Volkswagen Group Introduces “Formotion” Package of Measures in Response to Continuing Difficult Economic Environment

The Volkswagen Group is responding to the continuing uncertain perspectives in world automobile markets with an extensive programme of measures called “ForMotion”. The programme contains a package of actions designed to substantially reinforce the performance of all Group companies.

Commenting in Wolfsburg on Friday, Dr. Bernd Pischetsrieder, Chairman of the Board of Management, said: “Our goals are to increase revenue, cut costs and further reduce Group investment.” The ongoing model offensive would remain intact. In total, the programme would enhance the earnings power of the Group in the short- and medium-term. According to Pischetsrieder, “ForMotion” would cover all areas of the Volkswagen Group, and the impact of the programme would already be visible in the 2004 financial statements.

Pischetsrieder continued: “We have to note the fact that, contrary to all forecasts, economic conditions in the most important automobile markets still have not turned the corner. Also, no positive impulse can be expected from exchange rates in the foreseeable future. This is why we are again noticeably stepping up the pace of ongoing process optimization. In addition to the positive effects of this measures, we are, however, introducing extensive additional initiatives to safeguard earnings. All activities must be closely re-examined in terms of economic efficiency.”

The Chairman of the Board of Management was confident that the “ForMotion” package of measures, comprising seven core elements, would achieve this goal.

Volkswagen will present details of the programme at the Annual Press Conference in Wolfsburg on 9 March.

At its meeting today, the Supervisory Board took note of the programme and welcomed the measures. The Supervisory Board also approved the Board of Management’s proposal concerning the dividend.

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