Investments

INVESTMENTS IN ASSOCIATES

From a Group perspective, the associates Sinotruk (Hong Kong) Ltd., Hongkong, China (Sinotruk), Bertrandt AG, Ehningen, Germany (Bertrandt), and There Holding B.V., Rijswijk, the Netherlands (There Holding), were material at the reporting date.

Sinotruk

Sinotruk is one of the largest truck manufacturers in the Chinese market. There is an agreement in place between Group companies and Sinotruk regarding a long-term strategic partnership, under which the Group participates in the local market. Sinotruk’s principal place of business is in Hongkong, China.

As of December 31, 2021, the quoted market price of the shares in Sinotruk amounted to €938 million (previous year: €1,436 million).

Bertrandt

Bertrandt is an engineering partner to companies in the automotive and aviation industry. Its portfolio of services ranges from developing individual components through complex modules to end-to-end solutions. Bertrandt’s principal place of business is in Ehningen, Germany.

As of December 31, 2021, the quoted market price of the shares in Bertrandt amounted to €168 million (previous year: €116 million).

There Holding

Together with the BMW Group, Daimler AG and other companies, Volkswagen holds an equity investment in There Holding B.V., Rijswijk (the Netherlands), an investment company. In turn, There Holding B.V. held around 60% of the shares of HERE International B.V., Eindhoven (the Netherlands), as of the end of fiscal year 2021. HERE International B.V. is one of the world’s largest producers of digital road maps for navigation systems. Since the interest held does not grant control in accordance with IFRS 10, HERE International B.V. is included in the financial statements of There Holding B.V. as an associate using the equity method.

In the previous year, a capital increase had been implemented at There Holding B.V., Rijswijk (the Netherlands).

Moreover, the acquisition of shares in HERE International B.V., Eindhoven (the Netherlands), by additional investors had resulted in a capital decrease at the level of There Holding B.V. in the previous year. No capital transactions were carried out in fiscal year 2021.

Volkswagen’s ownership interest in There Holding B.V. continues to amount to 29.7%.

Navistar

On July 1, 2021, a TRATON GROUP company acquired all of the outstanding shares in Navistar International Corporation (Navistar), a US manufacturer of commercial vehicles. TRATON SE now indirectly holds 100% of the shares in Navistar International Corporation, which until then was accounted for using the equity method (interest of 16.7%). Trading in Navistar shares on the New York Stock Exchange has been discontinued (see “Key events” section for details). As of December 31, 2020, the quoted market price of the shares in Navistar amounted to €596 million.

The carrying amount includes shares in Gotion and Argo AI, among others.

There were unrecognized losses of €7 million (previous year: €7 million) relating to investments in associates. Furthermore, there were no contingent liabilities or financial guarantees relating to associates.

INTERESTS IN JOINT VENTURES

From a Group perspective, the joint ventures FAW-Volkswagen Automotive Company Ltd., Changchun, China, SAIC-Volkswagen Automotive Company Ltd., Shanghai, China, and SAIC-Volkswagen Sales Company Ltd., Shanghai, China, were material at the reporting date due to their size.

FAW-Volkswagen Automotive Company

FAW-Volkswagen Automotive Company develops, produces and sells passenger cars. There is an agreement in place between Group companies and the joint venture partner China FAW Corporation Limited regarding a long-term strategic partnership. The principal place of business is in Changchun, China.

SAIC-Volkswagen Automotive Company

SAIC-Volkswagen Automotive Company develops and produces passenger cars. There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a long-term strategic partnership. The principal place of business is in Shanghai, China.

SAIC-Volkswagen Sales Company

SAIC-Volkswagen Sales Company sells passenger cars for SAIC-Volkswagen Automotive Company. There is an agreement in place between Group companies and the joint venture partner Shanghai Automotive Industry Corporation regarding a long-term strategic partnership. The principal place of business is in Shanghai, China.

There were unrecognized losses of €2 million (previous year: €26 million) relating to investments in joint ventures. Contingent liabilities to joint ventures amounted to €239 million (previous year: €248 million), while financial guarantees stood at €70 million (previous year: €70 million). Cash funds of joint ventures amounting to €185 million (previous year: €197 million) are deposited as collateral for asset-backed securities transactions and are therefore not freely available.

IFRS 5 – NONCURRENT ASSETS HELD FOR SALE

On March 26, 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 has 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 it as an associate using the equity method. Once all closing conditions had been met, the transaction was completed on January 1, 2022.

In accordance with IFRS 5, SITECH Sp. Z o.o., Polkowice/Poland, and its consolidated subsidiaries SITECH Sitztechnik GmbH and SITECH Dongchang Automotive Seating Technology Limited, Shanghai/China, were classified as a disposal group held for sale as of December 31, 2021, which was recognized at its carrying amount.

There are also plans to sell property, plant and equipment in an amount of €21 million in fiscal year 2022. These items of property, plant and equipment were classified as held for sale in accordance with IFRS 5. The sale will not have any material effect on the Volkswagen Group’s results of operations or net liquidity. The sale of the property, plant and equipment is expected to be completed in the first quarter of fiscal year 2022.

The assets and liabilities held for sale have been recognized at the lower of their carrying amount and fair value less expected costs of disposal and presented in separate balance sheet items. The main groups of assets and liabilities classified as held for sale are shown below.

The cumulative income and expenses in connection with the disposal groups held for sale are recognized in other comprehensive income; they amount to €14.7 million (of which €1.1 million is attributable to noncontrolling interests).