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Volkswagen Group AG SWOT & PESTLE Analysis

ID : 52389653| Sep 2020| 15 pages

COMPANY PROFILE -Volkswagen Group AG

Business Sector :Automobile

Operating Geography :Germany, Europe

About Volkswagen Group AG :

Volkswagen Group AG, a German multinational automobile manufacturing company headquartered in Wolfsburg, Germany is one of the world’s leading manufacturers of passenger and commercial vehicles and is the largest car manufacturer across Europe. It carries out designing, development, production and sale of a wide range of vehicles and engines. The company sells its vehicles under various brand names like Bentley, Audi, Ducati, Volkswagen, Bugatti, Lamborghini, Skoda, SEAT, etc. It also provides financial services which include banking, insurance, customer financing, and leasing and fleet management services. The company is divided into two divisions i.e. The Automotive Division and Financial Services Division and has approximately 342 subsidiary companies. The company has operations in around 150 countries with 100 manufacturing plants spread across 27 countries as of 2018. The company has operations in the Asia Pacific, Europe, South Africa and North America and South America.
Volkswagen’s mission statement states that “The Group's goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class." Volkswagen’s Vision statement reads "Shaping mobility - for generations to come.”
Volkswagen’s USP or Unique Selling Proposition lies in being one of the world’s largest automaker company holding the largest market share in Europe for over 2 decades. However, 2019 seems to be unfavorable for the company, Volkswagen lost its number 1 position to Toyota and ranked as world’s 2nd largest automaker in 2019.

Volkswagen Group AG Revenue :


€235.849 billion FY ending 31st Dec 2018 (y-o-y growth of +2.7%)
€229.550 billion FY ending 31st Dec 2017

Competitive Analysis of Volkswagen Group AG

SWOT
PESTLE
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 10.8 billion cars in 2018. 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 Group AG is presented below in a SWOT Matrix followed by the 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. Brand image
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
1. Intense competition amongst automobile companies
2. Fluctuations in the economies of markets
3. Increase in import tariffs by US
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Detailed SWOT Analysis of Volkswagen Group AG

 

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.

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Check Out Analysis of Other Relevant Companies

WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?

• 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.
References used in Volkswagen Group AG Analysis Report

1. Annual Report 2018- https://www.vodafone.com/content/annualreport/annual_report18/index.html

2. Investor Relations- https://www.volkswagenag.com/en/InvestorRelations.html

3. https://www.volkswagenag.com/en/group/strategy.html

4. https://www.ourwindsor.ca/community-story/6951147-stats-show-which-automakers-are-the-worst-offenders-in-recall-land/

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SWOT & PESTLE.com (2020). Volkswagen Group AG SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/volkswagen-group-ag/ [Accessed 29 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Volkswagen Group AG SWOT and PESTLE analysis has been conducted by Dhruv Sakkai and reviewed by senior analysts from Barakaat Consulting.

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