Group Management Report

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Results of Operations, Financial Position and Net Assets

Despite the continuing negative impact of the Covid-19 pandemic and, in particular, limited vehicle availability as a result of the semiconductor shortage, the Volkswagen Group generated significantly higher sales revenue and doubled its operating result in the reporting year.

The Volkswagen Group’s segment reporting comprises the four reportable segments of Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering and Financial Services, in compliance with IFRS 8 and in line with the Group’s internal financial management and reporting structures.

At Volkswagen, segment profit or loss is measured on the basis of the operating result.

The reconciliation contains activities and other operations that do not, by definition, constitute segments. These include the unallocated Group financing activities. Consolidation adjustments between the segments (including the holding company functions) are also contained in the reconciliation. The purchase price allocations for Porsche Holding Salzburg and Porsche, Scania, MAN and, since July 2021, Navistar are allocated to their corresponding segments.

The Automotive Division comprises the Passenger Cars and Light Commercial Vehicles segment, the Commercial Vehicles segment and the Power Engineering segment, as well as the figures from the reconciliation. The Passenger Cars and Light Commercial Vehicles segment is combined with the reconciliation to form the Passenger Cars Business Area, while the Commercial Vehicles and Power Engineering segments are identical to the business areas of the same name. The Financial Services Division corresponds to the Financial Services segment.


€ million


Passenger Cars and Light Commercial Vehicles


Commercial Vehicles1


Power Engineering


Financial Services


Total segments




Volkswagen Group
















Sales revenue















Segment profit or loss (operating result)















as a percentage of sales revenue















Capex, including capitalized development costs
















From July 1, 2021, the figures include Navistar.


At the beginning of July 2021, a TRATON GROUP company acquired all of the outstanding shares in Navistar International Corporation (Navistar), a US manufacturer of commercial vehicles. The purchase price of €3.1 billion (USD 3.7 billion) was paid in cash. TRATON SE now indirectly holds 100 % of the shares in Navistar, which was previously accounted for using the equity method (interest of 16.7 %). The initial recognition of the acquisition has not been finalized due to the size of the transaction, as the internal reviews of the underlying information have not yet been completed. This means that the amounts recognized as of December 31, 2021 are provisional. Total assets increased as a result of the addition of the primary assets and liabilities of Navistar and of their remeasurement, which was required as part of the purchase price allocation. The acquisition resulted in goodwill in the amount of €2.8 billion to reflect the synergies arising from the business with Navistar. These relate particularly to the growth in the share of the market, to purchasing,

production costs, modularization and the use of shared components, and to the area of research and development. The consolidation of Navistar as of July 1, 2021 led to an increase of €3.5 billion in the Volkswagen Group’s sales revenue as of December 31, 2021. Moreover, the transition of the treatment of Navistar from equity accounting to consolidation gave rise to a non-cash gain of €182 million during initial consolidation, which was presented in the financial result. Earnings after tax including impairment losses on the realization of hidden reserves decreased by €0.2 billion.


In March 2021, Brose Fahrzeugteile SE & Co. Kommanditgesellschaft (Brose) and VW Finance Luxemburg S.A., a subsidiary of Volkswagen AG, entered into an agreement to establish a jointly operated company for the development and manufacture of complete seat units, seat structures and components, and solutions for the vehicle interior. As part of this arrangement, Brose acquired half of the shares of the Volkswagen Group company SITECH Sp. z o.o., Polkowice/Poland. Brose and Volkswagen each hold 50 % of the jointly operated company, whereby Brose will take the industrial lead. Consequently, Brose will control the jointly operated company and Volkswagen, given its significant influence following the transaction, will account for the company as an associate using the equity method. Once all closing conditions had been met, the transaction was completed on January 1, 2022. The assets of SITECH were classified as held for sale in accordance with IFRS 5 as of the end of the fiscal year.


In 2021, the Volkswagen Group and Rimac Automobili d.o.o., Sveta Nedelja/Croatia (Rimac), established Bugatti Rimac d.o.o., which has its headquarters in Sveta Nedelja. Volkswagen contributed its consolidated subsidiaries Bugatti Automobiles S.A.S, Molsheim/France and initially 51 % of Bugatti International S.A., Strassen/Luxembourg. After proportional profit elimination, the contribution led to a non-cash gain of €124 million, which was recognized in the other operating result.


The sale of MAN Truck & Bus Österreich GesmbH, Steyr/Austria (MTBÖ) as part of restructuring measures was completed with effect from August 31, 2021. The sale led to the recognition of an expense, of which €160 million was mainly attributable to impairment losses on property, plant and equipment and €144 million to a loss on deconsolidation. The total expense of €304 million related to the disposal is presented in other operating expenses. The sale of the shares in MTBÖ resulted in a net cash outflow of €199 million, which is presented in cash flows from investing activities.


The merger of MAN SE (MAN) with TRATON SE (TRATON) was adopted by resolution of the Annual General Meeting of MAN SE at the end of June 2021. The merger resolution also triggered the process to transfer the shares held by noncontrolling interest shareholders of MAN to TRATON against payment of an appropriate cash settlement (merger squeeze-out). In this context, the present value of the put options granted, amounting to approximately €587 million, was recognized as a current liability directly in equity. The noncontrolling interests in the Volkswagen Group’s equity, as well as the retained earnings and other reserves attributable to the shareholders of Volkswagen AG declined accordingly. The merger of MAN with TRATON was entered in the commercial registers for MAN and TRATON on August 31, 2021. The squeeze-out took legal effect upon entry in the commercial register. This was followed at the beginning of September 2021 by the disbursement of the cash settlement of €70.68 per ordinary and preferred share to the noncontrolling interest shareholders of MAN SE, thus completing the MAN SE squeeze-out. The appropriateness of the cash settlement is being reviewed by judicial award proceedings initiated by noncontrolling interest shareholders who had received a settlement as a result of the squeeze-out.


In mid-June 2021, Volkswagen and the Swedish battery cell producer Northvolt AB agreed to concentrate production of Volkswagen premium cells in Skellefteå/Sweden. In connection with this, Volkswagen participated in a financing round at Northvolt AB that was proportionate to its shareholding, investing a further USD 650 million in the company. Volkswagen also increased its existing convertible loan by a further €190 million and, at the same time, converted this part of the loan to preferred shares. This increased Volkswagen’s ownership interest in Northvolt AB to 23.6 %. Due to favorable terms and conditions on conversion, the measurement of the converted loan resulted in non-cash income of €62 million. As a result, the carrying amount of the equity investment in Northvolt AB rose by €796 million. A convertible loan of €240 million remains on issue.


To expand its battery expertise, Volkswagen acquired an interest in Gotion High-Tech Co., Ltd., Hefei/China through Volkswagen (China) Investment Co. Ltd., making it the largest shareholder of the Chinese battery supplier at 26 %. The Group spent a total of €1.2 billion on this transaction. The investment is accounted for using the equity method.


Special items consist of certain items in the financial statements whose separate disclosure the Board of Management believes can enable a better assessment of our economic performance.

In fiscal year 2021, the operating result in the Passenger Cars Business Area was affected by negative special items of €−0.8  (−0.9) billion in connection with the diesel issue. The additional expenses, mainly for legal risks, were offset by income from agreements regarding the settlement of damages.