Development of automotive markets


Particularly in our core European markets, we expect 2010 to be a difficult year despite the general economic recovery. Many vehicle purchases were brought forward to 2009 due to government incentive programs. To some extent, this has pushed the negative impact of the financial and economic crisis on the automotive market into 2010. Rising commodity prices and tighter emissions standards will also have an adverse effect on demand for automobiles.

As many economic stimulus and labor market programs in Western Europe are expiring, we anticipate a downturn in the passenger car market in 2010. We expect significantly weaker demand in Germany in particular, but a continuing positive trend in the strategically important markets of China and India. For North America, we are forecasting a slight recovery in the market. Global demand for new vehicles is likely to be slightly higher year-on-year in 2010.

The Volkswagen Group is well placed to weather the difficult economic conditions. Our broad product range incorporating the latest generation of consumption-optimized engines gives us a global competitive advantage. Our goal of being able to offer mobility and innovations for everyone is also helping to strengthen our competitive position for the long term.

North America

Because of the financial and economic crisis, we expect the economic climate in the USA to remain weak. The market is also being adversely impacted by higher fuel prices and the reluctance to lend. We nevertheless expect a slightly positive trend in the US automotive market in 2010 due to the improvement in the economic outlook. The Canadian and Mexican markets for passenger cars and light commercial vehicles are also likely to show the first signs of a recovery in demand.

South America

The South American markets, too, will benefit from the stabilizing global economy. Despite the gradual expiry of support programs, we expect demand to rise moderately in 2010, particularly in Brazil.

Asia-Pacific

Overall, we continue to see growth potential in the markets of the Asia-Pacific region in 2010. The markets in China and India in particular will benefit from rising demand for individual mobility. In Japan, we expect the negative market trend to continue in 2010 despite the support for fuel-efficient vehicles.

Europe/Remaining markets

In Western Europe (excluding Germany), we expect demand for passenger cars to fall sharply due to the expiry of support programs. The markets of Central and Eastern Europe will continue to suffer the effects of the financial and economic crisis in 2010. Although some countries are showing signs of stabilizing, we expect demand in this region to decline overall.

After a weak 2009, the South African automotive market is likely to stabilize at a low level.

Germany

We anticipate that 2010 will be a difficult year for the German market. Demand for new vehicles will fall sharply despite the slight improvement in economic conditions. The government scrapping premium resulted in strong demand in the private sector in the reporting period. In many cases, however, the decision to purchase a vehicle was merely brought forward in order to benefit from the more favorable terms of purchase. We expect the German passenger car market to touch bottom in 2010, but to continue to be impacted by the effects of the crisis over the coming years.

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