Group Management Report

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Business Development

The global economy recorded positive growth in fiscal year 2021 as it recovered from the disruption caused by the Covid-19 pandemic. Global demand for vehicles was up on the previous year. Amid continued challenging market conditions, the Volkswagen Group delivered 8.9 million vehicles to customers.


At the end of 2019, initial cases of a potentially fatal respiratory disease became known in China. This disease is attributable to a novel virus belonging to the coronavirus family. Infections also appeared outside China from mid-January 2020. The number of people infected rose very rapidly in the course of 2020, albeit with differences in timing and regional spread. Around the world, measures to contain the pandemic were taken and adapted at national level and with varying levels of intensity. However, these ultimately failed to bring the spread of the SARS-CoV-2 virus under control. In addition, aid packages to support the economy were agreed by the European Commission and by numerous governments in Europe and other regions, and economic stimulus measures were introduced to counter the pandemic’s impact. Throughout the whole of 2020, the global spread of the SARS-CoV-2 virus brought enormous disruption to all areas of everyday life and the economy.

The mostly dynamic increase in the rate of infection continued in many places also throughout the first quarter of 2021. This was accompanied by ongoing disruption – such as contact and mobility restrictions or limitations on business activities – in many parts of the world. With the increased availability of testing capacities and vaccines, some countries have permitted the extensive reopening of everyday life and the economy. In China in particular, the measures taken resulted in a removal of restrictions. In most of the world, the rate of new infections initially declined in the second quarter of 2021, leading to further easing of the measures taken to contain the pandemic. From the middle of the year, however, some countries recorded a renewed increase in infection rates, which was mainly due to new variants of the SARS-CoV-2 virus. Some restrictions returned in response to the situation. Most regions of the world saw a declining rate of new infections in the third quarter of 2021. Against this backdrop, many countries largely lifted their restrictions on everyday life and the economy, depending on the progress of their vaccination campaigns. Temporary increases in case numbers – primarily associated with increased travel – only rarely resulted in the measures being tightened again. Mainly due to new variants of the SARS-CoV-2 virus, numerous countries around the world again recorded some very dynamic increases in infection rates in the course of the fourth quarter, which, depending particularly on the country’s vaccination progress, resulted in renewed restrictions.

Overall in 2021, the global spread of the SARS-CoV-2 virus again brought substantial disruption to all areas of everyday life and the economy.


The global economy recovered in 2021 due to the temporary relaxation of many restrictions and recorded growth of 5.6  (−3.4)%. The average rate of expansion of gross domestic product (GDP) was far above the previous year’s level in both the advanced economies and the emerging markets. The progress made by many countries in administering vaccines to their populations had a positive effect, while the emergence of new variants of the virus led to renewed national rises in infections. At a national level, performance was dependent among other things on the extent to which the negative impacts of the Covid-19 pandemic were materializing and the intensity with which measures were taken to contain the spread. The governments and central banks of numerous countries continued to maintain their expansionary fiscal and monetary policy measures. Interest rates therefore remained relatively low. Prices for many energy and other commodities rose significantly on average year-on-year, amid growing shortages of intermediates and commodities. On a global average, consumer prices increased at a faster pace than in 2020, and global trade in goods grew in the reporting year.

Europe/Other Markets

The economy in Western Europe recorded significantly positive overall growth of 5.4 (−6.5)% in 2021. This trend was seen in all countries in Northern and Southern Europe. The reasons for this included the increased resilience to high infection rates experienced by the economies in many countries. At the same time, the economic recovery was hit by temporary national restrictions to contain the pandemic and the imbalances between supply and demand that partially resulted from them.

Further, uncertainty was caused in fiscal year 2021 by the United Kingdom’s exit from the European Union (EU) and the new Trade and Cooperation Agreement associated with this.

In the economies of Central and Eastern Europe, real absolute GDP increased significantly by 5.6 (−2.4)% in 2021. Economic output increased by 6.4 (−2.1)% in Central Europe and 4.2 (−2.8)% in Eastern Europe. The same trend was also observed in Russia; economic output in Eastern Europe’s largest economy grew by 4.3 (−2.9)%.

In Turkey, the GDP growth rate in fiscal year 2021 rose to 10.3 (1.6)% amid high inflation and a fall in the value of the local currency. South Africa saw significant GDP growth of 4.7 (−6.4)% in the reporting period, amid persistent structural deficits and political challenges.


Germany’s economic output recorded a positive growth rate of 2.7 (−4.9)% in the reporting year. The labor market recovered over the course of the year with a fall in the unemployment rate and the number of people on Kurzarbeit (short-time working). The temporary easing of restrictions on everyday life and economic activity led confidence among consumers and companies to improve. On average, it exceeded the prior-year levels. Confidence rose significantly in the industrial and service sectors.

North America

US economic output increased by 5.7 (−3.4)% in the reporting year despite soaring rates of infection at times. The US government approved a further comprehensive stimulus package in the first quarter of 2021 to strengthen the economy. The US Federal Reserve maintained its low interest rates, alongside other measures to support the economy. The weekly number of people filing new claims for unemployment benefits showed a downward trend. This was reflected accordingly in the unemployment rate, which fell significantly year-on-year in the reporting period to 5.4 (8.1)% but was still higher than the pre-crisis level seen in 2019. GDP rose by 4.6 (−5.2)% in neighboring Canada and by 5.5 (−8.4)% in Mexico.

South America

Brazil’s economy posted growth of 4.4 (−4.2)% in 2021 despite high infection rates. Argentina registered a positive economic performance with year-on-year growth of 8.4 (−9.9)% amid continued high inflation and a substantial depreciation of the local currency.


The Chinese economy, which had been exposed to the negative effects of the Covid-19 pandemic earlier than other economies and tackled isolated outbreaks in 2021 with a strict zero-Covid strategy, expanded by 8.1 (2.3)% overall. India registered strong growth of 8.1 (−7.5)% amid at times relatively high infection rates. Japan recorded positive growth of 1.9 (−4.5)% versus the prior year.


Percentage change in GDP

Economic growth (line chart)


Index based on month-end prices: as of December 31, 2020 = 100

Exchange rate movements (line chart)