July - September

Porsche Acquires over 10 Per Cent of VW Common Stock Good Investment for Sports Car Company

Stuttgart. On September 28, 2005, Dr. Ing. h.c. F. Porsche AG, Stuttgart, acquired a total of 32,868,462 Volkswagen AG common shares, representing 10.26 per cent of the common shares. The acquisition of these shares is related to the decision announced by Porsche on September 25, 2005 to assume a stake of approximately 20 per cent in VW’s voting capital. Porsche intends to gain representation on the VW Supervisory Board in line with the planned level of participation.

Porsche is convinced that the investment in VW will pay off in the medium to long term. This takes into account not only future dividend payments from VW, but also potential economies of scale resulting from cooperation between Porsche and VW. Porsche already has intensive business relations with VW – as can be seen from the production of the Cayenne bodyshell or the joint development of a hybrid drive system. Porsche has cooperated with the Wolfsburg-based car group in the past also in other areas.

In view of its high liquidity, Porsche is able to finance the acquisition of this VW common stock without taking up loans. While the liquidity of the Porsche Group will decrease for a short period as a result of the acquisition of VW common stock, the Porsche Group, benefit-ing from its outstanding earnings and strong cash flow, will again show very positive net li-quidity in the 2006/07 fiscal year.

Irrespective of this acquisition of VW common stock, Porsche will continue all projects re-solved on schedule – the development of the Panamera being one example. The attractive-ness of the current model range will furthermore be enhanced to an even higher level by new variants – again as already planned. In addition, the company will successively enter new sales areas. In the 2004/05 fiscal year ending on July 31, the export markets outside North America showed the strongest growth momentum according to provisional figures, growing by 21.1 per cent to 40,334 vehicles.

In the fiscal year just ended, sales in Germany amounted to 13,902 vehicles (plus 14.2 per cent), while in North America – still Porsche’s largest single market – unit sales increased by 8.9 per cent to 34,143. Overall, unit sales by the Porsche Group increased in the last fiscal year by 15 per cent to 88,379 vehicles. According to provisional figures, revenue was up by 6.7 per cent to approximately EUR 6.56 billion, again a new record figure.