Obligation Volkswagon 3.5% ( XS2187689034 ) en EUR

Société émettrice Volkswagon
Prix sur le marché refresh price now   99.57 %  ▼ 
Pays  Allemagne
Code ISIN  XS2187689034 ( en EUR )
Coupon 3.5% par an ( paiement annuel )
Echéance Perpétuelle



Prospectus brochure de l'obligation Volkswagen XS2187689034 en EUR 3.5%, échéance Perpétuelle


Montant Minimal /
Montant de l'émission /
Prochain Coupon 17/06/2025 ( Dans 17 jours )
Description détaillée Volkswagen est un constructeur automobile allemand, l'un des plus grands fabricants mondiaux de véhicules, produisant un large éventail de voitures, de SUV et de véhicules utilitaires, sous plusieurs marques dont Audi, Porsche, Skoda et SEAT.

L'Obligation émise par Volkswagon ( Allemagne ) , en EUR, avec le code ISIN XS2187689034, paye un coupon de 3.5% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle









VOLKSWAGEN INTERNATIONAL FINANCE N.V.
(public limited liability corporation (naamloze vennootschap) under the laws of the Netherlands)
EUR 1,500,000,000 Undated Subordinated Notes subject to Interest Rate Reset with a First Call Date in 2025
Issue Price: 100%
EUR 1,500,000,000 Undated Subordinated Notes subject to Interest Rate Reset with a First Call Date in 2029
Issue Price: 100%
guaranteed on a subordinated basis by
VOLKSWAGEN AKTIENGESELLSCHAFT
(a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany)

Volkswagen International Finance N.V. (the "Issuer" or "VIF") will issue EUR 1,500,000,000 in aggregate principal amount of undated subordinated notes subject to interest
rate reset with a first call date on June 17, 2025 (the "NC5 Notes") and EUR 1,500,000,000 in aggregate principal amount of undated subordinated notes subject to interest rate
reset with a first call date on June 17, 2029 (the "NC9 Notes" and, together with the NC5 Notes, the "Notes") in a denomination of EUR 100,000 each on June 17, 2020 (the
"Issue Date") at an issue price of 100% of their principal amount in respect of the NC5 Notes and 100% of their principal amount in respect of the NC9 Notes (the "Offering").
The Notes are unconditionally and irrevocably guaranteed, on a subordinated basis, by Volkswagen Aktiengesellschaft (the "Guarantor" or "Volkswagen AG" and together with
its consolidated subsidiaries, the "Volkswagen Group" or "Volkswagen").
The NC5 Notes shall bear interest on their principal amount (i) from and including June 17, 2020 (the "NC5 Interest Commencement Date") to but excluding June 17, 2025 (the
"NC5 First Call Date") at a rate of 3.500% per annum; (ii) from and including the NC5 First Call Date to but excluding June 17, 2030 (the "First NC5 Step-up Date") at the
relevant 5-year swap rate for the relevant Reset Period (as defined herein) plus a margin of 374.6 basis points per annum (no step-up); (iii) from and including the First NC5 Step-
up Date to but excluding June 17, 2045 (the "Second NC5 Step-up Date") at the relevant 5-year swap rate for the relevant Reset Period plus a margin of 399.6 basis points per
annum (including a 25 basis points step-up); and (iv) from and including the Second NC5 Step-up Date to but excluding the date on which the Issuer redeems the Notes in whole
at the relevant 5-year swap rate for the relevant Reset Period plus a margin of 474.6 basis points per annum (including a further 75 basis points step-up). During each such period
interest is scheduled to be paid annually in arrear on June 17 of each year (each an "NC5 Interest Payment Date"), commencing on June 17, 2021.
The NC9 Notes shall bear interest on their principal amount (i) from and including June 17, 2020 (the "NC9 Interest Commencement Date") to but excluding June 17, 2029 (the
"NC9 First Call Date") at a rate of 3.875% per annum; (ii) from and including the NC9 First Call Date to but excluding June 17, 2030 (the "First NC9 Step-up Date") at the
relevant 9-year swap rate for the relevant Reset Period (as defined herein) plus a margin of 395.8 basis points per annum (no step-up); (iii) from and including the First NC9 Step-
up Date to but excluding June 17, 2049 (the "Second NC9 Step-up Date") at the relevant 9-year swap rate for the relevant Reset Period plus a margin of 420.8 basis points per
annum (including a 25 basis points step-up); and (iii) from and including the Second NC9 Step-up Date to but excluding the date on which the Issuer redeems the Notes in whole
at the relevant 9-year swap rate for the relevant Reset Period plus a margin of 495.8 basis points per annum (including a further 75 basis points step-up). During each such period
interest is scheduled to be paid annually in arrear on June 17 of each year (each an "NC9 Interest Payment Date"), commencing on June 17, 2021.
The Issuer is entitled to defer payments of interest on any Interest Payment Date (as defined in the Terms and Conditions) ("Arrears of Interest") and may pay such Arrears of
Interest voluntarily at any time, but only has to pay such Arrears of Interest under certain circumstances as laid out in the terms and conditions of the NC5 Notes (the "NC5 Note
Terms and Conditions") or the terms and conditions of the NC9 Notes (the "NC9 Note Terms and Conditions" and, together with the NC5 Note Terms and Conditions, the
"Terms and Conditions"), as applicable.
Each issue of the Notes is redeemable, in whole but not in part, at the option of the Issuer at their principal amount plus accrued and unpaid interest and upon payment of any
outstanding Arrears of Interest on the NC5 First Call Date for the NC5 Notes and on the NC9 First Call Date for the NC9 Notes and on any respective Interest Payment Date
thereafter. The Issuer may also redeem each issue separately in whole but not in part at any time before the respective first call dates following a Rating Event, an Accounting
Event, a Tax Deductibility Event or a Gross-up Event at the Early Redemption Amount (each as defined in the applicable Terms and Conditions). Additionally the Issuer may
redeem each issue separately, in whole but not in part, if any of the Issuer, the Guarantor or any of the Guarantor's subsidiaries has, severally or jointly, purchased or redeemed at
least 80% of the originally issued aggregate principal amount of the Notes of such issue.
Each of the Notes will initially be represented by a temporary global note, without interest coupons, which will be exchangeable in whole or in part for a permanent global note
without interest coupons, not earlier than 40 days after the Issue Date, upon certification as to non-U.S. beneficial ownership. The Notes are issued in bearer form with a
denomination of EUR 100,000 each.
The Notes are rated BBB- by S&P Global Ratings Europe Limited ("S&P") and Baa2 by Moody's Investors Service Ltd. ("Moody's" and, together with S&P, the "Rating
Agencies"). A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating
organization. As of the date of this Prospectus, each of the Rating Agencies is a credit rating agency established in the European Union or in the United Kingdom and registered
under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of September 16, 2009 on credit rating agencies (as amended) (the "CRA Regulation"). In
general, European regulated investors are restricted from using a credit rating for regulatory purposes if such credit rating is not issued by a rating agency established in the
European Union or in the United Kingdom and registered under the CRA Regulation. A list of credit rating agencies registered under the CRA Regulation is available for viewing
at the ESMA's website.
This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 6.3 of Regulation (EU) No 1129/2017 of the European Parliament and of the Council
of June 14, 2017 (as amended, the "Prospectus Regulation"). This Prospectus will be published in electronic form together with all documents incorporated by reference on the
website of the Luxembourg Stock Exchange (www.bourse.lu).
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg ("CSSF") in its capacity as competent authority under the Prospectus
Regulation. The CSSF only approves this Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such
approval should neither be considered as an endorsement of the Issuer nor of the quality of the securities that are the subject of this Prospectus. By approving this Prospectus, the
CSSF gives no undertaking as to the economic and financial soundness of the transaction or the quality or solvency of the Issuer Article 6(4) of Luxembourg Law of July 16, 2019
on Prospectuses for securities (the "Prospectus Law").

Prospective investors should be aware that an investment in the Notes involves a risk and that, if certain risks, in particular those described under "Risk Factors" occur,
the investors may lose all or a very substantial part of their investment.
This document does not constitute an offer to sell, or the solicitation of an offer to buy Notes in any jurisdiction where such offer or solicitation is unlawful. The Notes have not
been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and are subject to U.S. tax law requirements. Subject to certain
exceptions, the Notes may not be offered, sold or delivered within the United States or to U.S. persons. For a further description of certain restrictions on the offering and sale of
the Notes and on the distribution of this document, see "Selling Restrictions".
This Prospectus will be valid until June 11, 2021 and may in this period be used for admission to trading of the Notes on a regulated market. In case of a significant new factor,
material mistake or material inaccuracy relating to the information included in this Prospectus which may affect the assessment of the Notes, the Issuer will prepare and publish a
supplement to the Prospectus without undue delay in accordance with Article 23 of the Prospectus Regulation. The obligation of the Issuer to supplement this Prospectus will
cease to apply once the Notes have been admitted to trading on the regulated market of the Luxembourg Stock Exchange and at the latest upon expiry of the validity period of this
Prospectus.
Joint Bookrunners
Barclays
BNP PARIBAS
BofA Securities
Deutsche Bank
RBC Capital
Markets
The date of this Prospectus is June 11, 2020


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IMPORTANT NOTICES
RESPONSIBILITY STATEMENT
Each of Volkswagen International Finance N.V. (the "Issuer" or "VIF") with its corporate domicile in
Amsterdam, the Netherlands, and Volkswagen Aktiengesellschaft (the "Guarantor" or "Volkswagen AG"
and, together with its direct and indirect subsidiaries and joint ventures at the date of this Prospectus,
"Volkswagen" or the "Volkswagen Group") having its corporate domicile in Wolfsburg, Germany,
accepts responsibility for the information contained in and incorporated by reference into this Prospectus
including the English language translations of the Terms and Conditions and the Guarantee and hereby
declares that, having taken all reasonable care to ensure that such is the case, the information contained in
this Prospectus is, to the best of its knowledge, in accordance with the facts and does not omit anything
likely to affect its import.
Each of the Issuer and the Guarantor further confirms that (i) this Prospectus contains all information with
respect to the Issuer as well as to the Guarantor and their respective subsidiaries and affiliates and to the
Notes and the Guarantee which is material in the context of the issue and offering of the Notes, including
all information which, according to the particular nature of the Issuer, the Guarantor and the Notes and the
Guarantee is necessary to enable investors and their investment advisers to make an informed assessment
of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer and the
Guarantor and of the rights attached to the Notes and the Guarantee; (ii) the statements contained in this
Prospectus relating to the Issuer, the Guarantor, the Notes and the Guarantee are in every material particular
true and accurate and not misleading; (iii) there are no other facts in relation to the Issuer, the Guarantor,
the Notes or the Guarantee the omission of which would, in the context of the issue and offering of the
Notes, make any statement in the Prospectus misleading in any material respect; and (iv) reasonable
enquiries have been made by the Issuer to ascertain such facts and to verify the accuracy of all such
information and statements.
This Prospectus should be read and understood in conjunction with any supplement hereto and with any
other documents incorporated herein by reference.
To the fullest extent permitted by law, neither the Joint Lead Managers nor any other person mentioned in
this Prospectus, except for the Issuer and the Guarantor, is responsible for the information contained in this
Prospectus or any other document incorporated herein by reference, and accordingly, and to the extent
permitted by the laws of any relevant jurisdiction, none of these persons accepts any responsibility for the
accuracy and completeness of the information contained in any of these documents. The Joint Lead
Managers have not independently verified any such information and accept no responsibility for the
accuracy thereof.
Each investor contemplating purchasing any Notes should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer and of the
Guarantor. Neither this Prospectus nor any other information supplied in connection with the Notes should
be considered as a recommendation by the Issuer, the Guarantor or the Joint Lead Managers to a recipient
hereof and thereof that such recipient should purchase any Notes.
US SELLING RESTRICTIONS
The offer, sale and delivery of the Notes and the Guarantee and the distribution of this Prospectus in certain
jurisdictions are restricted by law. Persons into whose possession this Prospectus comes are required by the
Issuer, the Guarantor and the Joint Lead Managers to inform themselves about and to observe any such
restrictions. In particular, the Notes and the Guarantee have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "Securities Act"). The Notes are subject to U.S. tax
law requirements. Subject to certain limited exceptions, the Notes and the Guarantee may not be offered,
sold or delivered within the United States of America (the "United States") or to U.S. persons. For a further
description of certain restrictions on offerings and sales of the Notes and the Guarantee and distribution of
this Prospectus (or of any part thereof) see "Selling Restrictions."
NOTICE
No person is authorized to give any information or to make any representations other than those contained
in this Prospectus and, if given or made, such information or representations must not be relied upon as

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having been authorized by or on behalf of the Issuer, the Guarantor or Barclays Bank Ireland PLC, BNP
Paribas, BofA Securities Europe SA, Deutsche Bank Aktiengesellschaft or RBC Europe Limited (together,
the "Joint Lead Managers" or the "Managers"). Neither the delivery of this Prospectus nor any offering
or sale of any Notes made hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Issuer or the Guarantor or any of its affiliates since the date of this
Prospectus, or that the information herein is correct at any time since its date.
FORWARD LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements, in particular statements using the words
"believes", "anticipates", "intends", "expects" or other similar terms. This applies in particular to statements
under the captions "Description of the Guarantor" and "Description of the Issuer" and statements elsewhere
in this Prospectus relating to, among other things, the future financial performance, potential synergies to
be realized in connection with potential acquisitions, plans and expectations regarding developments in the
business of the Issuer, the Guarantor and the Volkswagen Group. These forward-looking statements are
subject to a number of risks, uncertainties, assumptions and other factors that may cause the actual results,
including the financial position and profitability of the Issuer and the Guarantor, to be materially different
from or worse than those expressed or implied by these forward-looking statements. Neither the Issuer nor
the Guarantor assume any obligation to update such forward-looking statements and to adapt them to future
events or developments.
This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other
than the Notes offered hereby and does not constitute an offer to sell or a solicitation of an offer to buy any
Notes offered hereby to any person in any jurisdiction in which it is unlawful to make any such offer or
solicitation to such person.
CURRENCY
In this Prospectus all references to "", "EUR" or "Euro" are to the currency introduced at the start of the
third stage of the European economic and monetary union, and as defined in Article 2 of Council Regulation
(EC) No 974/98 of 3 May 1998 on the introduction of the Euro, as amended, and all references to "U.S.$"
or "USD" are to United States dollars.
PRESENTATION OF FINANCIAL DATA
The audited consolidated financial statements of Volkswagen AG as of and for the years ended December
31, 2019 and December 31, 2018 (respectively, the "2019 Annual Financial Statements" and the "2018
Annual Financial Statements", together, the "Annual Financial Statements") were prepared in
accordance with International Financial Reporting Standards, as adopted by the European Union ("IFRS").
The unaudited condensed consolidated interim financial statements of Volkswagen AG as of and for the
three-month period ended March 31, 2020 (the "Interim Financial Statements" and, together with the
Annual Financial Statements, the "VWAG Financial Statements") were prepared on the basis of
International Financial Reporting Standards applicable to interim financial reporting as adopted by the
European Union.
The audited financial statements of the VIF as of and for the years ended December 31, 2019 and December
31, 2018 (respectively, "Financial Statements 2019 of VIF" and the "Financial Statements 2018 of VIF",
together the "VIF Financial Statements", and together with the VWAG Financial Statements, the
"Financial Statements") have been prepared by the VIF's management in accordance with "Dutch GAAP",
which term is used to indicate the whole body of authoritative Dutch accounting literature including the
Dutch Civil Code and the Framework and the Guidelines on Annual Reporting from the Dutch Accounting
Standards Board (collectively referred to as "Dutch GAAP").
Unless otherwise specified, the financial information analysis included or incorporated by reference in this
Prospectus is based on the Financial Statements. Where financial information in this Prospectus is labeled
"audited", it has been taken from the Financial Statements. The label "unaudited" is used to indicate that
financial information has not been taken from the Financial Statements but has been derived from the
Annual Financial Statements, or the Issuer's Financial Statements or from Volkswagen's or the Issuer's
accounting records or from management reporting and has not been audited. As a result, not all figures may
be comparable.

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The financial information and related discussion and analysis included or incorporated by reference in this
Prospectus are presented in euro except as otherwise specified.
Gross margin, operating result, R&D ratio, capex as a percentage of sales revenue, capex, net cash flow
and net liquidity in the Automotive Division and operating return on sales are not recognized measures
under IFRS ("Non-GAAP measures") and should, for this reason, not be considered as an alternative to
the applicable IFRS measures. These Non-GAAP measures may not be comparable to similarly titled
measures as presented by other companies due to differences in the way of calculation.
MiFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY
TARGET MARKET
Solely for the purposes of each manufacturer's product approval process, the target market assessment in
respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible
counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID
II"); and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are
appropriate. The targeted investors are expected to have (1) at least advanced knowledge and/or experience
with financial products, (2) in case of the Notes the ability to bear losses resulting from interest rate changes
and no capital loss bearing capacity if held to maturity, (3) a low risk profile, (4) a return profile
preservation, growth and/or income as investment objective, and (5) a long term investment horizon.
Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into
consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is
responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or
refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPs REGULATION / PROHIBITION OF SALES TO EEA AND UK RETAIL INVESTORS
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the European Economic Area ("EEA") or in the
United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive
(EU) 2016/97 ("Insurance Distribution Directive"), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information
document required by Regulation (EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling
the Notes or otherwise making them available to retail investors in the EEA or in the United Kingdom has
been prepared and therefore offering or selling the Notes or otherwise making them available to any retail
investor in the EEA or in the United Kingdom may be unlawful under the PRIIPS Regulation.
BENCHMARK REGULATION
Interest amounts payable under the Notes may be calculated by reference to the Euro Interbank Offered
Rate ("EURIBOR"), which is currently provided by European Money Markets Institute ("EMMI"). As at
the date of this Prospectus, EMMI appears on the register of administrators and benchmarks established
and maintained by the European Securities and Markets Authority ("ESMA") pursuant to Article 36 of the
Benchmarks Regulation.
ROUNDING
Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures
shown for the same category presented in different tables may vary slightly and figures shown as totals in
certain tables may not be an arithmetic aggregation of the figures that precede them.
STABILIZATION
In connection with the issue of the Notes, BofA Securities Europe SA (or persons acting on its behalf)
may over-allot notes or effect transactions with a view to supporting the price of the Notes at a level
higher than that which might otherwise prevail. However, stabilization may not necessarily occur.
Any stabilization action may begin at any time after the adequate public disclosure of the terms of
the offer of the Notes and, if begun, may cease at any time, but it must end no later than the earlier
of 30 calendar days after the date of the receipt of the proceeds of the issue by the Issuer and 60

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calendar days after the date of the allotment of the Notes. Such stabilizing shall be in compliance with
all laws, directives, regulations and rules of any relevant jurisdiction.

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TABLE OF CONTENTS

Page
1.
RISK FACTORS ............................................................................................................................ 1
2.
GENERAL INFORMATION ....................................................................................................... 46
3.
USE OF PROCEEDS ................................................................................................................... 48
4.
DESCRIPTION OF THE ISSUER ............................................................................................... 49
5.
DESCRIPTION OF THE GUARANTOR .................................................................................... 53
6.
TERMS AND CONDITIONS OF THE NC5 NOTES ................................................................. 88
7.
TERMS AND CONDITIONS OF THE NC9 NOTES ............................................................... 126
8.
GUARANTEE OF THE NC5 NOTES ....................................................................................... 164
9.
GUARANTEE OF THE NC9 NOTES ....................................................................................... 171
10.
IMPACT OF VARIOUS TAXATION REGIMES ..................................................................... 178
11.
SUBSCRIPTION, SALE AND OFFER OF THE NOTES ......................................................... 187
12.
SELLING RESTRICTIONS ....................................................................................................... 188
13.
INFORMATION INCORPORATED BY REFERENCE ........................................................... 190


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1.
RISK FACTORS
Prospective investors should carefully review the following risk factors in conjunction with the other
information contained in this Prospectus before making an investment in the Notes. If these risks
materialize, individually or together with other circumstances, they may have a material adverse effect on
Volkswagen's business, results of operations and financial condition. The Issuer and the Guarantor believe
that the factors described below represent the principal risks inherent in investing in the Notes, but the
Issuer and the Guarantor may be unable to fulfill their respective obligations under the Notes and the
Guarantee for reasons other than those described below. Additional risks not currently known to the Issuer
or the Guarantor or that they currently believe are immaterial may also adversely affect Volkswagen's
business, results of operations and financial condition. Should any of these risks materialize, the trading
price of the Notes could decline, the Issuer and the Guarantor may not be able to fulfill their respective
obligations under the Notes and the Guarantee, and investors could lose all or a part of their investment.
Each prospective purchaser of Notes must determine, based on its own independent review and such
professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes is
fully consistent with its financial needs, objectives and condition, complies and is fully consistent with all
investment policies, guidelines and restrictions applicable to it and is a fit, proper and suitable investment
for it, notwithstanding the clear and substantial risks inherent in investing in or holding the Notes. A
prospective purchaser may not rely on the Issuer, the Guarantor, the Managers or any of their respective
affiliates in connection with its determination as to the legality of its acquisition of the Notes or as to the
other matters referred to above.
The following risk factors are organized in categories depending on their respective nature. In each
category the most material risk factors, based on the probability of their occurrence and the expected
magnitude of their negative impact, are mentioned first.
Risk Factors regarding Volkswagen International Finance N.V.
1.1
Finance Subsidiary
The Issuer is an indirect wholly owned subsidiary of Volkswagen AG. All Notes to be issued by the Issuer
are unconditionally and irrevocably guaranteed by Volkswagen AG in respect of principal and interest
payments. Accordingly, the ability of the Issuer to fulfil its obligations under the Notes is affected,
substantially, by the same risks as those that affect the business and operations of Volkswagen AG and/or
its consolidated subsidiaries. Therefore, references in this section to risk factors affecting Volkswagen AG
and/or its consolidated subsidiaries shall be considered risk factors affecting the Issuer (if applicable).
Volkswagen AG is subject to various risks resulting from changing economic, political, social, industry,
business and financial conditions. The principal risks which could affect Volkswagen AG's business,
financial condition, profitability, cash flows, results of operations and future business results are described
below. In addition, risks that are not yet known or assessed as not material can influence profitability, cash
flows and financial position.
Risk Factors regarding Volkswagen Aktiengesellschaft and Volkswagen Group
1.2
Coronavirus impact
1.2.1
The recent outbreak of SARS-CoV-2 has had a material adverse effect on Volkswagen's
business, affecting sales, production and supply chains, and employees. Further, the spread of
the SARS-CoV-2 outbreak has caused and may continue to cause severe disruptions in the
European and global economy and financial markets and could potentially create widespread
business continuity issues.
In December 2019, a novel strain of coronavirus ("SARS-CoV-2") was reported to have surfaced in Wuhan,
China. SARS-CoV-2 has since spread globally, including Volkswagen's primary markets and the location
of its principal operations, Germany and Europe as a whole and the United States. On March 11, 2020 the
World Health Organization declared SARS-CoV-2 a pandemic. The scale and duration of the SARS-CoV-
2 pandemic has severely impacted global financial and commodity markets and regional and global
economies, pushing many into recessions. Further extended duration of SARS-CoV-2 or another pandemic
could further negatively impact financial and commodity markets and regional and global economies.

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The global impact of the outbreak continues to evolve rapidly and, as cases of the virus continue to be
identified, many countries, including China, the member states of the European Union and the United
States, have reacted by instituting quarantines and restrictions on travel. Such actions have caused a material
deterioration of the global economy and the financial markets, with serious negative consequences for both
advanced economies and emerging markets, including all of Volkswagen's core markets, disrupting global
supply chains, severely decreasing consumer demand and spending, and adversely impacting a number of
industries, including the automobile industry.
The effects of the SARS-CoV-2 outbreak have had and may continue to have a material adverse effect on
Volkswagen's business and results of operations, and, depending on the duration of the outbreak, national
responses, the resulting economic downturn, and the shape of any potential recovery could adversely impact
Volkswagen's ability to successfully operate in the future due to, among other factors:
· depressed consumer demand, which has led to continued significant declines in vehicle sales in all
of Volkswagen's primary markets, adversely impacting Volkswagen's sales to retail and corporate
customers, which may be compounded by cancellations of lease and sales contracts due to the
economic downturn and import restrictions or other such measures intended to mitigate the
economic effects of the SARS-CoV-2 pandemic on national economies;
· dealership closures and quarantine or other measures aimed at preventing the spread of the virus,
which may materially affect Volkswagen's ability to sell its products and services through its
customary channels; new sales channels may need to be implemented, which may not prove
successful;
· a further slowdown or continued suspension in production at Volkswagen's facilities worldwide,
including joint ventures in China or at Volkswagen's plants in Germany, or the slowdown or
suspension of production at other Volkswagen facilities or further such measures as may be
necessary in the future;
· adverse impacts on Volkswagen's ability to operate in affected areas, or delays or disruptions in
the supply chain of automotive parts, components, commodities and other materials that are
needed for plants and factories to operate effectively and allow Volkswagen to meet targets and
complete orders in a timely manner, or impact Volkswagen's ability to comply with regulatory
obligations (e.g., homologation, licenses or approvals) leading to reputational harm and regulatory
issues, fines or sales stops;
· the current material deterioration of the global economy and significant drop in consumer demand
may lead the Financial Services Division to conclude fewer leasing and financing agreements and
could additionally cause a significant decrease in residual values for leased vehicles or vehicles
financed with a balloon rate and return option. An increase in residual value risk could cause
Volkswagen to increase its existing loss provisioning for residual value risks, while fewer leasing
and financing contracts could have a significant negative impact on the earnings and financial
position of the Financial Services Division and thus also on the Volkswagen Group;
· difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption
and instability in the global financial markets or deteriorations in credit and financing conditions,
which may affect Volkswagen's ability to access capital necessary to fund business operations,
meet financial obligations or replace or renew maturing liabilities on a timely basis, and may
adversely affect the valuation of financial assets and liabilities, any of which could affect
Volkswagen's liquidity, ability to meet capital expenditure requirements or have a material adverse
effect on Volkswagen's business, financial condition, results of operations and cash flows;
· the instability of the global financial markets and availability of internal and/or external resources
may delay or disrupt some of Volkswagen's cooperation with joint ventures and its acquisition and
disposal activities with external partners;
· a decline in the continued service and availability of skilled workforce and personnel, including
executive officers and other leaders that are part of Volkswagen's management team and
Volkswagen's ability to recruit, attract and retain skilled personnel. To the extent Volkswagen's
workforce, personnel and management are impacted in significant numbers by the outbreak of
disease and are not available to conduct work, this could lead to delays in the research and

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development of vehicles and components and may further negatively impact Volkswagen's
business and operating results;
· disruptions, delays or other impairments to Volkswagen's internal business processes, in particular
due to working from home schemes being implemented at Volkswagen and potential increased
risks in terms of IT exposure, data security and increased risk of cyberattacks;
· supply chain disruptions, which have affected and may continue to affect Volkswagen's alternative
drivetrain technology research activities, which may delay the scheduled rollout of products based
on such new technologies and may impede Volkswagen's ability to develop and test new
technologies needed to comply with intensifying environmental rules (e.g., CO2 targets); and
· continued deterioration of the economy in Volkswagen's core markets and other knock-on effects
from the SARS-CoV-2 pandemic may frustrate the attainment of Volkswagen's strategic goals,
which could have a material adverse effect on Volkswagen's reputation, general business activities,
net assets, financial position and results of operations.
In March 2020, Germany enacted emergency legislation to mitigate the negative economic effects of the
SARS-CoV-2 pandemic. Among other measures, section 240 of the introductory law to the German civil
law code (Einführungsgesetz zum Bürgerlichen Gesetzbuch) was amended to allow lessees that qualify as
consumers or micro-sized enterprises or borrowers which qualify as consumers under certain circumstances
to defer payments under lease or financing contracts, as relevant, until June 30, 2020 (or such later date as
extended by the German government). There is a risk that Volkswagen lessees or borrowers may delay or
seek to delay payments on existing leases or financing agreements under the emergency legislation. This
could impact among others cash flows and liquidity of Volkswagen. The introduction of similar legislation,
and/or amendments to existing legislation, intended to mitigate the SARS-CoV-2 pandemic and its adverse
economic consequences can be expected in the markets in which Volkswagen operates. Such legislative
measures may have a negative effect on Volkswagen's business, financial condition and results of
operations. Even if the impact on Volkswagen of the SARS-CoV-2 pandemic is less severe than expected,
future epidemics or pandemics could potentially cause further significant damage to the global economy
and to Volkswagen's business.
The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse
impact of SARS-CoV-2. Nevertheless, SARS-CoV-2 presents material uncertainty and risk and has had
and could continue to have material adverse effects on Volkswagen's revenues, net assets, cash flows,
financial condition and results of operations.
1.3
Macroeconomic, sector specific, markets and sales risks
1.3.1
Demand for Volkswagen's products and services depends upon the overall economic situation;
restrictions on trade and increasingly protectionist tendencies can result in a negative trend in
markets and impact Volkswagen's unit sales.
The sales volume of Volkswagen's products and services depends upon the general global economic
situation. Economic growth and developments in advanced economies and emerging markets have been
endangered by volatility in the financial and commodity markets, restrictions on trade and increasingly
protectionist tendencies and structural deficits in recent years. In particular, high levels of public and private
debt, movements in major currencies, volatile commodity prices as well as political and economic
uncertainty have in the past, and may in the future have a negative impact on consumption, damaging the
macroeconomic environment.
Particular risks to the economic environment, international trade and demand for Volkswagen's products
may arise from rising protectionist sentiment in Volkswagen's key markets and the introduction of further
tariff and non-tariff barriers or similar measures due to increasing protectionist tendencies. For example,
the United Kingdom's decision to leave the European Union ("Brexit"), trade tensions between the United
States and China, or a reorientation of the United States economic policy (any introduction of additional
regional or international trade barriers, including customs duties; changes in taxation which have similar
effects; or withdrawal from or renegotiation of multilateral trade agreements, such as the United States-
Mexico-Canada Agreement (USMCA), previously known as the North American Free Trade Agreement
(NAFTA)), could adversely impact Volkswagen's business and results of operations. The U.S.
administration is also evaluating the imposition of a 25% tariff on cars imported from Europe. In February

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2019, the U.S. Commerce Department declared European cars a threat to US national security. Although
the U.S. administration delayed a decision on whether to impose tariffs on foreign vehicles, such tariffs
could still be imposed, adversely affecting Volkswagen's sales to the United States. Any retaliatory
measures by regional or global trading partners could further slow down global economic growth and have
an adverse impact on Volkswagen's business activities, net assets, financial position and results of
operations.
Furthermore, escalation of global or regional conflicts, armed confrontations, terrorist activities,
cyberattacks, natural catastrophes or the spread of infectious diseases (such as the current spread of SARS-
CoV-2) may lead to prompt unexpected, short-term responses from the markets and declines in demand for
Volkswagen's products and services. Stagnating economic growth or declines or economic disruptions in
countries and regions that are major economic centers or are relevant to the global supply chain, in particular
US and China, have an immediate effect on the global economy and thus pose a key risk for Volkswagen's
businesses.
Recently, the effects of the SARS-CoV-2 pandemic have resulted in a material deterioration of the global
economy and financial markets, with serious negative consequences for both advanced economies and
emerging markets, affecting all of Volkswagen's core markets. Most of Volkswagen's key markets are
already in, or are expected to soon be in economic recession. The effects of the SARS-CoV-2 pandemic
may exacerbate the risks arising from volatility in the financial and commodity markets and restrictions on
trade and may increase protectionist tendencies and structural deficits. The SARS-CoV-2 pandemic's
impact on the global economy has had a marked adverse effect on consumption and increases the likelihood
that consumption could further decline in the future. Volkswagen believes that these developments have
had, and could continue to have adverse effects on its business, financial condition and results of operation.
See also "1.2.1 The recent outbreak of SARS-CoV-2 has had a material adverse effect on Volkswagen's
business, affecting sales, production and supply chains, and employees. Further, the spread of the SARS-
CoV-2 outbreak has caused and may continue to cause severe disruptions in the European and global
economy and financial markets and could potentially create widespread business continuity issues."
1.3.2
The larger share of Western Europe, particularly Germany, and of China in Volkswagen's
sales exposes Volkswagen to these regions' overall economic development and competitive
pressures. The material deterioration of economic conditions and financial markets in these
regions caused by spread of SARS-CoV-2 have resulted and may continue to result in a marked
decline in consumer demand and investment activity and has significantly adversely affected,
and may continue to affect Volkswagen's business.
In 2019, Volkswagen delivered 32.1% of its passenger cars to customers in Western Europe. Also, in 2019,
11.7% of Volkswagen's passenger cars were delivered to customers in Germany. In the same year,
Volkswagen delivered 41.3% of its passenger cars to customers in China. A sustained decrease in demand
for Volkswagen's products and services in Western Europe, especially in Germany, or in China would have
a material adverse effect on Volkswagen's general business activities, net assets, financial position and
results of operations. This also applies to the commercial vehicle market, in which demand is particularly
dependent on economic developments. Any signs of economic uncertainty in Europe, including a slowdown
in economic growth, recession, large-scale government austerity measures or tax increases, could lead to
significant long-term economic weakness.
In addition, Brexit has had consequences for macroeconomic growth and outlook in the United Kingdom
and Europe, affected exchange rates and negatively impacted demand for Volkswagen's products.
Depending on the future relationship between the UK and the EU, economic conditions in the United
Kingdom, the European Union and global markets, including currency markets, may be adversely affected
by reduced growth and heightened volatility. If the United Kingdom and the European Union fail to reach
an agreement on a future trade relationship, it may result in increased trade barriers between the European
Union and the United Kingdom. Any such trade barriers could have a negative impact on volumes and costs
both for Volkswagen's vehicles and components produced in the European Union for sale in the United
Kingdom, and vice versa. A sustained economic downturn in the United Kingdom as a result of Brexit
would furthermore adversely affect Volkswagen's sales in one of its largest individual markets in Western
Europe. A decline in consumer demand or in product prices in Western Europe would have a material
adverse effect on Volkswagen's business, financial position and results of operations.
A slowdown of the Chinese economy, partly as a result of the trade dispute between China and the US, but
mainly due to the rapid spread of SARS-CoV-2 pandemic, has in recent months led to a severe decline in

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