Friday, November 17, 2006

Volkswagen Board makes Winterkorn appointment official

Volkswagen's Supervisory Board today has made their appointment of Dr. Martin Winterkorn official. He is to replace Dr. Bernd Pischetsrieder as Chairman of the Board of Management effective January 1, 2007. Pischetsrieder will be on the job until December 31, 2006.

Pischetsrieder will continue to work for Volkswagen AG in various areas and may include overseeing the MAN and Scania merger.

During the meeting, Volkswagen also touched on financials, a new plant they plan to build in India, and comments on the Man and Scania merger.

Meeting details after the jump.

Source: Volkswagen AG.
WOLFSBURG, Germany - The Supervisory Board of Volkswagen Aktiengesellschaft today agreed to appoint Prof. Dr. Martin Winterkorn as Chairman of the Board of Management effective January 1, 2007.

The Supervisory Board also resolved that Dr. Bernd Pischetsrieder will leave the Board of Management effective December 31, 2006.

Dr. Pischetsrieder will continue to work for the Group and will assume functions in the interests of the Group.

The Supervisory Board will decide at a later date on a successor to Dr. Winterkorn in his present function as Chairman of the Board of Management of Audi AG.

Supervisory Board discusses Group planning

At its meeting on Friday, the Supervisory Board also discussed the Group’s current financial and capital expenditure planning for the period 2007 to 2009. According to this, Volkswagen will be investing €24.7 billion in the Automotive Division in the coming three years. In addition to investments in property, plant and equipment, this amount also includes additions to capitalized development costs and investments in financial assets.

€17.7 billion of the total amount is accounted for by investments in property, plant and equipment, of which €10.7 billion will be invested in Germany alone. After a relatively low capex/revenue ratio in recent years, this ratio will be maintained at a competitive long-term level of below six percent, as in the previous planning round.

At €11.8 billion, the bulk of the Group’s spending on property, plant and equipment for the Automotive Division will be devoted to modernizing and expanding the product range. The focus will be on successor models and new derivatives in almost all vehicle classes, and will enable the Volkswagen Group to systematically continue its new model rollout to ensure even greater market penetration. With regard to power trains, new generations of petrol engines offering improved performance, fuel consumption and emissions will be introduced, and diesel engines will be switched to common rail technology. Production capacity for double clutch gearboxes, an area in which the Group continues to offer globally unique technology, will be aligned with the growing demand.

Indian investment project approved

The Supervisory Board also approved the plans by the Board of Management for an investment project in India. Volkswagen will build a production plant in the north of the city of Pune in the state of Maharashtra. Under the current plans, the new plant will employ around 2,500 people and will start production of a small passenger car model in the second half of 2009.

India is one of the fastest growing automotive markets worldwide, but high import duties on vehicles mean that any meaningful market presence can only be achieved by establishing domestic production facilities. Volkswagen examined a number of locations in India in detail and chose the Pune region because of its economic environment, good logistics links and sufficiently strongly established supplier structure. The region also offers qualified employees who will ensure that production meets appropriate quality standards.

Supervisory Board reiterates resolutions on MAN and Scania

Volkswagen’s Supervisory Board continues to support the merger of MAN and Scania and confirmed its two resolutions adopted on October 15. It continues to seek an amicable solution, but is open to other strategies if necessary.

Volkswagen will offer MAN its interest in Scania if MAN holds at least 56.01 percent of Scania’s voting rights and at least 71.31 of its share capital.

However, if it is clear that the offer will not be successful, Volkswagen reserves the right to seek any alternative solution.


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