Segment reporting

Segments are identified on the basis of the Volkswagen Group’s internal management and reporting. In line with the Group’s multibrand strategy, each of its brands (operating segments) is managed by its own Board of Management. The Group targets and requirements laid down by the Board of Management of Volkswagen AG must be complied with. Segment reporting comprises four reportable segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering and Financial Services.

The activities of the Passenger Cars and Light Commercial Vehicles segment cover the development of vehicles, engines and vehicle software, the production and sale of passenger cars and light commercial vehicles, and the corresponding genuine parts business. In the Passenger Cars and Light Commercial Vehicles reporting segment, the individual brands are being combined into a single reportable segment, in particular as a response to the high degree of technological and economic interlinking in the production network. Furthermore, there is collaboration within key areas such as procurement, research and development or treasury.

The Commercial Vehicles segment primarily comprises the development, production and sale of trucks and buses, the corresponding genuine parts business and related services. As in the case of the passenger car brands, there is collaboration within the areas procurement, development and sales. The aim is to create closer cooperation within the business areas.

The Power Engineering segment combines the large-bore diesel engines, turbomachinery, special gear units, and propulsion components businesses. Until October 2020, it also included the Renk business; for further information see the “Key events” section.

The activities of the Financial Services segment comprise dealership and customer financing, leasing, banking and insurance activities, fleet management and mobility services. In this segment, activities are combined for reporting purposes taking into particular account the comparability of the type of services and of the regulatory environment.

Purchase price allocation for companies acquired is allocated directly to the corresponding segments.

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

In segment reporting, the share of the result of joint ventures is contained in the result of equity-accounted investments in the corresponding segments.

The reconciliation contains activities and other operations that by definition do not constitute segments. It also includes the unallocated Group financing activities. Consolidation adjustments between the segments are also contained in the reconciliation.

Investments in intangible assets, property, plant and equipment, and investment property are reported net of investments in right-of-use assets from leases.

As a matter of principle, business relationships between the companies within the segments of the Volkswagen Group are transacted at arm’s length prices.

REPORTING SEGMENTS 2019

€ million

 

Passenger Cars and Light Commercial Vehicles

 

Commercial Vehicles

 

Power Engineering

 

Financial Services

 

Total segments

 

Recon­ciliation

 

Volkswagen Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

186,511

 

25,401

 

3,995

 

36,446

 

252,353

 

280

 

252,632

Intersegment sales revenue

 

15,762

 

1,043

 

2

 

3,714

 

20,522

 

−20,522

 

Total sales revenue

 

202,273

 

26,444

 

3,997

 

40,160

 

272,875

 

−20,242

 

252,632

Depreciation and amortization

 

14,622

 

2,280

 

420

 

8,080

 

25,402

 

−996

 

24,406

Impairment losses

 

201

 

1

 

 

538

 

740

 

209

 

949

Reversal of impairment losses

 

886

 

71

 

2

 

181

 

1,140

 

−15

 

1,124

Segment result (operating result)

 

15,610

 

1,653

 

−93

 

3,212

 

20,381

 

−3,422

 

16,960

Share of the result of equity-accounted investments

 

3,053

 

225

 

−1

 

71

 

3,349

 

 

3,349

Interest result and other financial result

 

−1,582

 

−70

 

1

 

−64

 

−1,715

 

−238

 

−1,953

Equity-accounted investments

 

6,232

 

1,118

 

34

 

784

 

8,169

 

 

8,169

Investments in intangible assets, property, plant and equipment, and investment property

 

17,098

 

1,460

 

197

 

223

 

18,977

 

423

 

19,401

REPORTING SEGMENTS 2020

€ million

 

Passenger Cars and Light Commercial Vehicles

 

Commercial Vehicles

 

Power Engineering

 

Financial Services

 

Total segments

 

Recon­ciliation

 

Volkswagen Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

160,674

 

21,114

 

3,638

 

37,223

 

222,649

 

235

 

222,884

Intersegment sales revenue

 

15,310

 

1,042

 

2

 

3,555

 

19,908

 

−19,908

 

Total sales revenue

 

175,984

 

22,156

 

3,640

 

40,778

 

242,557

 

−19,673

 

222,884

Depreciation and amortization

 

15,428

 

2,309

 

379

 

8,647

 

26,763

 

−1,014

 

25,749

Impairment losses

 

370

 

179

 

64

 

742

 

1,355

 

−49

 

1,306

Reversal of impairment losses

 

32

 

1

 

 

204

 

237

 

−8

 

229

Segment result (operating result)

 

8,381

 

−79

 

−482

 

3,012

 

10,832

 

−1,157

 

9,675

Share of the result of equity-accounted investments

 

2,615

 

85

 

−3

 

60

 

2,756

 

 

2,756

Interest result and other financial result

 

−3

 

−170

 

−2

 

−296

 

−471

 

−294

 

−765

Equity-accounted investments

 

8,129

 

1,135

 

29

 

786

 

10,080

 

 

10,080

Investments in intangible assets, property, plant and equipment, and investment property

 

15,677

 

1,309

 

147

 

208

 

17,340

 

405

 

17,745

RECONCILIATION

€ million

 

2020

 

2019

 

 

 

 

 

Segment sales revenue

 

242,557

 

272,875

Unallocated activities

 

997

 

969

Group financing

 

27

 

28

Consolidation/Holding company function

 

−20,698

 

−21,239

Group sales revenue

 

222,884

 

252,632

 

 

 

 

 

Segment result (operating result)

 

10,832

 

20,381

Unallocated activities

 

−28

 

−72

Group financing

 

−8

 

−38

Consolidation/Holding company function

 

−1,121

 

−3,312

Operating result

 

9,675

 

16,960

Financial result

 

1,991

 

1,396

Consolidated result before tax

 

11,667

 

18,356

BY REGION 2019

€ million

 

Germany

 

Europe/Other markets1

 

North America

 

South America

 

Asia-Pacific

 

Hedges sales revenue

 

Total

1

Excluding Germany.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

48,991

 

105,009

 

43,351

 

11,297

 

43,974

 

11

 

252,632

Intangible assets, property, plant and equipment, lease assets and investment property

 

101,092

 

47,353

 

26,771

 

3,064

 

3,562

 

 

181,842

BY REGION 2020

€ million

 

Germany

 

Europe/Other markets1

 

North America

 

South America

 

Asia-Pacific

 

Hedges sales revenue

 

Total

1

Excluding Germany.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

42,847

 

90,652

 

36,810

 

8,632

 

44,288

 

−345

 

222,884

Intangible assets, property, plant and equipment, lease assets and investment property

 

105,630

 

47,680

 

23,852

 

2,323

 

3,611

 

 

183,096

Allocation of sales revenue to the regions follows the destination principle.

The allocation of interregional intragroup transactions regarding the segment assets has been presented uniformly according to the economic ownership.