Volkswagen Group AG SWOT & PESTLE Analysis

Strength

1. Widest product portfolio among all automobile companies: Volkswagen Group has 12 global brands under its command. The company sells passenger cars under Lamborghini, Bentley, Porsche, Bugatti, Audi, Seat, Skoda and Volkswagen brands. The commercial vehicles i.e. bus and heavy trucks are sold under Man, Scania and Volkswagen Commercial Vehicle brands. The motorcycles are sold under Ducati brand. With these 12 brands, Volkswagen Group offers the widest product portfolio to its customers globally. The world’s largest automobile manufacturer Toyota offers its products under only 4 brands. The third largest manufacturer General Motors offers its cars under 10 different brands.

2. Strong global reach and presence: Volkswagen Group on account of such wide product portfolio and with its huge cash reserves has the ability to expand very fast when compared to its competitors. As one of the oldest and largest automobile manufacturer, the German company commands a lot of influence over the globe over other automobile manufacturers like Toyota, Honda, General Motors, etc. with its superior technology giving much better quality of cars than other car companies. Volkswagen cars carry the trust factor of “German Engineering” under its hood which is enough for the peace in the mind of its customers. The company has operations in around 150 countries with 100 manufacturing plants spread across 27 countries.

3. Futuristic program - “Together – 2025 Strategy”: In the wake of the diesel emission scandal and the brand “Volkswagen” getting tarnished, the company introduced a new futuristic strategic plan that would focus on delivering key objectives by 2025. Under this strategy, the company envisages to introduce 30 electric cars by 2025. Volkswagen calls this strategy as the ‘major company electrification’. Before this strategy, the company never invested in research and development to develop next-generation electric cars. As a part of this strategy, the company will do research and development to achieve competence in battery technology, digitalization and self-driven cars. The company will increase research and development spending to increase company’s efficiency and profitability. The new strategy will focus on company’s endeavours on developing next-generation technologies which will put the company leaps ahead of their competitors.

The remaining section under "Strength" is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

This section is available only in the 'Complete Report' on purchase.

Economic

1. Favourable operating conditions for automobile companies: Automobile industry being a crucial industry in important for a country’s GDP. It contributes directly to the income of the country. Due to huge size of its scale of operations, Volkswagen directly impacts the GDP of the country in which it operates. Developing countries help in development of manufacturing companies as they provide huge employment opportunities. These companies also affect other industries such as steel, glass, ancillary industries and provide direct or indirect employment opportunities.

2. Uncertainty in economic conditions: Economic conditions in the country directly affect the revenues of the company. Low economic conditions in the country will hamper sales bringing the revenues down whereas better economic conditions will drive sales benefitting the company. For e.g. European debt crisis is big problem for automobile manufacturing companies as the market conditions will not allow people to buy new cars. To deal with these conditions Volkswagen has widest product portfolio and can offer cars in every segment there is. High fuel prices also affect the revenues of a automobile manufacturing company.

3. Uplifts economic conditions of a region: A region in which a manufacturing plant is set up benefits the whole region in form of direct or indirect employment. It provides direct employment to labours and indirect employment in the form of ancillary industries being set up around the plant. This way Volkswagen when sets a manufacturing plant in a particular location, it helps other industries as well like transportation, small entrepreneurs who set up support functions to be supplied to the manufacturing plant.

4. Banking and Financial services of a specific region: Banking and financial services of a country play an important role in the operations of a company like Volkswagen. They provide vehicle loans at favourable or unfavourable rates which ultimately impacts the sales of an automobile company. However, these rates are decided based on the political scenario of the country. Emerging countries like India are keen on attracting huge investments made by these companies and hence keep loan and interest rates favourable. Hence, political scenario plays a very crucial role on the operations of a company.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.