Porsche 2011 Annual Report Download - page 47

2016 will be at a competitive level of around 6 per-
cent on average.
At 32.7 billion euro (roughly 66 percent), the
Volkswagen group will spend a large proportion of the
total amount to be invested in property, plant and
equipment in the Automotive Division on modernizing
and extending the product range for all its brands.
The main focus will be on new vehicles, derivatives
and successor models in almost all vehicle classes,
which will be based on the modular toolkit technology
and related components. This will allow the Volks-
wagen group to systematically continue its model
rollout with a view to tapping new markets and seg-
ments. In the area of powertrain production, the
group will launch new generations of engines offering
further improvements in performance, fuel consump-
tion and emission levels. In particular, the group is
pressing ahead with the development of hybrid and
electric motors.
In addition, the Volkswagen group will make
cross-product investments of 17.1 billion euro over the
next five years. Due to the group's high quality targets
and the continuous improvement of its production
processes, the new products also require changes to,
and additional capacity in, the press shops, paint
shops and assembly facilities. Outside the production
area, investments are mainly planned for the areas of
development, quality assurance, sales, genuine parts
supply and information technology.
Planned investment activities will also include
expenditure on wind, solar and hydroelectric power, in
order to supply the group's factories with renewable
energies.
The Volkswagen group's objective is to
finance its investments in the Automotive Division
using internally generated funds. The group expects
cash flows from operating activities to amount to 90.7
billion euro over the planning period. As a result, the
funds generated are expected to exceed the Automo-
tive Division’s investment requirements by 28.3 billion
euro, further improving the group's liquidity position.
The group expects net cash flow in the Automotive
Division to develop positively in 2012 and 2013.
Significant events at the Volkswagen group
Material changes in equity investments
The Volkswagen group took another signifi-
cant step towards forming an integrated automotive
group with Porsche by acquiring Porsche Holding
Salzburg’s trading business. The trading company
was transferred on 1 March 2011 at a price of 3.3
billion euro. Porsche Holding Salzburg is one of the
most successful and profitable automobile trading
companies in the world, with a strong presence par-
ticularly in Austria, the rest of western Europe and
southeast Europe, as well as in China.
Over the course of the reporting year, Volks-
wagen acquired 9.75 percent of the voting rights of
SGL Carbon SE, Wiesbaden. The SGL group is one of
the world’s leading producers of carbon, an extremely
lightweight but very strong material that can be used
to reduce vehicle weights.
On 9 November 2011, Volkswagen AG in-
creased its interest in MAN SE, Munich, to 55.90
percent of the voting rights and 53.71 percent of the
share capital after making a mandatory public offer to
the shareholders. Closer cooperation between MAN,
Scania and Volkswagen is expected to lead to sub-
stantial synergies in the future in the areas of pro-
curement, development and production.
Investment planning of the Volkswagen group
Based on its current planning, the Volks-
wagen group will invest a total of 62.4 billion euro in
the Automotive Division in the period from 2012 to
2016. Besides investments in property, plant and
equipment, this amount includes additions to capital-
ized development costs of 11.6 billion euro and in-
vestments in financial assets of 1.0 billion euro, net of
proceeds from asset disposals. Investments in prop-
erty, plant and equipment will account for 49.8 billion
euro, more than half of which (57 percent) will be
invested in Germany alone. The ratio of capital ex-
penditure to sales revenue in the period from 2012 to
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