Volkswagen / on the scrappage bonus

August 2009

Mr Eichhorn, the national environmental premium – popularly known as the scrappage bonus – is on everybody’s lips. What do you think of the scheme? For instance, how do you think it affects the German economy and the environment?

The national scrappage bonus has had a direct and very positive effect, both economically and environmentally. In association with the new provisions on motor vehicle tax, this bonus has given our customers planning security and increased the attractiveness of buying a car. The demand triggered by the scheme has made a marked contribution to safeguarding the German automotive industry in difficult economic times. From an ecological viewpoint as well, the scheme is a success: purchases of new low-emission cars to replace older cars being scrapped has ensured a faster turnaround of the stock of cars on the road. In this way, replacing older cars for newer ones has made a significant contribution to protecting the environment and increasing road safety.

In concrete terms, what effect has the scheme had on your company?

With the introduction of the scrappage bonus, Volkswagen experienced a spontaneous marked increase in demand and has benefited to a considerable degree from the environmental premium introduced in Germany. Not only have Volkswagen sold more than 250,000 passenger vehicles in Germany with the aid of the scrappage scheme, but as a result of the strong rise in demand, the company has been able to secure 5,800 jobs in recent months. The evident success of the scrappage bonus in Germany has motivated numerous other countries to introduce similar measures.

In your experience, what is the profile of a person likely to take advantage of the scrappage scheme? What type of people make use of it?

Well, they are customers running cars which are more than ten years old. For the most part, this group of individuals would not have been incentivizable in terms of buying new or one-year-old cars without the benefit of the bonus. We believe that the effect of bringing forward purchases, which has been exhaustively debated in the media, will remain very limited.

Do you believe that the scrappage scheme has made consumers even more price sensitive and that they are consequently anticipating more breaks when they buy cars in the next few years?

Competitive pressure in Germany is traditionally high, because of the size of the market and the many domestic manufacturers. However, the Volkswagen brand can demonstrate that it has a young and attractive product portfolio, a comprehensive and extremely competitive offering in terms of financial services and, not least, particularly stable residual values, putting us in a position to offer our customers a good price/performance ratio.

How do you see the future of the Volkswagen brand developing in a year or two?

Volkswagen has been the undisputed market leader in Germany for many years. We can build on a strong brand and the most extensive customer portfolio of any manufacturer. In the coming years, we shall be embarking on the targeted expansion of our product range, which is already extensive at the moment, by introducing several new drive concepts with emotional appeal. It is also conceivable that the importance of key issues like “environment

Thank you very much for the interview!

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