Volkswagen Group AG SWOT and PESTLE Analysis

Volkswagen in German means 'People's Car' symbolizing that the company offers a wide spectrum of cars suitable for diverse needs. Volkswagen group is the parent company of top independent brands viz., Audi, BMW, Lamborghini, Skoda, etc., offering a luxurious suite of cars. Volkswagen is also popular among the masses for providing cost efficient and primary models. Innovation and diversified product portfolio are the core competencies of Volkswagen Group.
The SWOT analysis is therefore essential to identify the internal strengths and external opportunities that lead to the saturation of the company. The analysis also presents information on the weaknesses and threats to the company that can hinder its growth.
Being one of the oldest company, Volkswagen possesses the largest market share in Europe and is the world's second largest automaker company. The group delivered 8.6 billion cars in 2021. This presents the company with a competitive advantage over its peers from the automobile industry.
Apart from being the second largest automaker internal strategic factors like Strong global presence, huge brand and product portfolio, brand recognition, renowned acquisitions and mergers, joint ventures with Chinese automakers, etc., are quintessential strengths of Volkswagen.
Volkswagen emission scandal and controversies about the fraud had not only ruined the brand reputation but led to the recall of millions of cars. Adversarial publicity has jolted the entire Volkswagen Group. Internal strategic factors like a weak market position in the USA, low margins due to intense competition, quasi reduced marketing of parent brand unlike its subsidiaries and non-environment-friendly cars are some of the inherent weaknesses of the Volkswagen Group.
With rising fuel prices, the demand for full efficient cars and auto driving cars is spiraling. Since the Volkswagen brand is known for manufacturing cost efficient cars this could be a great opportunity in the near future. Volkswagen along with its subsidiary brands is in the phase of developing cars with the latest technology. Being in one of the most competitive industry, Volkswagen is prone to rigorous competition from top international competitor brands in terms of price, efficiency, models, and more.
The SWOT analysis for Volkswagen is presented below in a matrix format followed by a detailed analysis:

Strengths	Weaknesses
1. Widest product portfolio among all automobile companies 2. Strong global reach and presence 3. Futuristic program – “Together – 2025 Strategy” 4. Strong brand image gives it a competitive edge 5. Restructuring and Increased sales revenue	1. Brand image dented by diesel scandal 2. Largest recall rate across U.S. market 3. No technological expertise in electronic vehicle
Opportunities	Threats
1. Large untapped Indian market 2. Investment in sustainable technology 3. Futuristic demand for self-driven vehicles 4. Building a global battery champion through PowerCo	1. Intense competition amongst automobile companies 2. Fluctuations in the economies of markets 3. Semiconductor shortages highly impacting operations

Detailed SWOT Analysis of Volkswagen Group AG

The automobile industry is one of the world's largest industry in terms of revenue. Factors currently trending in this industry are automatic cars, Electric cars, Block Chain, 3D printing, and Self-driven cars. Accordingly the PESTLE / STEEPL / PEST analysis technique is employed to analyze all pertinent external factors that create a huge impact on the automobile industry and largely on Volkswagen's business model, growth trajectory, its business case, and market strategy. The PESTLE analysis helps to understand the influencers like political, economic, social, technological, legal and environmental that impact the business of a company.
Political factors have a high impact on the profits and growth of the automobile/ automotive industry. Political and legal factors like stringent laws on vehicles emission and fuel efficiency, high taxes on luxury cars, government support for eco-friendly vehicles, laws related to safety, vehicle regulations etc., are prominent aspects that govern the automobile industry.
The economic stability of a country highly influences the business of an automobile company; poor economic conditions directly dent the sale of luxury cars. However certain economic factors that are in favor of the industry are an increase in GDP, increase in disposable income, demand for the luxury lifestyle, cheaper rates of basic models, and easy EMI options. Today, automobiles are a boon and bane to the society that not only makes the frenetic lifestyle easier but causes environmental and noise pollution, affect health due to the emission of CO2, heavy traffic, and road accidents. These social factors are of conspicuous concern to the automobile industry. Technology is the driving force and one of the most important aspects on which the entire industry relies on. Cars equipped with the latest technology and low on emission and fuel consumption are not only in high demand but easily pass all government based legal issues. Technology is the core competency of Volkswagen, as the company is known for its intense focus on technological innovation. The new Car.Software unit that will step up software push with 'vw.os' operating system, is a significant technological stride by Volkswagen in 2019. Being a socially responsible brand Volkswagen has undertaken various initiatives like the development of CO2 neutral fuels, strategic partnership with suppliers to protect the environment, recycling, and launching the Mobia brand that delivers environmentally compatible mobility solution.
Find below the competitive analysis of the external environment for Volkswagen Group AG presented in a matrix followed by the detailed PESLTE / STEEPL / PEST analysis report:

Political	Economical
1. Trade policies of different countries 2. Russia-Ukraine war impact on automakers	1. Uncertainty in economic conditions 2. High inflation leading to wage hike
Social	Technological
1. Loss of trust and brand image 2. Global battery demand is mainly driven by e-mobility - Transitioning into the EV world	1. Increase in R&D investment 2. Helps growth of ancillary industries 3. Launch of digital push to drive manufacturing performance
Legal	Environmental
1. Potential ban on diesel cars 2. Strict laws to be followed in the region of operation 3. Financial and reputational impact from non-compliance of pollution norms 4. Environmentally sustainable economic activity under the Taxonomy Regulation	1. Effect on carbon footprint of a country 2. 100% green energy sourcing target with dedicated renewable energy support

Detailed Pestle Analysis of Volkswagen Group AG

• The SWOT and PESTLE analysis report offers a quick glimpse into the internal and external factors formerly in a matrix format, followed by a detailed analysis
• The SWOT analysis of Volkswagen highlights the company's prevalent internal Strengths and Weaknesses, external Opportunities and Threats.
• Understanding the role of technology and the company's core competencies in shaping Volkswagen's business and presenting the company with a competitive advantage over its competitors
• The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their impact on the automobile industry and specifically on Volkswagen Group.
• Renders holistic information about Volkswagen’s mergers and acquisitions, strategic partnerships and alliances, capital raising, market value, market segmentation, and equity transactions, consented with deal valuations and the synergies that were achieved with them.
• Penetrations into Volkswagen’s business diversification, extracting its key business segments and elaborate upon its business case study
• Cognizance of current trends of the automobile industry and its influences on the Volkswagen company
• A comprehensive company analysis to gain knowledge about company information, company profile, business model, business plans and marketing strategy
• Evaluation of Volkswagen’s USP or unique selling proposition, mission statement, and vision statement
• Synopsis of Volkswagen's business model, business case study along with a peek into the company’s key performance indicators, value proposition, and success factors.