Capacity Expansions, Acquisitions, Sales Milestones Hallmarks of Volkswagen’s 2012

Highlights of the year’s major events affecting the Volkswagen Group:

• Volkswagen starts off the year setting a goal to reduce the environmental impact of its manufacturing plants 25% by 2018, cutting energy use, limiting waste and trimming emissions.
• Porsche announces at the North American International Auto Show in Detroit it will increase production to 200,000 vehicles by 2018, up from about 119,000 in 2011. “Our biggest challenge is to manage our growth in a controlled way,” CEO Matthias Mueller tells Reuters.
• Skoda has a volume-growth agenda, as well, saying at the start of the year it plans to produce 1 million vehicles annually no later than 2014, up from about 879,000 in 2011.
• Audi confirms to WardsAuto in January it will build an assembly plant in North America. Official word follows in April that a site has been selected in Mexico, with output of Q5 cross/utility vehicles slated to begin in 2016.
• VW Australia cuts the ribbon on a new A$40 million ($42.3 million) headquarters outside of Sydney. The operation includes office space, a parts warehouse and a training center for dealer staff.
• U.S. testing begins in February of all-electric Golf models at the auto maker’s Electronics Research Lab in Belmont, CA. Market introduction of the cars is set for late-2013.
• Financial filings show VW CEO Martin Winterkorn nearly doubled his pay in 2011, earning €17.5 million ($23 million) in salary, bonuses and other incentives, making him the highest paid CEO among Germany’s top 30 companies.
• Volkswagen is dealt a legal blow in March by the General Court of the European Union, which rejects a bid to block Suzuki from calling a performance model the Swift GTi on grounds it would infringe on VW’s brand. The suit largely is seen as a sideshow in the squabbles between the two auto makers over whether VW should sell its 20% stake in Suzuki. Relations between the two auto makers soured in 2011 shortly after the partnership was formed.
• Audi agrees to buy Italian motorcycle maker Ducati for €860 million ($1.12 billion) in mid-April, a portfolio move that puts the car maker on a par with rival BMW.
• SEAT uses the Beijing auto show in May to mark its official entry into the Chinese market. Starting out with eight dealerships, it expected to expand to 15 showrooms by the end of the year. The Leon is the first product offering, to be followed later in the year by the new Ibiza.
• In June, Audi’s U.S. unit loses its top executive, Johan de Nysschen, to Nissan, where he is named head of its Infiniti luxury-vehicle division worldwide.
• VW finally wraps up its acquisition of Porsche midyear, purchasing the remaining half of the sports car maker for €4.46 billion ($5.79 billion), plus an assumption of €2.5 billion ($3.2 billion) in debt. “Together we are more capable than ever of becoming the best auto company on the planet,” Winterkorn declares.
• With sports-car maker Porsche and motorcycle-producer Ducati firmly in the fold, Volkswagen says in August it is done for now on the acquisition front. “We have enough to do at the moment in taking our 12 brands to where we want to be,” Winterkorn tells Germany’s Handelsblatt newspaper.
• SEAT uses the Moscow auto show to announce it will expand its product range in Russia with sales of the Alhambra multipurpose vehicle in the fall. That brings the lineup to four models, including the Ibiza and Leon cars and Altea Freetrack cross/utility. SEAT reveals it will hike its dealership count in the market from 22 to 25 by year’s end.
• The all-new Golf is rolled out to the media in Germany ahead of its Paris auto show public debut. Although the car’s design is a conservative re-do of the current car, the new model is lighter and more fuel-efficient.
• It also is built on VW’s new MQB architecture that is expected to underpin a number of vehicles for the auto maker’s various brands. The MQB is seen providing VW with potentially unrivaled purchasing power and manufacturing flexibility.
• Despite a slowdown in European sales industrywide, Audi hits the 1 million-unit mark in global deliveries for the year in September, achieving the result in just nine months for the first time. This is “clear evidence that we are realizing our strategic goals in the right way,” declares sales and marketing chief Luca de Meo.
• The tally of 1,097,500 vehicles represents a 12.8% gain on like-2011. Strong double-digit growth is seen in the key markets of the U.S. (26.5%) and China (20.5%). Sales in Russia soar 57.3%, though volume totals just 25,442 units.
• The European market malaise finally begins to hit Volkswagen as the year winds down, forcing the auto maker to cut production of its Passat model in Germany in October and reduce overall vehicle production by 300,000 units through the remainder of 2012.
• Reports indicate VW will end the year having produced 9.4 million vehicles, down from the 9.7 million-unit target set when 2012 began. It also reportedly is forced to revise its sales forecast for the year, trimming expectations by some 140,000 vehicles.
• Porsche reports a 20.2% rise in worldwide sales through the first nine months of the year, with volume reaching 103,245 vehicles. Operating profit rises 22.9% vs. year-ago, on a 28.1% boost in revenues.
• “We have almost matched the results of the entire previous year after only nine months in 2012,” notes Chief Financial Officer Lutz Meschke. “And we definitely expect to outperform the 2011 record year in terms of sales, revenue and operating profit.”
• Volkswagen’s strong third-quarter sales in China of 704,991 units, up 21%, make it a threat to supplant General Motors as the country’s top auto maker. With just one quarter left in the year, GM sees its lead in China whittled down to just 77,000 units.
• VW Chairman Ferdinand Piech forecasts continued growth in China of at least 9% in 2013, telling Bloomberg in Tianjin, “You have so many people without cars, and we expect a few buyers for our products.”
• Reports surface in the year’s final quarter that VW is close to giving the green light to a long-rumored cross/utility vehicle that would be produced at its U.S. plant. The vehicle would ride on the Passat platform and be sized to compete with such models as the Ford Explorer.
• VW introduces a new Santana sedan for the Chinese market in late October. The car features the auto maker’s latest 1.4L and 1.6L 4-cyl. gasoline engines, more rear-seat and cargo room and a host of safety and comfort equipment. VW has sold nearly 4 million Santanas in China since introducing the car there in the mid-1980s.
• Emilio Saenz adds the title of president to his position of CEO at Volkswagen Argentina in October, replacing a retiring Viktor Klima, who had held the post since 2000. Saenz was named CEO of the operation in November 2011.
• Volkswagen Group sees operating profits decline in the third quarter, a result of the tougher economic climate in Europe. “We have always said that the second half of the year would be more difficult, so our performance is in line with expectations,” says CFO Hans Dieter Potsch.

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