Local Value Added
Local production in our most important sales markets is a core element of our sustainable growth strategy. Lower logistics costs, procurement prices in line with local market conditions, elimination of import duties and immunity from volatile exchange rates contribute to the competitiveness of our brands in these markets. And people in the regions profit as well, because we create skilled jobs and contribute to the development of local economies by attracting supplier businesses to the areas around our production locations. In Pune, India, for example, 69 new supplier businesses have been founded since our plant was set up, creating around 13,500 direct and indirect jobs. And thanks to the long-term presence of partners at our Kaluga site, the plant there can now draw on more than 60 local suppliers for the models produced.
Creating jobs in our plants and with our suppliers and strengthening regional economies is a key part of our growth strategy. But we don’t stop there. As a major player in regional economies and with the aim of actively promoting the United Nations’ Sustainable Development Goals (SDGs), we support local projects related to the arts, culture, education, the sciences, health and sports, as well as structural development and nature conservation in the regions (CSR Projects Worldwide).
In the reporting period, we were involved in 202 projects, for which we provided a total of €60,4 million in funding. And through our payment of taxes and duties, we help ensure that state and municipal investments in infrastructure and public welfare are possible in many parts of the world.
Taxes and Subsidies
We pay taxes wherever we add value. Worldwide, we paid around €3.3 billion in income taxes; by far the largest proportion of this was paid in Germany. In the 2016 fiscal year, the Volkswagen Group received €435 million in performance-related public subsidies. Furthermore, government grants of €218 million were deducted from the costs of property, plant and equipment, and another €12 million in noncash benefits received were not capitalized as asset costs.