-      so that other companies also have a chance to
tiated, up-to-the-minute reporting of the             live up to their global responsibility. The pro-
Group’s performance in the fields of CSR and          gress made by Volkswagen as a result of its ac-
sustainability.                                       tive participation in the GC is documented in an
                                                      annual report.
The Volkswagen Group contributes its experi-
ence and competence to the business sector’s          Here are two examples: Volkswagen participates
CSR networks at national, European and inter-         in the GC project “Supply Chain Sustainability”.
national levels and supports the projects initiat-    The results of the project were brought together
ed there. One important task is to prepare in-        in a manual and presented at the GC summit in
formation on ecological and social standards          New York in June 2010. In addition, the interna-
for suppliers. For this purpose the online portal     tional GC Yearbook contained a report on the
of CSR Europe, the leading European business          sustainability project for water utilisation in the
network for corporate social responsibility, pro-     mountain region of Izta-Popo in Mexico, which
vides an important communication platform             was run by Volkswagen de México. We also pre-
that enjoys international recognition. We are         sented the project at the world biodiversity sum-
also actively involved in the steering body of        mit in Nagoya in September 2010. > 09>
“econsense” – the Forum for Sustainable Devel-

                                                                                                                                                       15
Together with the German Nature and Biodiver-                   Sustainable Development of German Business
                                           sity Conservation Union (NABU – Naturschutz-                    (econsense) and the World Business Council for
                                           bund Deutschland) we play a part in specific en-                Sustainable Development (WBCSD). One exam-
                                           vironmental protection projects. In the course                  ple of this is the study “Vision 2050: a new agen-
                                           of this cooperation we raise society’s awareness                da for businesses” presented by the WBCSD in
                                           of environmental and sustainability issues, for                 2010, which Volkswagen supported in the field
                                           example through jointly-run fuel-saver courses.                 of sustainable mobility in particular. Based on
                                           With our incentive systems for fleet operators                  the assumption that the Earth’s population will
                                           we also create additional arguments for eco-                    grow to around nine billion people by 2050, the
                                           friendly mobility.                                              study describes ways of making more sustaina-
                                                                                                           ble and more efficient use of the existing re-
                                           Guidelines                                                      sources. A total of 29 global companies in vari-
                                           Along with our Code of Conduct, further key ref-                ous industries were involved in preparing and
                                           erence points for our corporate strategy are the                discussing the study in numerous workshops.
                                           Convention of the International Labour Organi-                  On the way to sustainable mobility it is only by
                                           sation (ILO) and the OECD Guidelines for Multi-                 taking a longer-term view of the future that we
                                           national Enterprises. We are also actively in-                  will be able to integrate underlying sociological
                                           volved in CSR Europe, the Forum for                             and technological trends into our research and




                                                                                                                              Intl. conventions      Human rights

                                                                                         Declaration on Fundamental Principles and Rights at Work, 1998 (especially
     Principles: Excerpt from the Code of Conduct
                                                                                         the following topics: abolition of child labour; elimination of forced or
     As well as the laws and regulations of individual countries, there are a number     compulsory labour; ban on discrimination; freedom of association; and the
     of conventions and recommendations drawn up by international organisa-              right to collective bargaining)
     tions. They are primarily addressed to the member states, not to individual        • 	OECD Convention on Combating Bribery of Foreign Public Officials in
     companies. They do however constitute important guidelines for the                  International Business Transactions, 1997
     behaviour of an international group and its employees. We therefore attach         • 	“Agenda 21” on sustainable development (final document of the ground-
     great importance worldwide to ensuring that our corporate activities are in         breaking United Nations Conference on Environment and Development,
     keeping with these guidelines. The main conventions of this kind are listed         Rio de Janeiro 1992)
     below:                                                                             • 	Principles of the Global Compact for more social and more ecological
     • 	The Universal Declaration of Human Rights, dating from 1948 (UNO),               globalisation, 1999
      and the European Convention on Human Rights (formerly Convention for              • 	OECD Guidelines for Multinational Enterprises, 2000
      the Protection of Human Rights and Fundamental Freedoms), 1950
     • 	International Covenant on Economic, Social and Cultural Rights, 1966            We also profess our commitment to the “Declaration on Social Rights and
     • 	International Covenant on Civil and Political Rights, 1966                      Industrial Relationships at Volkswagen” (Volkswagen Social Charter) and the
     • 	Tripartite Declaration of Principles Concerning Multinational Enterprises and   Charter on Labour Relations concerning fundamental social rights and
      Social Policy, ILO (International Labour Organisation) 1977, and ILO              principles. > 10
                                                                                                     >


16
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




                                            124                        studies were evaluated to select
                                                                       the topics in the materiality matrix.




development activities. It was with this in mind       sis were not only presented to internal steering
that Volkswagen Group Research formulated its          bodies, such as the Corporate Strategy Group,
“Research Visions” in 2010. The topics are mobil-      but also discussed with external stakeholders,
ity, energy, the driving experience, safety, cost-     for example the German Nature and Biodiversi-             A cross-functional team evaluated
effectiveness in the product life cycle, and the en-   ty Conservation Union (NABU). They then un-               internal and external sources to
vironment. And with our Environmental Radar            derwent further revision and specification in             identify the most important sus-
we have also created a separate early-warning          the light of comments. This procedure enabled             tainability issues. Their findings
system for evaluating ecological risks.                us to achieve further improvements in the                 were discussed with independent
                                                       transparency and quality of our agenda.                   stakeholders.
In our day-to-day work we attach great impor-
tance to prudence in addressing potential
environmental and sustainability risks to the
company. To this end we have installed a risk
management system that enables us to identify
new risks and minimise existing ones. More-
over, the Supervisory Board has established an
Audit Committee that is particularly concerned
with accounting, risk management including
the internal audit system, and compliance is-
sues. > 19
       >



Materiality
On the basis of our main topics in the Strategy
2018 and a broad evaluation of recent interna-
tional sustainability analyses, we set in motion
an internal discussion and filtering process to
identify issues that are of priority importance
for us. Major external sources included interna-
tional studies in the fields of politics and re-
search, financial market analyses and position
papers published by NGOs. Using a multi-stage
scoring system we finally arrived at a short list
of the most important topics. The main classifi-
cation criteria were stakeholder expectations on
the one hand and importance for the company’s
performance on the other. Another aspect taken
into account was Volkswagen’s capacity as an
automaker to impact these issues. >    >11

A cross-functional team was set up to prepare
this materiality matrix. The results of the analy-
                                                                                                                                                       17
Efficient productionEmployment
                                Efficient powertrains
                                        Localisation
                    Climate protection & energy efficiency
                       Economic stability            e-mobility          Raw materials & resource efficiency




                          Social responsibility
                       Compliance Mobility concepts
                                                                        Biodiversity

                               Demographic change          Air quality

                            Diversity
                                               Water              Human rights
                      Market shifts                            Health

                                                    Food

                    Land take
                                            Segment shifts
                Urbanisation
                       Noise

     Urban mining




18
St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t




          Customer satisfaction
                           Supplier relations


and fuels
STAKEHOLDER EXPECTATIONS




                                                                     Water             Compliance          e-mobility          Employment              Supplier            Customer
                                                                                                                                                       relations           satisfaction
                                                                     Diversity         Social                                  Localisation
                                                                                       responsibility
                                                                     Human                                                     Climate protection &
                                                                     rights            Mobility concepts                       energy efficiency
                                                                                       Biodiversity                            Efficient powertrains
                                                                                                                               and fuels
                                                                                                                               Efficient production




                                                                                       Air quality                             Raw materials &
                                          Food        Health
                                                                                       Demographic                             resource efficiency
                                                                                       change                                  Economic
                                                                                                                               stability
                           Noise          Land take




                           Urban mining               Urbanisation




                                                                        Segment   Market
                                                                        shifts    shifts
                                                                                                               IMPORTANCE FOR BUSINESS SUCCESS




           The materiality matrix is the result of the analysis                            rant should not by any means be seen as unimportant
           and scoring system mentioned earlier. It is the main                            within the general sustainability agenda: either they
           thread running through our sustainability topics and                            are largely beyond our control or they do not yet have
           projects, and hence a frame of reference for further                            any significant influence on the company’s perfor-
           descriptions in this sustainability report. The main                            mance. More detailed information, e.g. about the defi-
           topics are shown in the highlighted quadrant. Our pro-                          nitions of the individual topics and the classification
           jects and related measures are described in the chap-                           criteria, can be found via the online link. > 11
                                                                                                                                        >
           ters that follow. Topics not represented in this quad-



                                                                                                                                                                                          19
2    Strategie 2018

     Management

     Herausforderungen
                       Economy
     Strategie & Management
                       Customer satisfaction

                       Supplier relations

                       Raw materials

                       Localisation

                       Compliance

                       Economic stability




20
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




Making business sustainable.
For a company to achieve sustainable development it must first achieve commercial success. Because
only a successful company can shape all its processes itself and ensure they are sustainable throughout.
Only a successful company can make substantial investments in environmental protection and the
development of sustainable products and solutions. And finally, only a successful company can offer its
employees secure prospects for the future.




                                                                                                                                                     21
Ev
                                                                    er y sm
                                       It is our customers who determine the Group’s         department promptly translates this input into
                                       success – millions of times a day. Not just when      new design solutions, which are incorporated
                                       29,000-plus vehicles are handed over to their         into facelifted or new models. As a result, we are
                                       new owners, but every time someone drives one         able to adapt to and keep pace with changing cus-
                                       of our cars, fills the tank or visits a workshop.     tomer requirements. One of the latest examples
                                       The more often a satisfied smile appears on the       is the new Jetta in the USA, which was developed
                                       faces on our customers in the process, the bet-       in direct response to customer feedback.
                                       ter it is.
                                                                                             We also take a proactive approach to reducing
                                                                                             the risk of incorrect operation of our vehicles by
                                       Customer satisfaction                                 customers – and the associated risk of customer
      Customer satisfaction is the     That explains why we consider customer satisfac-      dissatisfaction. In this connection we also incor-
     decisive factor in assuring our   tion a crucial factor in our sustainable corporate    porate customer feedback into our product com-
                long-term success.     success and have made it the core of our corpo-       munication at dealerships. In the USA, the IQS
                                       rate Strategy 2018. That is the year by which we      Challenge training programme for sales person-
                                       are aiming to rank among the three leading com-       nel combines specifically sales-related training
                                       panies in all our markets. To measure our pro-        with technical training delivered by representa-
                                       gress, we refer to the findings of two strategic      tives from the vehicle-manufacturing plants.
                                       studies: the New Car Buyer Study (NCBS) and the       This equips sales personnel to give technically
                                       International Aftersales Customer Satisfaction        sound and to-the-point advice that increases the
                                       Study (IACS). Our interim goal for 2012 is to be at   customer’s interest in the technical features of
                                       least among the top five in all our markets.          the vehicle. This will also reduce the likelihood
                                                                                             of incorrect operation – thereby increasing satis-
                                       Volkswagen measures three different categories        faction with the product.
                                       of customer satisfaction: satisfaction with the
                                       purchasing process, satisfaction with the prod-       We have been analysing customer satisfaction
                                       uct and satisfaction with the most recent work-       for many years. In 2011, the number of markets
                                       shop visit.                                           around the world where customer satisfaction
                                                                                             analysis is carried out increased to 19. In the case
                                       The data is obtained from various sources: from       of the Volkswagen brand for example, that means
                                       day-to-day market analysis, from asking custom-       we are now obtaining customer feedback on
                                       ers about their needs, at customer workshops,         more than 90% of all cars we ship. Current
                                       and from analysis of online discussion forums         customer satisfaction levels are reported to the
                                       using web-tracking tools. We then actively inte-      Board of Management via the customer satisfac-
                                       grate this customer feedback into the product de-     tion forum up to six times a year. >> 12, >> 13
                                       velopment process. The Technical Development                                                     page 24

22
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




                                                                           n t s
il e co u
What customers want
Many different things can raise a smile. And in cars in particular, so many different factors determine how happy a customer is with the
vehicle. Everyone has their own personal preferences, be it in terms of equipment levels or accessories. But customers who buy cars
from the Volkswagen Group expect them to display high quality, reliability and economy, combined with high levels of comfort and
convenience, safety and environmental compatibility.

Comfort and convenience                        Safety                                            Environmental compatibility
Active safety systems such as the Electron-    A sustainable vehicle must also enhance           The efficient cars built by the Volkswagen
ic Stability Program (ESP), Lane Assist        safety for its occupants. With their crash-       Group stand for low CO2 emissions. The
and ACC automatic distance control with        resistant bodies and intelligent safety sys-      aim is to produce a fuel consumption lead-
Front Assist Ambient Traffic Monitoring        tems, the cars built by the Volkswagen Group      er in every class of vehicle. We also set the
all help to make the driver’s task easier in   lead the field in this respect. We are contin-    highest standards in terms of the materials
complex driving situations. The drowsi-        uously working on new ways to improve our         we select, our production processes and
ness monitor warns drivers if it detects       passive safety systems. In 2010, we equipped      when it comes to recycling, because an
signs of fatigue because steering inputs       the Sharan and Passat with a safety package       end-of-life vehicle is a source of raw mate-
have become very infrequent. Our lighting      consisting of an optimised body structure         rials: up to 95 percent of a car by weight can
and vision systems help drivers see better     and a highly effective belt-and-airbag com-       today be recycled or recovered. Along with
at night by providing optimal illumina-        bination. Both vehicles received 5 stars in       fuel-efficient cars built by environmentally
tion, whether for long-range vision, cor-      the NCAP crash test, which means they are         compatible production methods, another
nering or making a turn. Dynamic Light         among the safest in their class.                  increasingly important aspect is an envi-
Assist is an assistance system which dips                                                        ronmentally aware style of driving. Our fu-
just certain portions of the high beam, to     To help prevent accidents, first we have to       el-saver driving courses are conducted by
prevent other road users being dazzled,        know what causes them. With this in               'Volkswagen driving experience'. On top of
while the Area View camera system allows       mind, Volkswagen has been investing in            this, since 2003 5,000 people have attend-
the driver to monitor the entire vehicle       accident research since the early 1990s,          ed the fuel-saver training sessions we offer
periphery. By providing the best possible      not only in Germany, but also in China            in conjunction with the German Nature
assistance in tricky driving situations, for   and India. To facilitate the effective ex-        and Biodiversity Conservation Union
example when pulling into or out of a          change of the latest research findings be-        (NABU).
parking spot on a busy road, our driver as-    tween industry and public research insti-
sistance systems also help to avoid acci-      tutions, in 2010 the Group’s Volkswagen,          For further details on environmental pro-
dents. One thing all these systems have in     Audi and Porsche brands joined with BMW           tection and resource conservation in the
common, however, is that they always           and Daimler to form the “Trauma Biome-            Volkswagen Group can be found starting on
leave the final decision up to the driver.     chanics” research network at Regensburg           page 42.
 14
                                              University of Applied Sciences.  14


                                                                                                                                                         23
Ethnic marketing                                      procurement process and a supplier monitoring
                                           Since 2005 Volkswagen AG has been successful-         and development process. The sustainable supply
                                           ly engaged in ethnic marketing in the form of         chain policy applies to all brands and all regions.
                                           the project “Volkswagen speaks Turkish”. The          Its effectiveness is continuously reviewed and
                                           essence of the project is that in all forms of mar-   assessed, and new purchasing employees are
                                           keting, it caters for the cultural and ethnic tra-    trained to be aware of the policy right from the
                                           ditions of the Turkish population in Germany. It      start.
                                           is intended to demonstrate the high regard
                                           which Volkswagen AG has for its Turkish-born          Our international “Sustainable Procurement Net-
                                           clientele in Germany.                                 work” ensures that the principle of sustainability
                                                                                                 is applied throughout the Group, despite cultural
Along with meeting customer wish-          The pillars of this project are Turkish-speaking      differences. The supplier integration strategies
es regarding their vehicles, respect-      sales staff as the most important actors in car       are incorporated into action plans and regularly
     ing traditional cultural influences   sales and the direct points of contact for the cus-   reviewed. Following the successful supplier devel-
      is another key factor in ensuring    tomer – which of course means all customers,          opment project in 2009, a second series of events
                   satisfied customers.    regardless of their ethnic origins, since these       in India was held in 2010. Further supplier devel-
                                           sales staff speak German equally well. The            opment projects also took place in Brazil, Argen-
                                           ethnic marketing project also means that a            tina and Mexico. In line with this continuously
                                           growing group of certified sales staff of Turkish     evolving system, when submitting a quote, all
                                           origin are being offered good career prospects        suppliers must declare that they agree to abide by
                                           at Volkswagen dealerships. These jobs are             Volkswagen’s sustainability requirements. Since
                                           coupled with excellent training in keeping with       2010, supplier sustainability information has
                                           Volkswagen’s acknowledged high standards,             been electronically catalogued.
                                           and they offer unique career opportunities for
                                           these young German Turks as an important              From the second quarter of 2011, global supplier
                                           basis for successful integration. In this way the     development will be supported by a development
                                           project makes an important contribution to cul-       module which suppliers will find on the online
                                           tural diversity at Volkswagen; it is also supported   platform www.vwgroupsupply.com. Development
                                           by the Works Council. It effectively fosters mutu-    workshops will also be held in selected regions.
                                           al understanding and trust between Turks and           16,  17,  18,  65
                                                                                                                 
                                           Germans at both employee and customer level,
                                           and is thus an active expression of progressive
                                           integration and cultural diversity.  15             Raw materials
                                                                                                 Volkswagen depends on reliable supplies of
                                                                                                 strategically important high-grade raw materi-
                                           Supplier relations                                    als, especially metals. For this reason the
                                           Sustainability in the supply chain has been a key     Group’s Environmental Research Department,
                                           focus of the Group Purchasing department since        in conjunction with the Federal Institute of Geo-
                                           2006. Volkswagen’s sustainable supply chain pol-      sciences and Raw Materials (Bundesanstalt für
                                           icy comprises four main components: sustaina-         Geowissenschaften und Rohstoffe – BGR), has
                                           bility requirements for suppliers, an early warn-     developed a system of criteria and indicators for
                                           ing system for minimising risk, a transparent         systematic analysis of the raw materials markets.
24
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




                      2006
                                                                 was when Volkswagen made its
                                                                 “Sustainability in Supplier Relations”
                                                                 concept a top priority for the Group
                                                                 Purchasing function.




In addition to risk factors, this also observes        ther business development in a timely manner.               The Board of Management is kept
and assesses the extraction of raw materials in        This means that the Board of Management al-                 fully informed of the current risk
politically unstable countries to make sure that       ways has access to an overall picture of the cur-           position.
it is socially acceptable. In this context, Volkswa-   rent risk situation through the documented re-
gen seeks to engage in dialogue with NGOs such         porting channels.
as the Extractive Industries Transparency Initi-
ative (EITI). The EITI supports a standardised         We are prepared to enter into transparent risks
process in which payments by the raw materials         that are proportionate to the benefits expected
industry to the government are disclosed and           from the business.  19
then verified by independent validators. This
helps to curb corruption, thereby improving the
economic and social climate and maximising             Localisation
protection of the environment in the country in        A central element of our strategy is the localisa-
question.                                              tion of production and supplier relations and, in-
                                                       creasingly, of financial services. Localisation not
                                                       only enables us to reduce foreign exchange risks
Risk management                                        and achieve cost levels appropriate to the mar-
The Group’s risk management system is de-              kets, but also to inject extra added value into
signed to identify potential risks at any early        growth markets. This generates considerable
stage so that suitable countermeasures can be          momentum for the economic development of the
taken to avert the threat of loss to the Company,      individual regions. Localisation means creation
and any risks that might jeopardize its contin-        of jobs in the regions in question. This upgrades
ued existence can be ruled out.                        the locations where our facilities are based and
                                                       paves the way for follow-up activities. Secondary
The risk management system is an integral part         and tertiary effects have a positive overall impact
of the Volkswagen Group’s structure and work-          on the infrastructure in general. Decisions to lo-
flows and is embedded in its daily business pro-       cate production facilities – and thus the relevant
cesses. Events that entail a risk are identified       suppliers – in a specific place give rise to new al-
and assessed on a decentralized basis in the di-       liances with schools and universities, for exam-
visions and at the investees. Countermeasures          ple, and attract further service-sector compa-
are introduced immediately, their effects are as-      nies.
sessed and the information is incorporated into
the planning in a timely manner. The results of        The overall impact is to invest such a region – be
the risk management process are used to sup-           it in Chattanooga or Pune, in Kaluga or Chengdu
port budget planning and controlling on an             – with a new quality. For the Volkswagen Group,
ongoing basis. The targets agreed in the budget        localisation not only has economic benefits; it
planning rounds are continually verified in re-        also improves the prospects of sustainable struc-
volving planning reviews.                              tural development in the regions concerned.

At the same time, the results of risk mitigation
measures that have already been taken are in-
corporated into the monthly forecasts on fur-
                                                                                                                                                           25
Compliance                                                                      The Ombudsman system, introduced through-
                                   In 2010, we heightened our focus on transpar-                                   out the Group in 2006, has also become success-
                                   ent corporate responsibility, creating the new                                  fully established. Through this system, two in-
                                   Governance, Risk  Compliance unit. The head                                    dependent lawyers are available as ombudsmen
                                   of the unit is also the Group Chief Compliance                                  to all employees via an international hotline.
                                   Officer of the Volkswagen Group, reporting di-                                  The lawyers are bound by their obligation of se-
                                   rectly to the Chairman of the Board. His respon-                                crecy.
                                   sibilities include the introduction, control and
                                   monitoring of preventive measures.                                              Further employee training and information
                                                                                                                   events are planned for 2011. These will include
                                   We have drawn up a corporate Code of Conduct,                                   measures and events aimed at specific target
                                   which was rolled out across the Group in 2010.                                  groups as part of the new Compliance Pro-
                                   Employees were made aware of this through                                       gramme, focusing on anti-trust and competition
                                   brochures, in the internal media and at infor-                                  law. Additional compliance activities will also be
                                   mation events. All employees are able to contact                                devised in future, and the Compliance organisa-
                                   the Compliance organisation via an internal                                     tion will be further expanded.  20
                                   e-mail address.  21

                                   As an anti-corruption measure, Volkswagen has
                                   been using an online learning program since
                                   2009, designed specifically to increase employ-
                                   ee awareness. This program was rolled out to
                                   management and other employee groups of
                                   Volkswagen AG and also to other Group compa-
                                   nies. Face-to-face events were also arranged.




                                                    Research and                                                                                        Financial
                                                                                   Purchasing              Production             Distribution
                                                    Development                                                                                         Services

                                                 • Adaptation to local          • Localised purchasing   • Local production     • Strong dealer      • Local offer of
                                                   customer needs                 throughout supply        facilities for key     network              Financial Services
                                                 • Local RD                      chain                    products             • Adapted local
                                                   Teams in regions                                                               marketing

                                                                                                                                                               Market
                                                                                                                                                               entry2




                                                          1
                                                                                                                   New:                  Quick                 Market
       Localisation creates new                                                                                    Pune                  expansion             entry2

     jobs and adds local value –                          1
                                                                                                                   New:                  Quick                 Market
                                                                                                                   Kaluga                expansion             entry2
     substantial growth factors
                                           1
                                               Partial development capacity 2 Market entry planned
         for the local economy.

26
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




                                                                                                                          Economy               In the spotlight

                                        Volatility                              Market players are already reacting        are only seventh when it comes to
Economic stability
                                        Although the long-term global           to inflation risks and turning to real     operating profit. This is not good
In the years ahead, three mega-         growth trend is basically stable,       assets such as gold, shares, commod-       enough to achieve our targets for
trends on the economic front will       fluctuations around this trend are      ities and real estate. This encourages     2018.
be particularly important for           increasing considerably. For example,   speculative bubbles.
Volkswagen: shifts in global            the financial crisis is by no means                                                Conclusions
equilibrium, addressing financial       over. Substantial risks to the world    Another risk takes the form of             Volkswagen already has a strong
challenges in the face of growing       economy include growing levels of       persistent significant balance of          presence in many important markets
volatility, and the (re-)emergence      national debt in many countries,        trade and balance of payments              and is profiting from global growth.
of old and new competitors.             the instability of the financial        deficits, as in the present situation      The challenge now is to achieve
                                        system, growth deficits in selected     between the USA and China, because         systematic growth in local
Equilibrium                             industrialised countries, persistent    these increase the underlying              value-added, in order to continue
The BRIC states are at the forefront    imbalances of trade and current         probability of protectionist measures.     reducing dependence on exchange
of the present economic recovery.       account figures, and the amount of                                                 rates and the risk of barriers to trade.
They are resuming a growth trend        speculation in the markets.             On top of this, speculators are            Increasing localisation of products
that is well above European and                                                 contributing to the great volatility       and financial services is at the same
North American levels and which         Levels of national debt in several      of the financial markets. The scale of     time a central key to achieving
will bring about substantial            Eurozone countries remain critical.     their influence is evident from crude      market-oriented cost levels and
medium-term shifts in global            The resulting potential instability     oil trading, for example: in recent        adequate profitability worldwide.
economic equilibrium. As a result,      of the banking system and the           years the number of speculative
the economic power of the emerging      uncertainty about the future of         transactions has undergone such a          This financial robustness is important
markets will continue to increase.      the Euro states tend to encourage       massive increase that, these days,         to ensure that Volkswagen is well
                                        sudden and sharp exchange-rate          only about one seventh of all trans-       equipped to face future crises. A large
This opens up opportunities for         fluctuations and cast a shadow          actions physically involve crude oil.      measure of flexibility and financial
Volkswagen, with prospects of large     over economic prospects. In many                                                   independence is absolutely essential
sales volumes. The rapid rise in the    countries the central banks are                                                    for dealing successfully with eco-
prosperity of broad sections of the     trying to combat this by pursuing an    Competition                                nomic risks. Fluctuations in the
population is creating new customer     expansive monetary policy. In the       The pace of competition in the global      commodity and currency markets
groups, and high priority must be       short term this has many beneficiar-    markets is increasing. By way of           must not be allowed to throw us off
given to recruiting these groups.       ies, including Volkswagen which has     illustration, the market shares of the     course, any more than falling unit
Localised products adapted to           already felt the substantial benefit    four largest manufacturers in China,       sales in times of recession.
individual markets are needed to        of the economic upswing. In the         the USA and Brazil have shown a
fire their enthusiasm. And to ensure    medium term, however, this              significant drop over the past             We are acting from a position of
sustainable success, the contribution   approach involves a risk of higher      decade.                                    strength and are well on the way to
that these products make to             inflation, which could have a                                                      achieving the ambitious targets of
earnings needs to be stepped up         considerable destabilising effect       Despite this difficult situation,          our Strategy 2018.
substantially.                          on the economic system.                 Volkswagen is doing very well on the
                                                                                whole. In global terms, we rank third
                                                                                among car manufacturers on the
                                                                                basis of unit sales. By contrast, we



                                                                                                                                                                      27
3    Strategie  Management

     Strategie 2018

     Management
                      Society

                   Employment
     Herausforderungen
                   Demographic change

                      Advancing women and promoting diversity

                      Social responsibility




28
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




Building a top team.
From vocational training to skills development at home and abroad, and from a forward-looking pay
policy to employee involvement, the Volkswagen Group is working with its employees to set the highest
standards right across its operations. Our employees also play an active part in a wide variety of social
contexts.




                                                                                                                                                      29
A top team
                                         Employment                                          meet present and future challenges if its em-
                                         The Volkswagen Group’s Strategy 2018 sets out       ployees – from apprentices to top managers –
                                         how it intends to achieve its goal of becoming      consistently turn in an outstanding perfor-
                                         the car industry’s global market leader in terms    mance to ensure that innovation and product
                                         of unit sales and top the rankings in terms of      quality remain at the very highest level in the
                                         customer satisfaction and profitability. On top     long term.
                                         of that, Volkswagen also wants to be the most
                                         attractive employer in the automotive sector by     Securing outstanding performance, generating
                                         2018. The Group’s business strategy is a multi-     success and giving employees a share in the
                                         dimensional stakeholder strategy that balances      profits are central to Volkswagen’s HR strategy.
                                         the interests of customers, shareholders, em-       Securing the outstanding performance re-
                                         ployees and other stakeholders.                     quired to assure Volkswagen of pole position in
                                                                                             the international automobile industry means
                                         In the 2010 financial year, the Volkswagen          having a top team, an HR principle that applies
                                         Group has made full use of the opportunities of-    across the Group’s global operations. And it is a
                                         fered by its superb current range of models,        principle that is particularly important when
                                         winning new customers and expanding its mar-        the Group is growing, as it has done over the
                                         ket shares across the globe. However, it can only   past few years.



                                                                                                           Employment        Circle of success




                                                                              Excellent                  No. 1
                                                                             performance


                                                             Top
                                                            team                       Good
                                                                                   performance
                                                                                                               Success
                                                                                      Top
                                                                                    employer
                                                           Good
        The circle of success from our                     team
     “Strategy 2018” shows that only
       an attractive employer can re-                                               Good
     cruit a good team and develop it                                              employer
      into a top team. And only a top
           team can turn in excellent
                        performance.

30
S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t




Including the Chinese joint ventures, the Volks­     Group to achieve its aim of recruiting even more
wagen Group employed a total of 399,381 people       apprentices.
worldwide on December 31, 2010, 8.4 percent
more than in December 2009 (368,500 employ-          In September 2010, the number of employees
ees). But as our workforce grows, so too does        in vocational training across the Volkswagen
the complexity of the Group. The number of pro-      Group exceeded 10,000 for the first time. At
duction sites, the range of technology used and      the end of 2010, Volkswagen AG was training
the diversity of processes are expanding across      approximately 4,500 apprentices and students
the Group as it diversifies from vehicles with       in 32 professions and 21 courses at its six Ger-
conventional drive into hybrid- and electric-        man locations alone (Wolfsburg, Hanover,
drive vehicles. It is therefore more important       Braunschweig, Kassel, Emden and Salzgitter)
than ever that the Group has access to the right     under the StiP integrated study and traineeship
skills in the right place at the right time.         scheme. In February 2010, the newly established
                                                     Volkswagen Osnabrück GmbH also took on a
                                                     further 99 StiP apprentices and students from
Training and skills development                      the insolvent Karmann company.
Over the next few years, the need for vocational
training and skills development and transfer is      While undergoing vocational training at Volks­
set to increase across the Group. Volkswagen         wagen, apprentices can benefit from a wide
sets great store by being a learning and teaching    range of additional training programmes and
organisation and is making every effort to en-       events. These include cooperation between
sure that it has the appropriate skills levels       Volkswagen’s vocational training division and
across its locations.                                “Jugend gründet”, a nationwide online busi-
                                                     ness/high-tech competition offering a prize for
Outstanding vocational training and systematic       the best product or business idea. The Company
supervisor training are crucial to our HR devel-     also organises the “ProTalent” and “Pro-
opment strategy. The Volkswagen brand is in-         Mechaniker” competitions, which offer appren-
troducing a global supervisory qualification to a    tices and students within the Volkswagen Group
common standard, so that we can employ highly        an opportunity to combine their technical talent
skilled supervisors at all our locations. The aim    with their passion for motor sport.
is to make the supervisor grade a key position in
all locations, and training and skills develop-      It’s not all about work on the factory floor or           Volkswagen apprentices’ commit-
ment programmes are currently being designed         in the back office, though. For 20 years, Volks-          ment to the Auschwitz Memorial
to achieve this.                                     wagen apprentices have been involved in the               is recognised worldwide.
                                                     Auschwitz Memorial and Museum. Since 1990,
Volkswagen sets great store by its vocational        Volkswagen has been sending four groups of
training, and the majority of its highly skilled     apprentices to Auschwitz each year to spend two
workers join the Company via this route. The         weeks with young Poles learning, helping and
Company’s locations in Germany have long-es-         engaging with concentration camp survivors.
tablished, top-quality vocational training facili-   The groups are briefed and supervised by the In-
ties, which are to be the model for all Volkswa-     ternational Auschwitz Council and our subsidi-
gen locations in future. This will also enable the   ary, Volkswagen Coaching GmbH. Over 1,400

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Vwag nachhaltigkeitsbericht online_e

  • 2. About this report Contents The business reports of the individual brands and compa- This report contains information about the sustainability nies are available on their respective websites. activities of the Volkswagen Group. It outlines strategic prin- ciples and presents practical examples. The report is divided The period under review extends from 15 June 2009, when into central chapters on Strategy, Economy, Society and the last report went to press, until March 31, 2011. The facts Environment. The key sustainability indicators are set out in this report are constantly updated on the Internet. The starting on page 56. next Sustainability Report will be published in the second quarter of 2012. Scope Unless otherwise indicated, the information in this report relates to the entire Group, in which case we refer to the “Group” or “Volkswagen Group”. When we use “Volkswagen” on its own, we mean the Volkswagen brand. >>01 Internet concept This printed sustainability report is closely linked to the website volkswagenag.com/sustainability. The entire contents of the present report are also available there. The Internet content is constantly updated. This website also offers you a wealth of additional in-depth information: The >> 01 -numbers in the text of this report indicate a specific link. These sources are listed in the List of Links on page 78 (cover), with a brief indication of their contents. This List of Links can also be found on the website volkswagenag.com/ If you have a smartphone, this sustainability, where a click on the relevant link will take you to the appropriate information. code will take you straight to the website volkswagenag.com/ www.volkswagenag.com/sustainability sustainability. The charges de- pend on your individual mobile call rates. Indexes – Rankings – Awards The Volkswagen Group is represented in all leading sustainability and corporate social responsibility (CSR) indexes. Moreover, this report was prepared in accordance with internationally recognised reporting standards. An overview of all indexes and awards can be found on page 68. Furthermore, the selection of topics and our editorial processes and choice of indicators have been analysed and verified by independent auditors and stakeholders. For further information, see the Back-up section starting on page 72.
  • 3. VOLKSWAGEN FINANCIAL SERVICES AKTIENGESELLSCHAFT Portrait of the Group The Volkswagen Group, based in Wolfsburg, is one of the In 15 European countries and six countries in the Americas, world’s leading automobile manufacturers and the largest Asia and Africa, the Volkswagen Group operates 62 produc- automaker in Europe. In 2010 the Group increased the tion facilities (as of December 31, 2010). Around the world, number of vehicles delivered to customers to 7.2 million nearly 400,000 employees produce more than 29,600 vehi- (2009: 6.3 million), which equates to a global market cles per working day or provide vehicle-related services. share of 11.4 percent. In Western Europe more than one The Volkswagen Group’s sales operations cover more than fifth of all new cars (21.0 percent) were manufactured by 150 countries worldwide. The Group’s aim is to offer attrac- the Volkswagen Group. tive, safe and eco-friendly vehicles that set the global benchmark in their respective classes. The Group’s sales revenue rose from €105.2 billion in 2009 to €126.9 billion in 2010. Profit after tax in the fiscal year 2010 At the end of 2010, the subscribed capital of Volkswagen AG totalled €7.2 billion (2009: €0.9 billion). The Volkswagen comprised 295,045,567 ordinary shares and 170,142,778 Group owns nine brands from seven European countries: preference shares. Porsche Automobil Holding SE, Stuttgart, Volkswagen, Audi, Škoda, SEAT, Bentley, Lamborghini, held 50.74 percent of the voting rights. The second-largest Bugatti, Volkswagen Commercial Vehicles and Scania. shareholder was the State of Lower Saxony, with 20.0 percent Each brand has its own distinctive character and operates of the voting rights. Qatar Holding LLC was the third-largest autonomously in the marketplace. The passenger car port- shareholder with 17.0 percent, while Porsche Holding GmbH, folio extends from economical compact cars to luxury high- Salzburg, held 2.37 percent. The remaining 9.89 percent end models. In the commercial vehicle sector, the range were held by other shareholders. Information on production starts with pick-up trucks and extends all the way to buses and deliveries of the main Volkswagen Group products can and heavy-duty trucks. be found in the Annual Report 2010 on pages 108-123. > >01 VO L K SWA G E N G R O U P Data 2010 2009 Vehicle sales (units) 7,278,440 6,309,743 Production (units) 7,357,505 6,054,829 Employees at Dec. 31 399,381 368,500 Proportion of female employees (percent) 14.2 14.2 Health index (percent) 96.7 97.5 CO2 emissions, European new vehicle fleet (g/km) 144 151 Direct CO2 emissions (kg/vehicle) 175.19 234.67 Energy consumption (MWh/vehicle) 2.55 2.81 Financial data (IFRS), € million 2010 2009 Comments on the key sustainability indicators can be found in the Key Sales revenue 126,875 105,187 Indicators chapter of Operating profit 7,141 1,855 this report (page 56). You will find revenue Profit before tax 8,994 1,261 and profit figures bro- ken down by brand and Profit after tax 7,226 911 business field in our cur- rent annual report. >>02
  • 4. 7,278,440 vehicles sold 399,381 employees worldwide 4.6 percent less CO2 emissions by EU new vehicle fleet (EU 27) than 116 models with CO2 emissions of less than 120 g/km, including 20 with less than 8.4 percent more employees than in 2009 in 2009 100 g/km > >04, >>05, >>06 62 production plants, including 57 certified to inter- national environmental management standards 51,585 employees took part in training run by Volkswagen Coaching in 2010 such as ISO 14001 and EMAS; 4 plants are current- ly preparing for certification >>03
  • 5. Strategy 8 Economy 20 Society 28 Environment 42 Key Indicators 56 Back-up 72
  • 6. By 2018 we’re aiming to be Number 1 – both economically and ecologically. 6
  • 7. Dear Reader, Responsible business management and commercial success are two sides of the same coin. In the last two years the Volkswagen Group has again given an impressive demon- stration of this fact. In a challenging environment we have continued to post solid growth, enabling us to set new records in the 2010 financial year with 7.2 million vehi- cles delivered and an operating profit of €7.1 billion. Sustainability is and will remain the foundation of our corporate policy. One clear focus Prof. Dr. rer. nat. Martin Winterkorn is on “green” mobility. This is dictated by both social responsibility and sound business thinking. In the last five years, for example, we have reduced our fleet’s CO 2 emissions by 15 percent to 144 grams per kilometre. Today the Volkswagen Group’s portfolio already includes 20 model variants with emissions of less than 100 grams of CO2 /km. Tomorrow’s mobility will be determined by efficiency and diversity. Which is why our Group, with the concentrated innovative power of its multi-brand alliance, is forging ahead with the entire technology and powertrain spectrum: from optimised combustion engines through lightweight design to electric drive. With our “one-litre” car XL1 we have already demonstrated technologies that could go into series production in the near future. Bernd Osterloh Green mobility goes hand in hand with environmentally sound production processes. The Volkswagen Group is making great efforts to further improve resource efficiency at its 62 production facilities. Our new factory in Chattanooga is setting standards in this respect. Equally high standards are characteristic of our worldwide labour relations: our self-image as a fair employer and our established culture of co-determination have proved to be anchors of stability and a clear competitive advantage. Moreover, success- ful initiatives such as “A chance to play” in South Africa demonstrate that our social commitment does not end at the factory gates. In keeping with its responsibility for society, environment, employees and customers, the Volkswagen Group continues to adhere to the principles of the United Nations Glob- al Compact. The effectiveness of our sustainability strategy is confirmed by internation- al indexes such as the Dow Jones Sustainability Index and the FTSE4Good, in which the Volkswagen Group is again represented this year. Because sustainability calls for trans- parency, we have had this report audited in accordance with the AA1000AS standard. The Global Reporting Initiative (GRI) has again awarded us its highest rating “A+”. Supported by corporate leadership that is sustainable in all respects, our 400,000 em- ployees are dedicated to making the Volkswagen Group the world’s leading automaker by 2018 – both economically and ecologically. And they are also working on the best ideas for the next 125 years of automotive diversity. See for yourself how far we have already travelled along this road. We trust you will find informative insights into the world of Volkswagen on the pages of this report, and we look forward to engaging in dialogue with you. Prof. Dr. rer. nat. Martin Winterkorn Bernd Osterloh Chairman of the Board of Management of Volkswagen Aktiengesellschaft Chairman of the General and Group Works Councils 7
  • 8. 1 Strategie & Management Strategie 2018 Management Strategy Herausforderungen Strategy 2018 Sustainability management Materiality 8
  • 9. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t Driving success. Our strategy pursues a clear objective: By 2018 the Volkswagen Group is to be the world’s most successful and fascinating automobile manufacturer – and the leading light when it comes to sustainability. Our Strategy 2018 paves the way to this goal. 9
  • 10. Globalisation has developed an enormous eco- making an effective contribution to sustainable nomic momentum. This increases people’s mobility – with technologies for the cleanest prospects of participation. Trade, transport and and most economical cars. Job security and division of labour are the elementary driving profitability are goals of equal importance in forces behind an economic development that Volkswagen’s corporate activities. puts people in a position to raise their standard of living. Volkswagen stays on course: If, as expected, the world’s population grows to Strategy 2018 more than nine billion by 2050, this means that The Volkswagen Group has emerged safely and companies will have to satisfy the needs of bil- with renewed strength from the worldwide cri- lions more people. These people need energy sis that was triggered by the financial markets. and food, housing and mobility, education and Deliveries were at an all-time high of 7.2 million healthcare. vehicles. With growth of 13.7 percent, we outper- formed the market as a whole and extended our Our Strategy 2018 focuses special Technical progress and significant productivity share of the global passenger car market to 11.4 attention on the ecological orien- increases, innovations and structural change percent. tation and benefits of our vehicle will help to achieve the necessary improve- projects. We will be setting new ments. The guiding principle for the 21st centu- With our “Strategy 2018” we are building con- ecological standards with regard ry is sustainability. In other words, the way we sistently on the company’s strengths and setting to vehicles, major components manage our lives and the resources we consume new goals. Attractive models and new vehicle and lightweight design. must not reduce the opportunities available to segments, plus innovative environmental tech- future generations. nologies, are paving the way for increasingly economical combustion engines and power- Sustainability is the foundation of Volkswagen’s trains, for hybrid and electric vehicles, and for corporate strategy. This means that sustainabil- future biofuels. The latest example is the pres- ity is integrated in the entire value-added pro- entation of the XL1, a study with series-produc- cess. In the long term, corporate responsibility tion potential which marks the third stage in the committed to the vision of sustainability safe- evolution of the Volkswagen Group’s “1-litre” car guards the future viability of the company, while strategy. Its plug-in hybrid system, lightweight respecting the need to harmonise economic, design and impeccable aerodynamics enable environmental and social goals. the two-seater to manage on a bare 0.9 litres per 100 kilometres. That equates to CO2 emissions As a group with worldwide operations, Volks­ of just 24 g/km. Currently the world’s most wagen acknowledges this corporate responsi- efficient vehicle and due to go into (limited) bility and devotes its entire innovative power to series production in 2013, the XL1 underpins the 10
  • 11. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t St eering a cl ea r course Volkswagen Group’s claim to play a leading based on attractive vehicles that appeal to cus- Gaining worldwide acceptance – environmental role. Added to which there are tomers in all parts of the world and meet the in- while catering for regional the electric vehicles “up! blue-e-motion”, “Golf dividual regional requirements and cost targets. differences. blue-e-motion” and “Audi A1 e-tron”. Through Our modular approach will be a great help in its approach, the Group will be underlining the this respect. In conjunction with our TSI® and need for e-mobility to remain affordable. TDI® engines, the innovative DSG® dual-clutch gearbox and future electric powertrains, the With these technological innovations, the Volks­ MQB will play its part in ensuring that the Volks­ wagen Group can build on a strong tradition wagen Group meets its ambitious fuel consump- and corporate culture that has always centred tion and emissions targets. With its broad prod- on a capacity for social and ecological change. uct and segment coverage as a multi-brand Through our corporate values we are committed company, the Volkswagen Group is in an almost to a sustainable and socially responsible course unparalleled position to ensure very speedy of action. For us, commercial success must in- implementation of innovations in high-volume variably go hand in hand with an intact environ- brands and markets and thereby achieve sig­ ment and social responsibility. nificant improvements in efficiency. > 07 > Our basic position remains that, as the Volks­ Above and beyond this, we also apply our techno- wagen Group, we act responsibly towards our logical expertise in the interests of other prod- customers, our shareholders, our employees ucts and services with the aim of safeguarding and towards society. jobs, protecting the environment and boosting our profitability. These include, for example, Through our Strategy 2018 we are pursuing the projects focused on the development and use of long-term goal of firmly anchoring the Volks­ industrial engines or boat engines that combine wagen Group among the most successful au- superior motive power with excellent fuel con- tomakers in the world. This applies to profita- sumption figures and low emissions. bility, customer satisfaction and quality, to developing new markets and stepping up our One milestone here is the incorporation of the production volume, and to our attractiveness as million-selling 2-litre natural-gas engine from an employer. the Salzgitter plant in the EcoBlue compact CHP units. These are the packages contributed by With a model portfolio geared to ecological Volkswagen to the “Home Power Plant” devel- principles and the strong position of its brands oped by the power partnership with energy sup- in the global marketplace, the Volkswagen plier LichtBlick. The Home Power Plants are Group will be systematically building on its used by LichtBlick to realise an innovative, intel- competitive advantages. Our growth strategy is ligent heat and power supply concept. In the long 11
  • 12. term, LichtBlick will be networking 100,000 dis- Volkswagen will be providing increasing sup- tributed Home Power Plants to create Germany’s port for its dealers as the vital link with the cus- largest virtual gas power station. The plants will tomer and expanding its marketing measures. generate “swarm power” – so called because, as The greatest long-term growth potential in this in a swarm of fish, many small units will be mov- respect is to be found in Brazil, China, India, ing in the same direction – supplementing fluc- Russia and the USA. Localising supplier rela- tuating wind and solar power generation as nec- tions not only makes us less dependent on ex- essary. The heat produced will be stored and will change rates, but enables us to contribute to be available locally for heating and hot water. economic development and location upgrading The first Home Power Plants have already been in the individual countries. And our suppliers installed at private and commercial customers in are subject to the same ecological and social Hamburg. > >35 standards as our own production facilities. We can only attain our ambitious goals as car- The competence of our employees provides the makers if, in addition to our existing customer basis for our business. Volkswagen will only be base, we succeed in attracting many new cus- successful in mastering the present and future tomers all over the world. With this in mind, challenges of the automobile manufacturing The “1-litre car” The XL1 prototype, which made its debut at the Qatar Motor Show in January 2011, is a milestone on the way to sustainable mobility. With a consumption of 0.9 l/100 km, the XL1 only emits 24 grams of carbon dioxide per kilometre. This is possi- ble thanks to consistent lightweight design using glass fibre-reinforced plastic, perfect aerodynamics and a plug-in hybrid system. The hybrid system comprises a two-cylinder TDI engine and an electric motor coupled with a 7-speed DSG dual- clutch gearbox and a lithium-ion battery. 12
  • 13. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t 0.9 litres is all the XL1 needs to go 100 kilometres. sector if all employees – from apprentice to top wagen brings together, under the heading of manager – consistently deliver the outstanding BlueMotionTechnologies, the best available con- performance needed to safeguard the excellent temporary environmental technologies. In the quality of innovation and products in the Volks­ next few years we will be investing more than wagen Group in the long term. Outstanding €8 billion a year in developments such as the op- performance, the resulting successes and par- timisation of our existing TSI®, TDI® and DSG® ticipation in the rewards are at the focus of Volks- technologies, as well as the ongoing enhance- wagen’s human resources strategy of being a ment of our TSI® technology to run on natural good and attractive employer and building a top gas or as a flex-fuel powertrain. We will also be team. Be it vocational training, continuing pro- forging ahead with progress in the field of future Improving the efficiency of fessional development at home and abroad, a biofuels. And finally we will be investing a great conventional powertrains while forward-looking remuneration policy or em- deal of funds and effort in the electrification au- forging ahead with electromobility. ployee involvement: the Volkswagen Group al- tomobiles. The success of electric powertrains ways sets standards for good work in a process depends to a very large extent on the batteries of dialogue with its employees. employed, and this is an area where much pro- gress still needs to be made. The topic is supple- The advancement and professional develop- mented by new mobility concepts that create an ment of women in particular is a central princi- attractive package of the various means of trans- ple of personnel work at Volkswagen. We are port and the ways they are used. keen to encourage even more female graduates to commit to engineering and scientific profes- In other words, it will still be some time before sions and play their part in shaping the car of the paradigm shift to electric cars takes place. the future. One example of our initiatives here Here too, Volkswagen’s credo remains un- is the “Woman Driving Award”. changed: we will settle for nothing less than of- fering our customers the best solution. When Our Strategy 2018 will take us forward along our developing new vehicles, CO 2 emissions are a charted course. In this context we assign top key parameter. Consequently, at every stage of priority to ecological relevance and sustainable the product creation process, the CO2 emissions commercial success. The initiatives that we are determined for all vehicles, and every deci- have already set in motion to boost productivity sion in favour of a specific product is made with and quality will continue undiminished. By ap- a view to its impact on the climate. That way we plying rigorous discipline in terms of costs and can ensure that the objectives laid down in the capital expenditure, we will put the necessary Group’s Environmental Principles and in the conditions in place for attaining our long-term Environmental Goals of the Technical Develop- earnings targets and ensuring a sustainable ment Department are achieved. high level of liquidity. The Volkswagen Group’s maxim for its progress For Volkswagen, “green mobility” means no less towards its goal of most successful automaker is than setting new ecological standards in automo- to accept responsibility for people, the environ- bile manufacturing in order to put the cleanest, ment and society. In this way Volkswagen makes most economical – and at the same time most a substantial contribution to a world worth fascinating – cars on the road. To this end Volks- living in – today and for future generations. 13
  • 14. Sustainability management rate strategy focused on the long term, squaring For the Volkswagen Group, living up to our cor- up to challenges which are not only economic, porate social responsibility (CSR) is a corporate but also ecological and social in nature. >>08 contribution to sustainable development. For us, CSR means voluntary acceptance of respon- Since 2006 our CSR Office has been responsible sibility for social concerns on a scale that goes for coordinating corporate activities in the field beyond mere compliance with statutory regula- of CSR and sustainability management through- tions. With its integrated CSR concept, the out the Volkswagen Group. Its task is to deter- Volkswagen Group seeks to prevent risks, en- mine the strategic direction of CSR and opti- sure timely identification of growth opportuni- mise sustainability management activities. ties and enhance the company’s reputation. As a whole, CSR management and sustainability In 2010, with the aim of strengthening manage- management make an important contribution ment processes, the CSR Steering Group and to safeguarding the long-term future of the com- the Sustainability Reporting Group were com- pany and increasing its value over time. bined to form the CSR & Sustainability Steering Group. The CSR & Sustainability Office reports Model of Sustainable Development to the CSR & Sustainability Steering Group, We have formulated the principles of sustainable which consists of representatives of all central business in our Model of Sustainable Develop- corporate departments at top management level ment. For us this is the benchmark for a corpo- plus the Group Works Council. Management Steering group Group Board of Management CSR & Sustainability Steering Group CSR & Sustainability Office Strategic goals and statements on CSR and sustainability Definition of Group-wide steering indicators for CSR and sustainability Commissioning and approval of sustainability reporting CSR & Sustainability – Project teams Brands and regions In 2010 management processes Interface for CSR sustainability fields and topics Annual conference were strengthened by merging w the CSR Steering Group and the Evaluation and development of stakeholder dialogue Sustainability Reporting Steer- Sustainability reporting / Corporate profiles for rankings ing Group to form the CSR & Sustainability Steering Group. 14
  • 15. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t 1 unit brings together the various sustainability management bodies. The aim of the Steering Group’s work is to foster opment of German Business – and in various Sustainability is measurable... networks linking internal functions and working groups on issues such as “Making sus- strengthen the sharing of information between tainability measurable” and “Sustainability in specialist departments. Our CSR project teams the supply chain”. carry out cross-functional work on topical issues such as the enhancement of Group sustainability Stakeholder involvement reporting; since the creation of a Group-wide As a good “corporate citizen” we are committed CSR body in 2009 there has been a regular inter- to an ongoing dialogue with our stakeholders. national exchange of information with the CSR Since 2002 Volkswagen has supported the Glob- coordinators of the brands and regions. al Compact (GC) initiated by former UN Secre- tary General Kofi Annan. With over 7,000 com- One central field of activity is the establishment panies in more than 135 countries, this is the of an IT-based CSR key indicator system cutting world’s biggest and most important CSR initia- across regional and brand boundaries. During tive. Its goal is to bring about a fairer and more the last financial year we successfully completed sustainable global economy. Volkswagen plays the first phase of the introduction of this key in- an active part in ensuring that this goal is dicator system. We are now in a position to steer achieved. CSR activities more efficiently, making them more transparent and more successful. This has The GC is based on ten principles relating to hu- created an important foundation for up-to-date man rights, labour standards, environmental CSR and sustainability reporting by the Group. protection and anti-corruption measures. In In the second phase we are rolling out the key 2010 Volkswagen continued to align its business indicator system across the brands and regions. activities with these principles at all locations. Thus Volkswagen is meeting its stakeholders’ We make our know-how available within the GC increasing expectations with regard to differen- so that other companies also have a chance to tiated, up-to-the-minute reporting of the live up to their global responsibility. The pro- Group’s performance in the fields of CSR and gress made by Volkswagen as a result of its ac- sustainability. tive participation in the GC is documented in an annual report. The Volkswagen Group contributes its experi- ence and competence to the business sector’s Here are two examples: Volkswagen participates CSR networks at national, European and inter- in the GC project “Supply Chain Sustainability”. national levels and supports the projects initiat- The results of the project were brought together ed there. One important task is to prepare in- in a manual and presented at the GC summit in formation on ecological and social standards New York in June 2010. In addition, the interna- for suppliers. For this purpose the online portal tional GC Yearbook contained a report on the of CSR Europe, the leading European business sustainability project for water utilisation in the network for corporate social responsibility, pro- mountain region of Izta-Popo in Mexico, which vides an important communication platform was run by Volkswagen de México. We also pre- that enjoys international recognition. We are sented the project at the world biodiversity sum- also actively involved in the steering body of mit in Nagoya in September 2010. > 09> “econsense” – the Forum for Sustainable Devel- 15
  • 16. Together with the German Nature and Biodiver- Sustainable Development of German Business sity Conservation Union (NABU – Naturschutz- (econsense) and the World Business Council for bund Deutschland) we play a part in specific en- Sustainable Development (WBCSD). One exam- vironmental protection projects. In the course ple of this is the study “Vision 2050: a new agen- of this cooperation we raise society’s awareness da for businesses” presented by the WBCSD in of environmental and sustainability issues, for 2010, which Volkswagen supported in the field example through jointly-run fuel-saver courses. of sustainable mobility in particular. Based on With our incentive systems for fleet operators the assumption that the Earth’s population will we also create additional arguments for eco- grow to around nine billion people by 2050, the friendly mobility. study describes ways of making more sustaina- ble and more efficient use of the existing re- Guidelines sources. A total of 29 global companies in vari- Along with our Code of Conduct, further key ref- ous industries were involved in preparing and erence points for our corporate strategy are the discussing the study in numerous workshops. Convention of the International Labour Organi- On the way to sustainable mobility it is only by sation (ILO) and the OECD Guidelines for Multi- taking a longer-term view of the future that we national Enterprises. We are also actively in- will be able to integrate underlying sociological volved in CSR Europe, the Forum for and technological trends into our research and Intl. conventions Human rights Declaration on Fundamental Principles and Rights at Work, 1998 (especially Principles: Excerpt from the Code of Conduct the following topics: abolition of child labour; elimination of forced or As well as the laws and regulations of individual countries, there are a number compulsory labour; ban on discrimination; freedom of association; and the of conventions and recommendations drawn up by international organisa- right to collective bargaining) tions. They are primarily addressed to the member states, not to individual • OECD Convention on Combating Bribery of Foreign Public Officials in companies. They do however constitute important guidelines for the International Business Transactions, 1997 behaviour of an international group and its employees. We therefore attach • “Agenda 21” on sustainable development (final document of the ground- great importance worldwide to ensuring that our corporate activities are in breaking United Nations Conference on Environment and Development, keeping with these guidelines. The main conventions of this kind are listed Rio de Janeiro 1992) below: • Principles of the Global Compact for more social and more ecological • The Universal Declaration of Human Rights, dating from 1948 (UNO), globalisation, 1999 and the European Convention on Human Rights (formerly Convention for • OECD Guidelines for Multinational Enterprises, 2000 the Protection of Human Rights and Fundamental Freedoms), 1950 • International Covenant on Economic, Social and Cultural Rights, 1966 We also profess our commitment to the “Declaration on Social Rights and • International Covenant on Civil and Political Rights, 1966 Industrial Relationships at Volkswagen” (Volkswagen Social Charter) and the • Tripartite Declaration of Principles Concerning Multinational Enterprises and Charter on Labour Relations concerning fundamental social rights and Social Policy, ILO (International Labour Organisation) 1977, and ILO principles. > 10 > 16
  • 17. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t 124 studies were evaluated to select the topics in the materiality matrix. development activities. It was with this in mind sis were not only presented to internal steering that Volkswagen Group Research formulated its bodies, such as the Corporate Strategy Group, “Research Visions” in 2010. The topics are mobil- but also discussed with external stakeholders, ity, energy, the driving experience, safety, cost- for example the German Nature and Biodiversi- A cross-functional team evaluated effectiveness in the product life cycle, and the en- ty Conservation Union (NABU). They then un- internal and external sources to vironment. And with our Environmental Radar derwent further revision and specification in identify the most important sus- we have also created a separate early-warning the light of comments. This procedure enabled tainability issues. Their findings system for evaluating ecological risks. us to achieve further improvements in the were discussed with independent transparency and quality of our agenda. stakeholders. In our day-to-day work we attach great impor- tance to prudence in addressing potential environmental and sustainability risks to the company. To this end we have installed a risk management system that enables us to identify new risks and minimise existing ones. More- over, the Supervisory Board has established an Audit Committee that is particularly concerned with accounting, risk management including the internal audit system, and compliance is- sues. > 19 > Materiality On the basis of our main topics in the Strategy 2018 and a broad evaluation of recent interna- tional sustainability analyses, we set in motion an internal discussion and filtering process to identify issues that are of priority importance for us. Major external sources included interna- tional studies in the fields of politics and re- search, financial market analyses and position papers published by NGOs. Using a multi-stage scoring system we finally arrived at a short list of the most important topics. The main classifi- cation criteria were stakeholder expectations on the one hand and importance for the company’s performance on the other. Another aspect taken into account was Volkswagen’s capacity as an automaker to impact these issues. > >11 A cross-functional team was set up to prepare this materiality matrix. The results of the analy- 17
  • 18. Efficient productionEmployment Efficient powertrains Localisation Climate protection & energy efficiency Economic stability e-mobility Raw materials & resource efficiency Social responsibility Compliance Mobility concepts Biodiversity Demographic change Air quality Diversity Water Human rights Market shifts Health Food Land take Segment shifts Urbanisation Noise Urban mining 18
  • 19. St r at e g y | E c o n o my | S o c i e t y | E n v i r o n m e n t Customer satisfaction Supplier relations and fuels STAKEHOLDER EXPECTATIONS Water Compliance e-mobility Employment Supplier Customer relations satisfaction Diversity Social Localisation responsibility Human Climate protection & rights Mobility concepts energy efficiency Biodiversity Efficient powertrains and fuels Efficient production Air quality Raw materials & Food Health Demographic resource efficiency change Economic stability Noise Land take Urban mining Urbanisation Segment Market shifts shifts IMPORTANCE FOR BUSINESS SUCCESS The materiality matrix is the result of the analysis rant should not by any means be seen as unimportant and scoring system mentioned earlier. It is the main within the general sustainability agenda: either they thread running through our sustainability topics and are largely beyond our control or they do not yet have projects, and hence a frame of reference for further any significant influence on the company’s perfor- descriptions in this sustainability report. The main mance. More detailed information, e.g. about the defi- topics are shown in the highlighted quadrant. Our pro- nitions of the individual topics and the classification jects and related measures are described in the chap- criteria, can be found via the online link. > 11 > ters that follow. Topics not represented in this quad- 19
  • 20. 2 Strategie 2018 Management Herausforderungen Economy Strategie & Management Customer satisfaction Supplier relations Raw materials Localisation Compliance Economic stability 20
  • 21. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t Making business sustainable. For a company to achieve sustainable development it must first achieve commercial success. Because only a successful company can shape all its processes itself and ensure they are sustainable throughout. Only a successful company can make substantial investments in environmental protection and the development of sustainable products and solutions. And finally, only a successful company can offer its employees secure prospects for the future. 21
  • 22. Ev er y sm It is our customers who determine the Group’s department promptly translates this input into success – millions of times a day. Not just when new design solutions, which are incorporated 29,000-plus vehicles are handed over to their into facelifted or new models. As a result, we are new owners, but every time someone drives one able to adapt to and keep pace with changing cus- of our cars, fills the tank or visits a workshop. tomer requirements. One of the latest examples The more often a satisfied smile appears on the is the new Jetta in the USA, which was developed faces on our customers in the process, the bet- in direct response to customer feedback. ter it is. We also take a proactive approach to reducing the risk of incorrect operation of our vehicles by Customer satisfaction customers – and the associated risk of customer Customer satisfaction is the That explains why we consider customer satisfac- dissatisfaction. In this connection we also incor- decisive factor in assuring our tion a crucial factor in our sustainable corporate porate customer feedback into our product com- long-term success. success and have made it the core of our corpo- munication at dealerships. In the USA, the IQS rate Strategy 2018. That is the year by which we Challenge training programme for sales person- are aiming to rank among the three leading com- nel combines specifically sales-related training panies in all our markets. To measure our pro- with technical training delivered by representa- gress, we refer to the findings of two strategic tives from the vehicle-manufacturing plants. studies: the New Car Buyer Study (NCBS) and the This equips sales personnel to give technically International Aftersales Customer Satisfaction sound and to-the-point advice that increases the Study (IACS). Our interim goal for 2012 is to be at customer’s interest in the technical features of least among the top five in all our markets. the vehicle. This will also reduce the likelihood of incorrect operation – thereby increasing satis- Volkswagen measures three different categories faction with the product. of customer satisfaction: satisfaction with the purchasing process, satisfaction with the prod- We have been analysing customer satisfaction uct and satisfaction with the most recent work- for many years. In 2011, the number of markets shop visit. around the world where customer satisfaction analysis is carried out increased to 19. In the case The data is obtained from various sources: from of the Volkswagen brand for example, that means day-to-day market analysis, from asking custom- we are now obtaining customer feedback on ers about their needs, at customer workshops, more than 90% of all cars we ship. Current and from analysis of online discussion forums customer satisfaction levels are reported to the using web-tracking tools. We then actively inte- Board of Management via the customer satisfac- grate this customer feedback into the product de- tion forum up to six times a year. >> 12, >> 13 velopment process. The Technical Development  page 24 22
  • 23. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t n t s il e co u What customers want Many different things can raise a smile. And in cars in particular, so many different factors determine how happy a customer is with the vehicle. Everyone has their own personal preferences, be it in terms of equipment levels or accessories. But customers who buy cars from the Volkswagen Group expect them to display high quality, reliability and economy, combined with high levels of comfort and convenience, safety and environmental compatibility. Comfort and convenience Safety Environmental compatibility Active safety systems such as the Electron- A sustainable vehicle must also enhance The efficient cars built by the Volkswagen ic Stability Program (ESP), Lane Assist safety for its occupants. With their crash- Group stand for low CO2 emissions. The and ACC automatic distance control with resistant bodies and intelligent safety sys- aim is to produce a fuel consumption lead- Front Assist Ambient Traffic Monitoring tems, the cars built by the Volkswagen Group er in every class of vehicle. We also set the all help to make the driver’s task easier in lead the field in this respect. We are contin- highest standards in terms of the materials complex driving situations. The drowsi- uously working on new ways to improve our we select, our production processes and ness monitor warns drivers if it detects passive safety systems. In 2010, we equipped when it comes to recycling, because an signs of fatigue because steering inputs the Sharan and Passat with a safety package end-of-life vehicle is a source of raw mate- have become very infrequent. Our lighting consisting of an optimised body structure rials: up to 95 percent of a car by weight can and vision systems help drivers see better and a highly effective belt-and-airbag com- today be recycled or recovered. Along with at night by providing optimal illumina- bination. Both vehicles received 5 stars in fuel-efficient cars built by environmentally tion, whether for long-range vision, cor- the NCAP crash test, which means they are compatible production methods, another nering or making a turn. Dynamic Light among the safest in their class. increasingly important aspect is an envi- Assist is an assistance system which dips ronmentally aware style of driving. Our fu- just certain portions of the high beam, to To help prevent accidents, first we have to el-saver driving courses are conducted by prevent other road users being dazzled, know what causes them. With this in 'Volkswagen driving experience'. On top of while the Area View camera system allows mind, Volkswagen has been investing in this, since 2003 5,000 people have attend- the driver to monitor the entire vehicle accident research since the early 1990s, ed the fuel-saver training sessions we offer periphery. By providing the best possible not only in Germany, but also in China in conjunction with the German Nature assistance in tricky driving situations, for and India. To facilitate the effective ex- and Biodiversity Conservation Union example when pulling into or out of a change of the latest research findings be- (NABU). parking spot on a busy road, our driver as- tween industry and public research insti- sistance systems also help to avoid acci- tutions, in 2010 the Group’s Volkswagen, For further details on environmental pro- dents. One thing all these systems have in Audi and Porsche brands joined with BMW tection and resource conservation in the common, however, is that they always and Daimler to form the “Trauma Biome- Volkswagen Group can be found starting on leave the final decision up to the driver. chanics” research network at Regensburg page 42. 14 University of Applied Sciences. 14 23
  • 24. Ethnic marketing procurement process and a supplier monitoring Since 2005 Volkswagen AG has been successful- and development process. The sustainable supply ly engaged in ethnic marketing in the form of chain policy applies to all brands and all regions. the project “Volkswagen speaks Turkish”. The Its effectiveness is continuously reviewed and essence of the project is that in all forms of mar- assessed, and new purchasing employees are keting, it caters for the cultural and ethnic tra- trained to be aware of the policy right from the ditions of the Turkish population in Germany. It start. is intended to demonstrate the high regard which Volkswagen AG has for its Turkish-born Our international “Sustainable Procurement Net- clientele in Germany. work” ensures that the principle of sustainability is applied throughout the Group, despite cultural Along with meeting customer wish- The pillars of this project are Turkish-speaking differences. The supplier integration strategies es regarding their vehicles, respect- sales staff as the most important actors in car are incorporated into action plans and regularly ing traditional cultural influences sales and the direct points of contact for the cus- reviewed. Following the successful supplier devel- is another key factor in ensuring tomer – which of course means all customers, opment project in 2009, a second series of events satisfied customers. regardless of their ethnic origins, since these in India was held in 2010. Further supplier devel- sales staff speak German equally well. The opment projects also took place in Brazil, Argen- ethnic marketing project also means that a tina and Mexico. In line with this continuously growing group of certified sales staff of Turkish evolving system, when submitting a quote, all origin are being offered good career prospects suppliers must declare that they agree to abide by at Volkswagen dealerships. These jobs are Volkswagen’s sustainability requirements. Since coupled with excellent training in keeping with 2010, supplier sustainability information has Volkswagen’s acknowledged high standards, been electronically catalogued. and they offer unique career opportunities for these young German Turks as an important From the second quarter of 2011, global supplier basis for successful integration. In this way the development will be supported by a development project makes an important contribution to cul- module which suppliers will find on the online tural diversity at Volkswagen; it is also supported platform www.vwgroupsupply.com. Development by the Works Council. It effectively fosters mutu- workshops will also be held in selected regions. al understanding and trust between Turks and 16, 17, 18, 65 Germans at both employee and customer level, and is thus an active expression of progressive integration and cultural diversity. 15 Raw materials Volkswagen depends on reliable supplies of strategically important high-grade raw materi- Supplier relations als, especially metals. For this reason the Sustainability in the supply chain has been a key Group’s Environmental Research Department, focus of the Group Purchasing department since in conjunction with the Federal Institute of Geo- 2006. Volkswagen’s sustainable supply chain pol- sciences and Raw Materials (Bundesanstalt für icy comprises four main components: sustaina- Geowissenschaften und Rohstoffe – BGR), has bility requirements for suppliers, an early warn- developed a system of criteria and indicators for ing system for minimising risk, a transparent systematic analysis of the raw materials markets. 24
  • 25. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t 2006 was when Volkswagen made its “Sustainability in Supplier Relations” concept a top priority for the Group Purchasing function. In addition to risk factors, this also observes ther business development in a timely manner. The Board of Management is kept and assesses the extraction of raw materials in This means that the Board of Management al- fully informed of the current risk politically unstable countries to make sure that ways has access to an overall picture of the cur- position. it is socially acceptable. In this context, Volkswa- rent risk situation through the documented re- gen seeks to engage in dialogue with NGOs such porting channels. as the Extractive Industries Transparency Initi- ative (EITI). The EITI supports a standardised We are prepared to enter into transparent risks process in which payments by the raw materials that are proportionate to the benefits expected industry to the government are disclosed and from the business. 19 then verified by independent validators. This helps to curb corruption, thereby improving the economic and social climate and maximising Localisation protection of the environment in the country in A central element of our strategy is the localisa- question. tion of production and supplier relations and, in- creasingly, of financial services. Localisation not only enables us to reduce foreign exchange risks Risk management and achieve cost levels appropriate to the mar- The Group’s risk management system is de- kets, but also to inject extra added value into signed to identify potential risks at any early growth markets. This generates considerable stage so that suitable countermeasures can be momentum for the economic development of the taken to avert the threat of loss to the Company, individual regions. Localisation means creation and any risks that might jeopardize its contin- of jobs in the regions in question. This upgrades ued existence can be ruled out. the locations where our facilities are based and paves the way for follow-up activities. Secondary The risk management system is an integral part and tertiary effects have a positive overall impact of the Volkswagen Group’s structure and work- on the infrastructure in general. Decisions to lo- flows and is embedded in its daily business pro- cate production facilities – and thus the relevant cesses. Events that entail a risk are identified suppliers – in a specific place give rise to new al- and assessed on a decentralized basis in the di- liances with schools and universities, for exam- visions and at the investees. Countermeasures ple, and attract further service-sector compa- are introduced immediately, their effects are as- nies. sessed and the information is incorporated into the planning in a timely manner. The results of The overall impact is to invest such a region – be the risk management process are used to sup- it in Chattanooga or Pune, in Kaluga or Chengdu port budget planning and controlling on an – with a new quality. For the Volkswagen Group, ongoing basis. The targets agreed in the budget localisation not only has economic benefits; it planning rounds are continually verified in re- also improves the prospects of sustainable struc- volving planning reviews. tural development in the regions concerned. At the same time, the results of risk mitigation measures that have already been taken are in- corporated into the monthly forecasts on fur- 25
  • 26. Compliance The Ombudsman system, introduced through- In 2010, we heightened our focus on transpar- out the Group in 2006, has also become success- ent corporate responsibility, creating the new fully established. Through this system, two in- Governance, Risk Compliance unit. The head dependent lawyers are available as ombudsmen of the unit is also the Group Chief Compliance to all employees via an international hotline. Officer of the Volkswagen Group, reporting di- The lawyers are bound by their obligation of se- rectly to the Chairman of the Board. His respon- crecy. sibilities include the introduction, control and monitoring of preventive measures. Further employee training and information events are planned for 2011. These will include We have drawn up a corporate Code of Conduct, measures and events aimed at specific target which was rolled out across the Group in 2010. groups as part of the new Compliance Pro- Employees were made aware of this through gramme, focusing on anti-trust and competition brochures, in the internal media and at infor- law. Additional compliance activities will also be mation events. All employees are able to contact devised in future, and the Compliance organisa- the Compliance organisation via an internal tion will be further expanded. 20 e-mail address. 21 As an anti-corruption measure, Volkswagen has been using an online learning program since 2009, designed specifically to increase employ- ee awareness. This program was rolled out to management and other employee groups of Volkswagen AG and also to other Group compa- nies. Face-to-face events were also arranged. Research and Financial Purchasing Production Distribution Development Services • Adaptation to local • Localised purchasing • Local production • Strong dealer • Local offer of customer needs throughout supply facilities for key network Financial Services • Local RD chain products • Adapted local Teams in regions marketing Market entry2 1 New: Quick Market Localisation creates new Pune expansion entry2 jobs and adds local value – 1 New: Quick Market Kaluga expansion entry2 substantial growth factors 1 Partial development capacity 2 Market entry planned for the local economy. 26
  • 27. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t Economy In the spotlight Volatility Market players are already reacting are only seventh when it comes to Economic stability Although the long-term global to inflation risks and turning to real operating profit. This is not good In the years ahead, three mega- growth trend is basically stable, assets such as gold, shares, commod- enough to achieve our targets for trends on the economic front will fluctuations around this trend are ities and real estate. This encourages 2018. be particularly important for increasing considerably. For example, speculative bubbles. Volkswagen: shifts in global the financial crisis is by no means Conclusions equilibrium, addressing financial over. Substantial risks to the world Another risk takes the form of Volkswagen already has a strong challenges in the face of growing economy include growing levels of persistent significant balance of presence in many important markets volatility, and the (re-)emergence national debt in many countries, trade and balance of payments and is profiting from global growth. of old and new competitors. the instability of the financial deficits, as in the present situation The challenge now is to achieve system, growth deficits in selected between the USA and China, because systematic growth in local Equilibrium industrialised countries, persistent these increase the underlying value-added, in order to continue The BRIC states are at the forefront imbalances of trade and current probability of protectionist measures. reducing dependence on exchange of the present economic recovery. account figures, and the amount of rates and the risk of barriers to trade. They are resuming a growth trend speculation in the markets. On top of this, speculators are Increasing localisation of products that is well above European and contributing to the great volatility and financial services is at the same North American levels and which Levels of national debt in several of the financial markets. The scale of time a central key to achieving will bring about substantial Eurozone countries remain critical. their influence is evident from crude market-oriented cost levels and medium-term shifts in global The resulting potential instability oil trading, for example: in recent adequate profitability worldwide. economic equilibrium. As a result, of the banking system and the years the number of speculative the economic power of the emerging uncertainty about the future of transactions has undergone such a This financial robustness is important markets will continue to increase. the Euro states tend to encourage massive increase that, these days, to ensure that Volkswagen is well sudden and sharp exchange-rate only about one seventh of all trans- equipped to face future crises. A large This opens up opportunities for fluctuations and cast a shadow actions physically involve crude oil. measure of flexibility and financial Volkswagen, with prospects of large over economic prospects. In many independence is absolutely essential sales volumes. The rapid rise in the countries the central banks are for dealing successfully with eco- prosperity of broad sections of the trying to combat this by pursuing an Competition nomic risks. Fluctuations in the population is creating new customer expansive monetary policy. In the The pace of competition in the global commodity and currency markets groups, and high priority must be short term this has many beneficiar- markets is increasing. By way of must not be allowed to throw us off given to recruiting these groups. ies, including Volkswagen which has illustration, the market shares of the course, any more than falling unit Localised products adapted to already felt the substantial benefit four largest manufacturers in China, sales in times of recession. individual markets are needed to of the economic upswing. In the the USA and Brazil have shown a fire their enthusiasm. And to ensure medium term, however, this significant drop over the past We are acting from a position of sustainable success, the contribution approach involves a risk of higher decade. strength and are well on the way to that these products make to inflation, which could have a achieving the ambitious targets of earnings needs to be stepped up considerable destabilising effect Despite this difficult situation, our Strategy 2018. substantially. on the economic system. Volkswagen is doing very well on the whole. In global terms, we rank third among car manufacturers on the basis of unit sales. By contrast, we 27
  • 28. 3 Strategie Management Strategie 2018 Management Society Employment Herausforderungen Demographic change Advancing women and promoting diversity Social responsibility 28
  • 29. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t Building a top team. From vocational training to skills development at home and abroad, and from a forward-looking pay policy to employee involvement, the Volkswagen Group is working with its employees to set the highest standards right across its operations. Our employees also play an active part in a wide variety of social contexts. 29
  • 30. A top team Employment meet present and future challenges if its em- The Volkswagen Group’s Strategy 2018 sets out ployees – from apprentices to top managers – how it intends to achieve its goal of becoming consistently turn in an outstanding perfor- the car industry’s global market leader in terms mance to ensure that innovation and product of unit sales and top the rankings in terms of quality remain at the very highest level in the customer satisfaction and profitability. On top long term. of that, Volkswagen also wants to be the most attractive employer in the automotive sector by Securing outstanding performance, generating 2018. The Group’s business strategy is a multi- success and giving employees a share in the dimensional stakeholder strategy that balances profits are central to Volkswagen’s HR strategy. the interests of customers, shareholders, em- Securing the outstanding performance re- ployees and other stakeholders. quired to assure Volkswagen of pole position in the international automobile industry means In the 2010 financial year, the Volkswagen having a top team, an HR principle that applies Group has made full use of the opportunities of- across the Group’s global operations. And it is a fered by its superb current range of models, principle that is particularly important when winning new customers and expanding its mar- the Group is growing, as it has done over the ket shares across the globe. However, it can only past few years. Employment Circle of success Excellent No. 1 performance Top team Good performance Success Top employer Good The circle of success from our team “Strategy 2018” shows that only an attractive employer can re- Good cruit a good team and develop it employer into a top team. And only a top team can turn in excellent performance. 30
  • 31. S t r at e g y | E c o n o m y | S o c i e t y | E n v i r o n m e n t Including the Chinese joint ventures, the Volks­ Group to achieve its aim of recruiting even more wagen Group employed a total of 399,381 people apprentices. worldwide on December 31, 2010, 8.4 percent more than in December 2009 (368,500 employ- In September 2010, the number of employees ees). But as our workforce grows, so too does in vocational training across the Volkswagen the complexity of the Group. The number of pro- Group exceeded 10,000 for the first time. At duction sites, the range of technology used and the end of 2010, Volkswagen AG was training the diversity of processes are expanding across approximately 4,500 apprentices and students the Group as it diversifies from vehicles with in 32 professions and 21 courses at its six Ger- conventional drive into hybrid- and electric- man locations alone (Wolfsburg, Hanover, drive vehicles. It is therefore more important Braunschweig, Kassel, Emden and Salzgitter) than ever that the Group has access to the right under the StiP integrated study and traineeship skills in the right place at the right time. scheme. In February 2010, the newly established Volkswagen Osnabrück GmbH also took on a further 99 StiP apprentices and students from Training and skills development the insolvent Karmann company. Over the next few years, the need for vocational training and skills development and transfer is While undergoing vocational training at Volks­ set to increase across the Group. Volkswagen wagen, apprentices can benefit from a wide sets great store by being a learning and teaching range of additional training programmes and organisation and is making every effort to en- events. These include cooperation between sure that it has the appropriate skills levels Volkswagen’s vocational training division and across its locations. “Jugend gründet”, a nationwide online busi- ness/high-tech competition offering a prize for Outstanding vocational training and systematic the best product or business idea. The Company supervisor training are crucial to our HR devel- also organises the “ProTalent” and “Pro- opment strategy. The Volkswagen brand is in- Mechaniker” competitions, which offer appren- troducing a global supervisory qualification to a tices and students within the Volkswagen Group common standard, so that we can employ highly an opportunity to combine their technical talent skilled supervisors at all our locations. The aim with their passion for motor sport. is to make the supervisor grade a key position in all locations, and training and skills develop- It’s not all about work on the factory floor or Volkswagen apprentices’ commit- ment programmes are currently being designed in the back office, though. For 20 years, Volks- ment to the Auschwitz Memorial to achieve this. wagen apprentices have been involved in the is recognised worldwide. Auschwitz Memorial and Museum. Since 1990, Volkswagen sets great store by its vocational Volkswagen has been sending four groups of training, and the majority of its highly skilled apprentices to Auschwitz each year to spend two workers join the Company via this route. The weeks with young Poles learning, helping and Company’s locations in Germany have long-es- engaging with concentration camp survivors. tablished, top-quality vocational training facili- The groups are briefed and supervised by the In- ties, which are to be the model for all Volkswa- ternational Auschwitz Council and our subsidi- gen locations in future. This will also enable the ary, Volkswagen Coaching GmbH. Over 1,400 31