Christine Ritz Hans Dieter Pötsch - Chief Financial Officer, Head of Controlling & Accounting and Member of Management Board Christian Klingler - Member of Management Board and Member of The Group Board of Management for Sales & Marketing

Michael John Tyndall - Barclays Capital, Research Division Horst Schneider - HSBC, Research Division Stephen Reitman - Societe Generale Cross Asset Research Daniel Schwarz - Commerzbank AG, Research Division Jochen Gehrke - Deutsche Bank AG, Research Division Georges Dieng - Natixis Bleichroeder LLC, Research Division Charles Winston - Redburn Partners LLP, Research Division Stuart Pearson - Morgan Stanley, Research Division Fraser Hill - BofA Merrill Lynch, Research Division Michael Punzet - DZ Bank AG, Research Division Erich Hauser - Crédit Suisse AG, Research Division Jose M. Asumendi - JP Morgan Chase & Co, Research Division Frank Biller - Landesbank Baden-Wurttemberg, Research Division Philippe Houchois - UBS Investment Bank, Research Division

Good day, ladies and gentlemen, and welcome to the Volkswagen AG Publication of Results for the First Quarter 2013 Conference Call. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Christine Ritz, Head of Group Investor Relations for Volkswagen AG. Please go ahead, madam.

Ladies and gentlemen, welcome to Volkswagen's conference call on the results for the period January to March 2013 based on the ad hoc we released last week and the interim report we published this morning. Joining me on today's conference call are Hans Dieter Pötsch, member of the board of management, Volkswagen AG, responsible for finance and controlling; and a member of the board of management, Volkswagen AG, responsible for group sales and marketing, Christian Klingler. The webcast can be viewed via our website at volkswagenag.com/ir, where you will you also find the charts available to download. After the presentation, we will take questions first from analysts and then from journalists. Let me now pass you over to Mr. Pötsch. Hans Dieter Pötsch: Yes, thank you, and a warm welcome from my side to those of you joining this call today. Our results announced last week demonstrate the strength of the Volkswagen Group. In continued difficult market conditions, we have reported a solid operating performance in line with our expectations. Driven by China in the first 3 months of 2013, Volkswagen Group delivered 2.3 million vehicles, up close to 5%, to customers across our car and truck division. Sales revenue at EUR 46.6 billion came in at the level of Q1 2012, reflecting the weakness of European markets and that our Chinese performance is primarily captured through our joint ventures. Operating profit came in at EUR 2.3 billion. Profit before tax at EUR 2.7 billion for the first 3 months includes higher earnings from the equity-accounted investments in China. In Q1 2012, profit before tax was also lifted by remeasurement gains of Porsche options. At EUR 10.6 billion, automotive net liquidity remains at a solid level after 3 months as we continue to invest in our future. Let me now pass you over to Mr. Klingler to take you through our sales performance.

Ladies and gentlemen, allow me to also add a warm welcome to the conference call from my side. This chart shows quarterly growth in 2012, as well as first quarter of 2013, of the world car market and group deliveries to customers in comparison to the same period in the previous year. As you can see growth in the global car market continued to lose momentum, growing to just over 2% in the first quarter of 2013. However, the regions didn't advance at the same pace. While markets in Asia and North America expanded further, the economic crises in Europe severely impacted the car market. The critical debt situation in Cyprus and the prolonged search for a new government in Italy have again demonstrated that the eurozone debt crisis is anything but over. If you look at our deliveries to customers, the Volkswagen Group again outperformed the overall car market in the first quarter of 2013. In key markets such as China, the United States and Mexico, our deliveries to customers have shown double-digit growth once more. Now looking at the car market performance in direct comparison to the Volkswagen Group in the first quarter of 2013 on a regional basis. As you can see, the Volkswagen Group has outperformed the total car market in nearly every region. Despite difficult market conditions in Europe and South America, we again increased our global market share. The western and eastern European markets dropped by 9.8% and 4.4% compared to the first quarter of 2012, while the deliveries of the Volkswagen Group decreased by 6.3% and 3.6%, respectively, and thus, outperformed the market. As mentioned already, major markets in these regions suffered significant reductions due to the weak economic situation. The market losses in Germany, Italy, France and Spain were also above 10%. While markets such as the U.K. still reported slight growth, an elevated level of market risk exists across the whole region. Also, South America, weak economic growth and the expiration of tax breaks led to a drop in industry in the first quarter of 2013. Competition has intensified significantly in Brazil. However, we believe we are well prepared to tackle the competition in this market now and the future. On the other hand, the North American car market continued to expand. The development is mainly driven by pent-up replacement demand in the United States. The Volkswagen Group deliveries grew faster than the overall market here as well. The continuing expansion of the Asia Pacific region is mainly boosted by a strong acceleration in Chinese car sales, but also supported by a further growing ASEAN region. A muted consumption climate and a high base of comparison to the first quarter of last year, however, led to contraction of the Indian car market. Group deliveries in the Asia Pacific region outpaced the total market development by a significant margin. Nevertheless, the strong market headwinds continue. It is, therefore, important for us to expand our global presence, a strength which is now increasingly paying off. This slide primarily shows group performance on an individual brand level for passenger cars. In the first quarter of 2013, nearly all of our volume brands achieved an increase in terms of deliveries, and for the group, total deliveries to customers exceeded last year's level by 4.8%. Volkswagen Passenger Car deliveries were up by 5.2% or more than 70,000 units, driven by strong demand in China, the U.S. and Mexico. Audi deliveries rose by 6.8% compared to the same period of last year or over 23,000 units due to success in Germany, China, the U.S. and U.K. Particularly, North America is developing, next to Europe and China, more and more as the third string [ph] strong dealer of the brand. SKODA deliveries decreased by 9.2%. The 220,000 units suffering from weak home markets in central and eastern Europe and due to the changeover to the new Octavia. SEAT deliveries rose by 8.7% compared to last year, fueled by success in Germany, the U.K. and its home market, Spain. Porsche delivered more than 37,000 units, and sales growth is more dynamic than ever before. Bentley has managed to significantly expand deliveries, with strong demand in the U.S. and its home market, the U.K. Now we turn to the situation of the individual commercial vehicle brands of Volkswagen Group. The global market of light commercial vehicles grew slightly by 3%. The deliveries of Volkswagen Commercial Vehicles declined by 5% and were mainly affected by the financial crisis in Europe, the home market for Volkswagen Commercial Vehicles. Sales in Russia stagnated due to the decreased economic growth. However, Volkswagen Commercial Vehicles was able to increase sales on the South American market due to favorable financing and support measures. The global truck market declined by 16%. Worsening economic conditions, in particular in Europe, had a negative impact on truck demand. In western Europe, the truck market shrunk by 18%, while in central and eastern Europe, the market decreased by 2%. Brazil, the major market in South America, contracted by 8%. As the brands are mainly focused on Europe and South America, Scania and MAN clearly felt the impact of the declining markets. However, in the first quarter of 2013, Scania achieved an increase of its truck and bus deliveries by 4.3%, whereas MAN deliveries went down by 12.9%. Especially in Brazil, Scania outperformed the heavy duty subsequent development during the first quarter of 2013. In Europe, restricted credits for truck financing affected Scania truck sales negatively. MAN suffered a decline in deliveries by 12.9% largely related to Russia, where the scrappage fee for imported trucks was the main reason for the slowdown. In Brazil, the high comparative sales of MAN trucks in the first quarter of 2012 led to a significant sales decline. Underlying sales in power engineering, where we are represented by MAN, declined by 10% and reached EUR 0.9 billion. Let us now take a look at a few highlights on some of our new models, which will support our sales performance in the coming months. The new Volkswagen Santana is, with nearly 30 years of success and almost 4 million cars sold, the Chinese success story. This car stands for contemporary and smart design and represents affordable, reliable and affordable driving mobility. The new Santana was introduced in the Chinese market in the first quarter of 2013. The new Audi A3 Sportback, which launched in February this year, stands for innovative design and sophisticated technology. The 5-door model is more dynamic and features increased functionality, as well as more emotional appeal. The infotainment and driver assistance system available in the new A3 Sportback set new standards in the premium compact segment. The new SKODA Octavia is the heart of the SKODA brand. This car offers middle-class quality at a compact car price, with many simply clever solutions. The limousine of the new SKODA Octavia was shown at the Geneva Motor Show in March and has already been launched on various markets. The launch of the SKODA Octavia Combi will start next month. The new Porsche Cayman has a mid-engine coupe, combines unmatched agility, pure sportiness and very emotional design. The significant increase in performance comes along with the substantial reduction of fuel consumption. The Porsche Cayman was shown at the Los Angeles Auto Show in November and introduced in the markets in March.

Thank you, Mr. Klingler. Now I would like to ask Mr. Pötsch to provide some more details on the key elements of our financial performance. Hans Dieter Pötsch: Yes, of course. Let's, first of all, get started on a high level. For the period January to March 2013, the Automotive Division reported revenue of EUR 41.1 billion, while operating profit came in at EUR 1.9 billion, both below the prior year figures. Clear influences here were both mix, as well as sales volume, which declined by 3.8%, excluding sales from our Chinese joint ventures, where the related financial performance is not included within the Volkswagen Group sales revenue or the operating result. Moving on to the financial result. The proportion relating to the equity-consolidated companies declined slightly, reflecting that Porsche AG is now fully consolidated. This masks an improved performance in our Chinese joint ventures, where the proportionate operating result increased 36% to EUR 1.2 billion. The full consolidation of Porsche is also behind the lower other financial result, which was boosted in Q1 last year, with over EUR 600 million was remeasurement gains on Porsche related put and call option. Turning to the group operating result performance in more detail. Volume, mix, price contributed a negative EUR 0.9 billion to our performance as the lowest sales volumes outside of China, in particular, impacted our earnings. This figure also includes a contingency reserve in the low-triple digit million range, arising from the voluntary recall action recently initiated in China in relation to a 7-speed DSG gearbox. Exchange rates after hedging were slightly positive, and we continue to bear down on product costs, recording a positive EUR 0.3 billion. As our production footprint continues to grow as we continue to invest in our future so, too, in particular, do our factory-specific fixed costs, as well as depreciation, in total, up EUR 0.2 billion on Q1 2012. Although PPA charges relating to Scania and MAN have fallen, the weak market in Europe held back earnings in our Commercial Vehicles, Power Engineering division. In addition, MAN booked contingency reserve relating to a large order to construct turnkey diesel power plant. In total, the division's earnings fell by a net EUR 0.3 billion. The Financial Service division, including the financial services activities of MAN, Porsche Holding Salzburg and of course, Scania, lifted operating earnings by a little over EUR 70 million. In total, operating profit came in at EUR 2.3 billion. As we now turn to the financial performance of our main brands, the difference in the resilience of the markets for premium in comparison to the markets for volume costs comes clearly into focus. The Volkswagen Passenger Cars brand reported an operating result of close to EUR 600 million in Q1, reflecting especially the weakness of the European volume car market, as well as a tough comparison to a good start in 2012. Volume and mix, as well as limited availability of the new Golf family held earnings back. Results at SKODA and Fiat also suffered from the European market, as well as important product changeovers. At EUR 1.3 billion, the result in Audi was just below Q1 2012. Audi's margin held up well at slightly above 11%. At EUR 573 million with a 17.5% margin, Porsche made a strong contribution to the group's result. Bentley recorded steady progress. And as I commented already, MAN and Scania, as well as Volkswagen Commercial Vehicles, which from January 1 this year is now included under the Commercial Vehicles, Power Engineering section, reported lower earnings, again predominantly driven by weaker markets. Scania's earnings held up better, supported by the service business, while MAN's result was impacted by a project-related contingency reserve. As we have mentioned before, the increase in the other line reflects in part the full consolidation of Porsche, which has led to a higher elimination of intercompany profit. This was partially offset by lower PPA charges. Turning now to cash flow in the Automotive Division. Operating cash flow increased from EUR 2.9 billion to EUR 3.5 billion as working capital improved, more than offsetting the effect from lower underlying earnings. Investing cash flow increased from EUR 2.5 billion to EUR 3.9 billion, while the CapEx ratio for the first 3 months was at 4.1%, at the prior year level. A large share of the reported investments in the Automotive Division in Q1 reflect transfer of our 50% interest in LeasePlan from our Financial Services division to the Automotive Division to strengthen the capital position of Volkswagen Financial Services AG for ongoing future growth. Excluding the LeasePlan effect, net cash flow was over EUR 1 billion positive. Net liquidity at the end of March remained at EUR 10.6 billion as at the start of 2012. Excluding the LeasePlan transaction, this would have been close to EUR 12 billion. And so to conclude my presentation today, let me now turn to our outlook statement, which is detailed in full in our interim report. We anticipate that in 2013, growth in the global market for passenger cars is likely to be weaker than in 2012 and that the overall volume in the market for light commercial vehicles, trucks and buses that are relevant for the Volkswagen Group will remain at the same level as in 2012. Demand for mobility-related financial services is likely to rise further. We expect that the Volkswagen Group will outperform the market as a whole in a challenging environment and that deliveries to customers will increase year-on-year. We expect Volkswagen Group's 2013 sales revenue to exceed the prior year figure. Given the ongoing uncertainty in the economic environment, the group's goal for operating profit is to match the prior year level in 2013.

Mr. Pötsch, thank you very much. We will now take questions from analysts. [Operator Instructions]

[Operator Instructions] Our first question comes from Michael Tyndall of Barclays. Michael John Tyndall - Barclays Capital, Research Division: It's Michael Tyndall from Barclays. Two questions, if I may. The first one, pretty straightforward. Just looking at the EBIT walk-down. I'm wondering if you could tell me whereabout Porsche landed in the EBIT walk-down, and my suspicion is it's in passenger cars, which then seems like the headwind on volume, price and mix was a lot higher than I was expecting. So I wonder if you could just talk a little bit about mix. I know that you have previously said that Germany is -- a weak Germany is a big problem for you. I just wondered if you can give us some color around that and what the German order book is looking like today versus where it was at the start of the year. And then, the second question, if I may, just around launch cost. With the rollout of MQB, if I understand it correctly, it feels like you've accelerated quite a lot of your launches to capitalize on that investment. So I wondered to what degree this year is going to be burdened by excess launch costs and maybe if you could give us some color around that in terms of perhaps the scale of launch costs this year versus a normal year.

Okay, thank you very much, Mike. You have 2 questions for us. The first question refers to the EBIT walk-down and you would like to know where the Porsche results are landed or booked. And if we can then give some more information about the headwinds we have seen in the first quarter, especially with regard to mix in Germany, and if we can also highlight a little bit the current situation in terms of order book, especially in Germany. The second question refers to launch costs. You want -- and in connection with MQB, so if we can give more information. And what magnitude we expect launch costs this year, is that going to be exceptionally high for the rest of the year. Hans Dieter Pötsch: So to the first question, in terms of the EBIT bridge, this is just to confirm that Porsche is incorporated in the volume, mix, price column, or in other words, except Porsche the deviation would have been significantly larger. We're doing this just to allow a better comparison in the other categories, while -- then starting next year we'll, of course, move Porsche in as a fully consolidated company into the full comparison in all the various elements of the P&L. Now on the mix side, we clearly have a negative situation with regard to country mix and also another negative element on the product mix in terms of changes between the relevant segment. We'd like to leave this for further detailing up to Mr. Klinger later on. Maybe I can, first of all, answer the second question, which did refer to the launch cost situation. First of all, it is important to understand that, as we've always said in the past month, that we are still in the middle of the launch process on the Golf. If Golf is not only understood by just 1 car, but if we understand that there is a family of cars to be introduced, first of all, and secondly, that we have to bring the MQB to several manufacturing location. That means spending is still on the high side, and in a similar way, it also means that our launch costs remain on a comparatively high level. Now you've touched another important point, which is due to the framework conditions in the market, which Mr. Klingler is going to explain in a minute, the difficult circumstances and framework conditions in the market, it is obvious that we have gained an enormous chance here as we have a full pipeline of new products to be introduced shortly. And in that sense, it should be very clear that we do whatever we can to bring the new products as early as possible to the markets. Of course, we won't sacrifice to an extent on quality, that's a determining factor. But you're absolutely right, also including that the second element, launch costs run on a record high level. They would pass over a normal yield level by possibly times 4 in that area. And I leave it now to Mr. Klingler to talk little bit more about the market situation in terms of mix.

If you come to the question of mix, which is certainly an important one, maybe I'll start first with the market side. It is very clear that the European market has not had a very good phase in the first quarter 2013, and in evidence, you can compare that to 2012. So here, you have a decline, which is in terms of total volumes, sensible, and it was compensated essentially by higher volumes coming from other regions like in North America or in China. So here, you have, of course, a first good explanation for differentiation in terms of mix because, of course, the country mix shows as well strong and less strong financial results per country. On the other side, you have as well a mix in the cars itself, so we cannot say that we have a reduction of cost per car. In that sense, sales per car would be still in a good mix situation in terms of equipment. But due to, for example, the new small family, which was not totally in the market the last year in the first quarter. This year, we have here much higher volume in that segment. And on the other side, we see that, for example, in the B segment, the total market in Europe has contracted stronger than in others. So we also have us a second example a change in terms of mix concerning the cars itself. Your other question has been what is -- about the order book in Germany in general. We are okay, so we have no bad feelings about that. As you know, we are not going into the details concerning these numbers. So we see an order intake which is in the range of the expectations that we had.

Our next question comes from Horst Schneider of HSBC. Horst Schneider - HSBC, Research Division: Horst Schneider from HSBC. Some questions, if I may. First one relates to the CapEx-to-sales ratio. Especially when I look at property, plant and equipment CapEx, it seems to me quite low in the first quarter. I think for the full year, you guided originally for a ratio of above 6%. It was in Q1, only at 4.2%, according to my calculations. So is that above 6% ratio still intact in terms of guidance? Or do you see a chance that you may spend less than expected this year? Then the second question that I have relates to Asia Pacific. I see in the Q1 report that vehicle sales have been up around about 20% and revenues are down. And I ask myself, why that is the case. And then maybe as a last question, outlook for Q2. Normally, Q2 is a quite strong quarter for you. I want to ask if you see any chance that vehicle sales x China and Porsche will be up in Q2 or will they continue to be down as in Q1.

Okay. So Horst, 3 questions for us. We noticed it, and no problem. And the first question refers to the CapEx ratio and if we can give guidance for the full year because the first -- in the first quarter, we had quite a lower number, so if we can give you an update on guidance for the full year. The second question was referring to Asia Pacific, and you're wondering why vehicle sales are up and revenue down. If we can give there an explanation. And then a question which refers to the second quarter, if there is any chance that vehicle sales x China and x Porsche will be up. Hans Dieter Pötsch: Okay. So first of all, the first question dealing with the CapEx-to-sales ratio. Now here, I can repeat what I said many full times. We should never over-interpret a single quarter specifically if it is the first quarter. So I think with the development so far we are just walking the line which was expected, we should not forget that we are still in an investment-heavy cycle, as we always said in the past. And in spite of all the changes made to the investment plan on the basis of a more uncertain framework, the fundamental trends will stay intact, which means that we still are targeting on CapEx-to-sales ratio which will be in the category of 6% -- maybe 6-plus-something percent relative to sales for the full year. On the Asia Pacific side, the explanation is that you have probably compared sales volume including China, while looking at the revenue side, it incorporates only the revenues except the Chinese joint ventures. So the 2 figures are not really directly comparable, which makes it easy to find the development where the one side goes up and the other side goes down. And then on the second quarter, it's very clear that we have a good chance to beat the Q1 numbers in an apples-to-apples comparison. Horst Schneider - HSBC, Research Division: And on a year-on-year basis? Hans Dieter Pötsch: That's too early to say.

Our next question comes from Stephen Reitman of Societe Generale. Stephen Reitman - Societe Generale Cross Asset Research: A question, first of all, on the Golf 7. You've, first of all, said that you're satisfied or the orders are in line with what you were expecting. Can you comment specifically about the Golf 7, if you're still saying that the order intake is higher than the level you have been anticipating, which I think were the comments you were making earlier in the year? And secondly, on the United States, you've just now opened your engine plants in Silao, in Mexico. So what impact does that have in terms of the profitability of the North America region now that you're localizing more of the engine and gearbox production?

Okay, Stephen. Thank you for your 2 questions. First question refers to orders, to our order intake, if we can give there some more information, if the order intake is in line, specifically with regard to the new Golf, the Golf 7. And the second question refers to the profitability in North America, if our new engine plant, Silao, does have an impact on our profitability in the North American region.

So maybe let me allow to -- talk about the Golf 7. Of course, the market environment is not very positive. But in general, that is important to underline our expectations have been exceeded in terms of order intake, so we're very happy. We're now launching the new Golf GTI, so this is just in the next few weeks which will come. So the press tour has started about 10 days ago. And the people are not only happy, they are excited, and they think this is the best GTI ever which we have done. So we only can confirm what we have said that the Golf is performing better than we have thought, and we're very happy about its performance in the markets. Hans Dieter Pötsch: So on the second question, dealing with the new engine plant in Silao, which is going to supply engines predominantly for cars sold in the U.S., it is important that we look at 2 effects there. First of all, this is -- the engine built there is one of the very volume powertrains which we build in the Volkswagen Group. So it's certainly also an engine which is, by cost, extremely competitive. That's one side. The other side is it's certainly one of the most modern powertrains in the Volkswagen Group, which will make a big step with the cars, which then will incorporate this powertrain specifically also the U.S. Passat. There will be a significant step in terms of value for the customer by lower fuel consumption, better performance and a number of other elements which are provided by this engine. That's why it's going to contribute positively to really be competitive in the market.

Our next question comes from Daniel Schwarz of Commerzbank. Daniel Schwarz - Commerzbank AG, Research Division: My first question would be, after the EUR 2.3 billion EBIT in the first quarter, you need a bit more than EUR 3 billion in the remaining 3 quarters to reach your EBIT guidance. Besides the non-continuing provisions for double-clutch transmissions and for power engineering, what are the main improvements in the remaining 3 quarters? The second question would be on the sale of 50% in LeasePlan. Besides the impact on the cash flow statement, is there any impact on the divisional earnings in the first quarter? Or will there be an impact in the remaining quarters?

Okay, thank you very much, Daniel. You have 2 questions for us. The first question refers to our profit development for the remaining quarters, so what are the main drivers for an improvement for the rest of the year. And the second question is with regard to our LeasePlan transaction, you want to know if that has -- apart from the cash flow impact, if we have seen also other impacts on the revisions or earnings also. Hans Dieter Pötsch: So first of all, on the point how we can improve going forward. Now first of all, I think it is important to really position the performance of the first quarter correctly because one of the problems there is that -- talking about the operating result, is that we are comparing with an absolute record quarter when we talk about the first quarter of 2012. So that's where we had really maximum tailwind, and as we all know, that's quite different if we talk about the first quarter of 2013. In other words, more concretely speaking, there should be some volume improvement going forward, of course, also on the basis of the new product introduced, which will increasingly take share relative to the total sales volume, which in similar turn means that more favorable costs of the new products will also come into play there. Not surprisingly, at this point, we are heavily working also on the fixed cost side of the business, and on that basis, again, if the existing economical framework doesn't deteriorate further, we feel we have a good chance to meet the outlook, which is to reach the level of operating profit of 2012 in 2013. On the second question concerning LeasePlan, there should not be, on a group level, any effect. Of course it changes if you look at the segment reporting, Automotive, on the one hand, and Financial Services, on the other hand. But other than this, it's not going to change anything in terms of the group reporting.

Our next question comes from Jochen Gehrke of Deutsche Bank. Jochen Gehrke - Deutsche Bank AG, Research Division: Two quick ones. Mr. Klingler, could you just update us on how you feel about the inventory level, in particular in the European system, both your own, as well as the one at your dealers? And have you taken stock out throughout this quarter in that particular part of your regions? And secondly, for Mr. Pötsch, at least from my perspective, the main underperformance this quarter is clearly in MAN, an asset where you have now stepped up and you're looking for domination agreement. How should we think about the running of this business going forward post your fully integrating it with the domination agreement? Is Volkswagen looking for further more drastic changes in how this business is run, in particular, looking in the performance in light of your other truck piece, which is standing on the other side of the industry comparison?

Thank you very much, Jochen. So we have 2 questions. The first question refers to inventory level. If Mr. Klingler can give some more information about the situation at the end of the first quarter, but especially how about the situation in Europe also on the dealer side. And the second question refers to our truck business, especially to MAN and the performance of MAN. If we think they are further changes needed or how do we consider the performance going ahead, also against the background of the intended domination and profit/loss agreement.

So maybe I'll start with the inventory question. In general, we always try to have the best balance, let's say, the optimum balance compared to what we believe is the right level of stock and what is in the market. So we have been very strongly supervising the European market over the last 18 months. You've seen as well that since probably 18 months, we say it will come to a situation where the markets will get into more tensions, which, by the way, has unfortunately but evidently happened. So we are not surprised in terms of market, and we are not surprised in terms of stock. So if we come back to our question in terms of stock level, we are in a very good stock level situation, from both the level of the manufacturers, as well as the level of the dealers in general. There might be 1 or 2 slight issues, but they are really minor. So we have a very clear policy to keep the stock on the level where it needs to be as you want to keep on the satisfying pricing position. And this has happened, and this will continue to happen. Hans Dieter Pötsch: So on the second question concerning the performance of MAN, it's no doubt that MAN is experiencing quite difficult market, and there's also no doubt that a number of things need to be improved within the company. In this regard, the management team is heavily working on it, and we're also making good progress in terms of the synergy-creation process. It has been always very clear that some framework conditions need to be in place to explore the full amount of the synergies. One important step to be taken is the intended domination agreement. And this means very clearly that after the -- hopefully, the positive conclusion of the domination agreement, there will be another playing field available for the creation of synergies which definitely the 2 companies are going to explore. In this regard, we don't look at any drastic changes. As I said already, the management team is making a good job in working on several issues, and it's also clear that it's very necessary in the given circumstances to try to defend the position in a very difficult market. So that's the bottom line of what we're working on, and again, there will be more to be looked at after the conclusion of the domination agreement. Jochen Gehrke - Deutsche Bank AG, Research Division: Sorry, Mr. Klingler, if I just may come back and try again my luck. On the inventory situation or how things have developed, you're obviously giving us global deliveries, retail sales and production, but that obviously includes the Chinese business. Can you help us understand whether this roughly equal performance would amount to [ph] 60,000, 70,000 units more production than deliveries? On a global level, was that the same in Europe? Did you deliver less to your year dealers than what you sold in Europe? Just roughly understanding the dynamics here as I think at least your communication towards the end of last year indicated that you would take even more stock out of the system, in particular in the European system?

So as you try your luck, I try my luck as well. Yes, again, we have a very good stock level in Europe, and we have ratios which are very satisfying on both level, importer, NSEs [ph], manufacturers and/or dealers. This we have done. And had we taken further inventory out than we had last year? The answer is yes, on a small level because it was not needed too much in terms of comparison to last year, end of December. But we are in a very good shape in terms of inventory.

Our next question comes from George Dieng of Natixis. Georges Dieng - Natixis Bleichroeder LLC, Research Division: George Dieng, Natixis. Two questions. First of all, on your ability, let's say, to withstand the crisis, I mean, as evidenced by the results, VW is not immune to this crisis. And I was wondering whether you intend, as some of your competitors, to put in place maybe some more specific measures to protect your profitability, be it in terms of accelerating some cost-cutting actions beyond what you do on a business-as-usual basis or maybe also regarding your pricing strategy. This is the first question. The second has to do with the LeasePlan transfer to Automotive. My understanding is that the rationality is to improve the equity base of Financial Services. But I guess, the equity base is only increased by the, let's say, the gain on the book value. So to what extent did you really increase the equity base? And have you reached a satisfactory level of equity base or will you need to further strengthen it in the subsequent quarters?

Okay, George, so you have 2 questions for us. The first question refers to which specific measures we put in place to improve our performance during the year. I guess, it was also referring to the Volkswagen Passenger Car plan. And the second question refers to our LeasePlan transaction. If we can give you a specific number, what amount actually -- to which amount referring to the equity base of FS and what does that mean also for the remaining year, if we do plan other measurements in that direction. Hans Dieter Pötsch: So to the first question, as you rightly say, Volkswagen is not immune against the difficult market situation despite the fact, as we believe, we have -- we're working our way through that situation reasonably successfully. Would we introduce various programs on the cost side on the investment side? We simply speak we don't think that would be the appropriate approach to be taken because, quite clearly, as I said before, what is absolutely important in the circumstance is that you have a very convincing product portfolio which is able to work very competitively in the market. And that's what we have, and we're adding on a number of additional products in the next few months to come in a number of segments. And it certainly would be wrong to do anything which would threaten the as-early-as-possible market introduction of these products. That's why we work more the other way around, which is to support the introduction as much as possible, even if that would produce additional incremental cost. We've got a very disciplined management team in the company in all the various locations, who are able to read what's coming in as a message by the markets quite realistically, which means all the management have taken their own responsibility, which ends up in a lower-than-expected cost position in terms of both variable and fixed cost. And this is going to continue on for the next period. In a similar way, as Mr. Klingler many before times pointed out, we have, for all of our brands, besides other checkpoints, a very important position to be defended, which is the sustainable value of our product. And that's why, of course, we have also to react in one or the other way to movement of competition in the markets, but we clearly have probably most of the reasons to play this in a very conservative note. So to that regard, we continue in a very disciplined manner to execute the business, to try to introduce the new products as early as possible in the market because we think that's really what underpins our strong competitive position in the market. To the second question on LeasePlan, first of all, avoiding any misunderstanding, the transfer from Financial Services to the Automotive Division took place on the basis of book value, so there is no gain being realized. And on that basis, as I said before, it's been primarily a measure in the forefront of Basel III coming along to strengthen the equity base at Financial Services. On Financial Services, you might have seen this already in looking at the numbers of the quarterly report, we are performing very well. And we also do expect that for the remainder of the year, the development at the Financial Services worldwide will be very positive as the attractiveness of Financial Services seems to be very high, and we have a very efficient organization in place. And just to build the basis for this future growth potential, we need to take the respective measures, of course, to maintain the necessary equity position. As you also know, we are quite flexible. We have all the potential available to, if ever necessary, to reinforce the equity base of Financial Services and we deemed it to be the appropriate move to take this step. From today's point of view, there are no further steps intended. Georges Dieng - Natixis Bleichroeder LLC, Research Division: Okay. Can I just ask a follow-up on the first point, regarding the point you are making about the way of defending the value of the product? When you look at the evolution of your quarterly market share, obviously, something has changed in the past 2 quarters, and you've been losing momentum in some of your key markets. So I guess, you would rather raise or preserve prices rather than defend, at any cost, your market shares across the globe. Is that the way I should read your answer?

Okay, maybe I'll jump in just for this question. So in terms of market share development, we have and had declared targets to be better performing than the market growth, which we have done as well in the last quarter. But I think your intention is, if I got your point right, are we there to defend our market share for any cost. This is not the policy of Volkswagen. It was not the policy, and I don't think it will be. We are there to find the right balance between the market, the market conditions, as well as the volumes and the market shares. And we have a very stringent, it seems to me, very efficient methodology, as well as a very clear follow-up so that we try to be really extremely clear how we go forward. It's not only just the price of the new cars, this as well is a question of residual values, where we're very sensible because we do not want to have residual values in danger, and therefore, sometimes we make choices which are very clearly oriented to keep the price momentum or not to damage the residual values. So we can give you comfort about this that we keep on going on that direction.

Our next question comes from Charles Winston of Redburn Partners. Charles Winston - Redburn Partners LLP, Research Division: Two for me as well. Firstly, just looking at the Passenger Car business, if I strip out the Porsche results, it looks like the underlying revenues in Passenger Cars was down a good 10% or so. I was wondering if you could give us a bit of flavor to the split of that. I guess, FX is going to have an issue. Obviously, there's some impact from volume once you strip out China. But if you'd give us a flavor of how that breaks out that will be very useful. And then second question just if I could get some numbers, please. Could you confirm the size of the charge from MAN? Was it EUR 140 million? Can you confirm the size of the charge from DSG in China? Was that roughly EUR 200 million? And then also can you confirm the PPA charges that were taken in the period?

Okay. Thank you, Charles. You want to have -- so you have 2 questions for us. First one is if we can give some flavor actually in the Passenger Car business. When we exclude Porsche, what are the major drivers of the performance in the first quarter, if we can give you some more details. And the second question refers to, first of all, MAN and if we can give a specific number for the contingency reserve for MAN with regard to the diesel power plant project. And you want to know what is the exact amount of the contingency reserve for our new DSG recall in China. And if we can also give exact number for PPA in the first quarter. Hans Dieter Pötsch: So to the first question, yes, of course, if -- in terms of revenue development, if we exclude Porsche, then it's around a 10% decline of the other brands, comparing with the first quarter of the previous year. I think other than just talk about a lot of numbers, the key element there is that, over and above, the premium brands did perform more positively as compared to the volume brands, which is very much characteristic in the given circumstances in the market. We -- by the way, we do believe that this might continue on for quite a while. The other element, again, following the comments of Mr. Klingler, is mix, which does play an important role, and also to some extent, currency. On the MAN side, yes, it's been a contingency built in the magnitude of EUR 140 million. On China, I cannot confirm EUR 200 million. It's a low 3-digit number, which is built as a provision in the balance sheet. And in terms of PPA, what I can say, consistent to what we said last year, it is with a good amount below 2012. And we also expect, for the full year 2013, the PPA charge to be lower than 2012. Charles Winston - Redburn Partners LLP, Research Division: Could I just loop back very quickly? Just one last follow-up. On the very least, in the revenue side, could you just help us what's the size of the FX impact? I understand your unwillingness necessary to split the rest of it out, but FX isn't competitively sensitive. Could you just give us what that number was? Hans Dieter Pötsch: To say directly, the impact of the exchange rates on the revenue side is somewhat less than EUR 1 billion.

The next question comes from Stuart Pearson of Morgan Stanley. Stuart Pearson - Morgan Stanley, Research Division: Just a few questions. Apologies if I missed any of the answers for these. But just quickly on that provision for DSG in China, can you just confirm which division that was booked in? Was it all on the VW brand or elsewhere? And then just staying with China, obviously that issue came, I think, towards the end of the first quarter and would have impacted what was still a very strong performance there. But have you started to see any fallout in terms of customer perception or behavior footfall in China as a result of that? And then just finally on China, I wonder if you could update us at all on what the net cash position is on those joint ventures and what dividend we should expect to see out of them this year. And if you can, what quarters we should expect to see that, whether it's Q2 and Q4 again?

Okay. Thank you, Stuart, for your questions. So first of all, you would like to know where the DSG contingency reserves are booked, in which line, if that is in the Passenger Car result included or not. And the second question refers to China, what is our current impression from the market, do we see any changes there or any reluctancy. And then you would like to know the net cash position at our joint ventures in China and also the amount of dividends we can expect during the year and if we can even give some highlights when this money will come us for the rise in Volkswagen.

So maybe I start with the general situation in the Chinese market. The Chinese market is still on a healthy pace. The change of the new government has been done very properly, and we believe that the general market will continue to grow in 2013. I think that is clearly proved as well. And if you can see the actual performance, we only have reasons to strongly to believe this. The other question of what might be behind your point is, do we have had any negative effect in terms of appreciation from our customers due to the issues of DSG. I think, first, of course, we have reacted very fast and very clear. And maybe we had 1 or 2 weeks of discussion in China about our DSG issue, maybe we still have some. But let's be honest, due to the very efficient and very fast reaction and very clear commitment of Volkswagen to solve the problems, we do see today a sales situation which is, in general, healthy. We do not expect as well that this situation is changing, so we are going on the pace and going on the path of growth further on. And if you see Volkswagen has a history in China which is now nearly 30 years, so it's very clear as well that this long partnership which has been and which will be continued is giving a very good pace and a very good base for continuing to being on the success road. Hans Dieter Pötsch: So to continue on with the question where the gearbox charge would sit, I think it's best to refer to Page 12 in the presentation, where you'll find it in the other line. And then on the net cash position of the Chinese joint ventures, we still are operating on a relatively high level of net cash sitting there in spite of huge investments taking place in it, while we expect a similar amount as in 2012, that's when we were able to book a dividend income of around EUR 2 billion, and we do expect somewhat similar amount also in 2013. Stuart Pearson - Morgan Stanley, Research Division: Okay. So on that -- going back to where that DSG thing was booked. I mean, not necessarily on the walk-down, but within specific brand groups, was it shared across all VW or is it within one brand group or the other line? Or can you not answer that? Hans Dieter Pötsch: Again, it's not allocated with a specific brand. It sits in the other line.

Our next question comes from Fraser Hill of Bank of America. Fraser Hill - BofA Merrill Lynch, Research Division: I've got just 2 questions left on Audi and also the China dividend again. On Audi, the margins were very strong there. You've had a reduction in sales. We've heard a lot from you about the mix headwinds and the German market decline. So given those headwinds on the top line and the revenue base and also pricing across the premium market, what was sort of supporting Audi margins in the first quarter? Where were the tailwinds? Was that coming from cost or was that actually your product mix itself maybe into China? Maybe if you can give us some color there. And I'd also be interested to know what effect Ducati had on the quarter just year-on-year, maybe in absolute sense or on the margins? And then just a follow-up on the China dividend question. You talked about the China dividend being somewhat in the magnitude of EUR 2 billion that you received in the prior year. Why would it not be up substantially given the very, very strong level of growth of China operating profit that you saw in proportion in 2012 versus 2011? Why would that dividend follow through in 2013, not jump substantially as well?

Okay. Thank you, Fraser, for your 2 questions. First question refers to the performance of Audi and the strong margins we have seen in the first quarter, so what are the main drivers behind that good performance. If we can explain a little bit the tailwinds and the drivers there. And the second question refers to the China dividend. You are wondering why the dividend from China cannot be actually even higher. That was your question. Hans Dieter Pötsch: So on Audi, first of all, to confirm that, that's an excellent performance, without any doubt, Audi was able to turn up with. And it's a continuation of the performance we saw last year. Specifically, it's the trends which we also saw last year do continue on. That's -- to throw probably 2 examples, the new Audi A3 is performing extremely well in the market. Better cost position is coming through. And also, to take another example in terms of market, the performance in the U.S. is also on a relatively high level. There are a number of reasons, nothing really standing out. But putting all of them together, a real sustained excellent performance that Audi is showing up here. And then on the dividend, China couldn't it be more? Well, it's early in the year, and you know us well enough. Normally, we are conservative. Fraser Hill - BofA Merrill Lynch, Research Division: Okay. Just to follow up on the Audi question about Ducati. What kind of effect did Ducati have in the quarter? Hans Dieter Pötsch: Ducati had an effect on the operating profit line of roughly EUR 20 million.

Our next question comes from Michael Punzet of DZ Bank. Michael Punzet - DZ Bank AG, Research Division: Michael Punzet, DZ Bank. I have only one question left, that is related to your distribution expenses. They went strongly up by roughly EUR 500 million in the first quarter or as a percentage of sales went up from 8.6% to 9.9%. Maybe you can explain a bit what's behind that development. Is that related to the pricing -- increasing pricing pressure in Europe? And maybe you can give an outlook for the upcoming quarters how this ratio will develop.

Okay. Thank you, Michael. One question for us, how can we explain the increase in distribution cost in the first quarter and if we can give guidance for the full year on outlook for that Hans Dieter Pötsch: So on the distribution costs, if I may add, in a similar way also on the administration side, we have consolidation effects coming in from Porsche, that's representing the biggest jump. And then, of course, the new model introductions also play a role. So on that basis, we feel we will see this trend continuing on. Exchange rate also plays a little bit of role, that's a bit uncertain for the future. But mainly, it's Porsche and the new model introductions.

Our next question comes Erich Hauser of Crédit Suisse. Erich Hauser - Crédit Suisse AG, Research Division: Two quick ones for me. Number one, Professor Winterkorn commented at the AGM that 2013 will be a real stress test for you and the industry, and it would also be what he called "The Year of Truth". The German term that he used was [German]. If 2013 is such a stress test and a year of truth, how do you expect your competitors will respond to that stress? And do you think there will be more or less discipline in the industry? Are you seeing any indications for changes in competitive behavior as a result of this? And under this stress test, do you see a realistic chance that any of your competitors might be failing? And the second question and this one is specifically for Mr. Klingler, if I look at comments from MAN and if I look at certainly the order intake for Europe, it looks as if the brand is losing market share, at least it sounds comfortable than the competitors. And I was wondering from your perspective, from sort of the sales marketing perspective, what do you think is the fundamental problem is at MAN, how can it be fixed and how long do you think it's going to take the business to bring its commercial performance back to where you would expect it to be.

Okay. Thank you, Erich. The first question refers to the year 2013 because we think it will be a challenging year and you want to know what we think how the competitors will behave, so maybe we can give here -- or we can comment on that. And the second question refers to the MAN performance, what do we think of that and how that could change during the year.

Well, I'll try to answer the first question, but I'm probably in the position that you will not be very satisfied with the answers. First, I personally think that we should talk about what we are doing and not too much what others are doing, and therefore, we are not too much in the position to comment the competitive behavior. In general, it seems that essentially, particularly in Europe, where the market is not in a good shape, that the competitive environment will have, of course, additional pressures to see. So we believe this could come. We are not excluding this particularly. But please understand that we do not comment on the question who will survive, who will not survive, what the others are doing. We are here to comment essentially, particularly, what Volkswagen Group is doing and how we can continue on this way. So I'm sorry for this answer. I know this may be not giving you the information that you would like, but please accept that we would like to stay on this position. In terms of MAN, of course, we compare a relatively strong quarter of 2012 with the relatively less successful quarter in 2013. So what we can see is that MAN had a continuous satisfying position in terms of sales last year in the first quarter, and it has taken more time that they have been effected by the truck market, which has gone down. So the comparison to an effected truck market this year is, of course, a little bit misleading. If we then go where MAN is very strong, you see them essentially in Europe and something in South America, of course. You see as well that the market, particularly in Europe, has gone down by 18%. So MAN has lost some market share in Europe, and everybody is working on that to recover what we believe as well. That is very important that we keep on not only the market share, but as well the pricing level so that we have a very good chance to come to a good balance in between of both sides.

[Operator Instructions]

Our next question comes from Jose Asumendi of JP Morgan. Jose M. Asumendi - JP Morgan Chase & Co, Research Division: Just one, it will be on product costs. The EUR 300 million looks like a quite promising start. So I was wondering if you see a chance to outperform the EUR 1 billion cost savings target that you have for the year.

Okay. Thank you, Jose, for your question on product costs, so what is our expectation and our target for the full year after the quarterly performance. Hans Dieter Pötsch: Well, I think on that point, everything looks good. We are pretty much on target with this. And from today's point of view, I would say that the EUR 1 billion target looks a bit conservative.

Our next question comes from Frank Biller of LBBW. Frank Biller - Landesbank Baden-Wurttemberg, Research Division: It's one question about China again. What is your expectation for the market growth in 2013? So you just said it's an increase which is expected. I read an interview where you stated it was an increase of more than 10%. Is this true for the market or the expectation for Volkswagen? And what about the profitability in China when taking this EUR 1,500 per car in China? It seems to me that it's at the highest-ever return here in China per car. What is your expectation for the full year? Are you expecting an increase in earnings versus an increase in sales?

Okay. Thank you, Frank. So 2 questions, one -- both related to China. The first one is with regards to our expectations in terms of market costs, what kind of growth do we expect in 2013. And the second question refers to our profitability in China. If we can give there guidance for the full year, if we expect growing sales and growing profits, also margin-wise.

So maybe if you allow me to start with general market expectations. As I mentioned before, the change of government has happened very smoothly, finally. And as a consequence, we believe that the market will have, in general, something like a growth between 6% to 8%, so this is the general market perception, what we have, as well, announced during our Shanghai motor show. Of course, it all depends on what will happen in the last quarter, but today, we have not any signs which gives us further doubts about this kind of assumption. And then, of course, as we always believe that the market is one number and our performance is another one, it could happen that we come closer to the number what you just have mentioned. So we try to outperform the market in 2013 in China again. Frank Biller - Landesbank Baden-Wurttemberg, Research Division: And the absolute earnings? Hans Dieter Pötsch: And to the second question concerning revenues and operating profit, I think as Mr. Klingler said, this is still pretty positive framework. Mobility continues to be a very high value in China that's why we assume that revenue and operating profit will grow in this year.

Our next question comes from Philippe Houchois of UBS. Philippe Houchois - UBS Investment Bank, Research Division: Just one question, of course. One on -- Mr. Klingler, when you assess the level of inventory in the system, both in your books and at the dealer level, how do you appreciate the self-registration of the amount of cars that are especially not in inventory? Do you take that into account in your assessment that your stock level is fine? Or is that something that you assume is gone from your registering?

So thank you, Philippe. So once again, a question with regard to dealer level and self-registration and the stock levels, if we can give you some more information.

So maybe the first remark is that we are, in terms of self-registration, extremely careful. But that is the first point. The second point is, if I were not seeing them in new car level, I would see them in the used car stock. So you can trust us that we see for the total chain what the level of stocks are. So therefore, when we're talking that the stocks are healthy -- by the way, it's true for both. It's true for the new cars, as well as the used cars in terms of that perspective. So we don't see here any further need of remarks to make. I confirm the inventory is in a healthy level on the new car level, and just to add -- in terms of used car level, we don't see any major issues as well. As a consequence, no issues in terms of self-registrations wherever they might happen.

Our last question comes from Adam Hall [ph] of Berenberg.

Adam Hall [ph] of Berenberg. Just firstly -- a question on the German car market. Historically, I understand, it used to be a pretty good market for your margins and profitability, generally. Is that still the case? And if you could just give us a little bit more of a feeling what's really going on there in terms of very low level of the retail sales and what's going on in fleets and pricing. Just a little bit more in this quite dramatic changes we're seeing in the German market.

Okay. Thank you, Adam, for that question on the German market. If we can give your some flavor about the current condition.

So if we look at the German market, it is clear to say that the German market is going down. The German market used to be on a level which is about 3.2 million to 3.3 million. It used to be even nearly up to 3.9 million. We believe an average normal market would be something, as we mentioned, 3.2 million, 3.3 million. But actually, there's a general situation where the market is going down. The second point is in terms of mix between retail and fleet, it is not something very particular which is happening in Germany. The structure between particular sales and customer sales and fleet has come now to a more normal level. It was more changed during the scrappage campaign because the scrappage campaign was essentially an advantage for end customers and therefore, the ratio has been differentiated. So it's not unusual, particular big movement in terms of these kind of ratios. We see as well that the car market is, for us, still very interesting, and we are working here on a good level. You've seen that our total market share in Germany is continuing to be on a nice level. We have increased our market share over the last 4, 5 years, by 3%, 4%, 5%, which is, I would say, substantial. And we see as well that we are, again, very much balancing our situation in terms of sales inventories, incentives, in terms of residual values, used cars and used car sales so that we believe that we have actually a decent and positive feeling about the German market, not only in general, but as well for us. And again, yes, the market is going down, and yes, there is, of course, an impact for us, but not in terms of structure.

Can I just a -- are the margins there still above the average? And has pricing changes over the last month been any different to the rest of Europe or not?

We feel that in terms of pricing, we're still in a very nice level.

I see one last question from a journalist.

The question comes from Jan Swartz from Reuters.

It's only one on -- I would like to know if -- could you please give us a feeling how -- on how big the effect of the discount in the market are on your profit? Can you measure how big the share of the pricing, given operating profits declined?

Sorry, Mr. Swartz, your line is really -- it's difficult to understand. Can you repeat your question?

All right. It's only one very brief question. Could you please measure the effect on the discount battle in Europe on the operating profit? How big is the share of pricing on the operating profit in -- especially in VW brand?

Okay, thank you. So you would like to know what is the possible impact coming from incentives on the operating result, especially on the development of the Volkswagen Passenger Car business.

The effect is minimal for the simple reason because it's been, to a large extent, compensated by counterbalancing measures.

Okay, thank you very much. So we can close the call. Thank you for listening, and have a good day. Goodbye from Wolfsburg.

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.