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Volkswagen Group AG SWOT & PESTLE Analysis

ID : 52389653| Apr 2018

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.

Its mission statement states “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 Group AG Revenue :

€230.682 billion – FY ending 2017

Competitive Analysis of Volkswagen Group AG

SWOT
PESTLE
The SWOT analysis for Volkswagen Group AG is presented below:
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
SWOT & PESTLE (combined)
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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.

4. Brand Image: For any global brand, as the likes of “Volkswagen” its brand image is one of its core strengths as Volkswagen stands out among the automobile manufacturers of the world. Often though, it is associated with the ultra-premium and luxurious automobile brands like Audi, Bentley, Lamborghini, Porsche, Skoda, etc the company also manufactures passenger cars for the lower end market. This was the only reason the brand could sustain the shock it received in 2015 with the diesel emission scandal. Due to its brand image the company recovered quickly from the shock showing increased sales revenue in 2016 itself and proving that the brand “Volkswagen” still remains in the eyes of the public. In 2017, Volkswagen received the “Most Innovative Volume Brand” award from the Center Automotive Management. The company also received two further awards in the most innovative brand categories “Interface Connectivity” and “Autonomous Driving and Safety”.

5. Restructuring and increased sales revenue: Even after getting the brutal shock in 2015, and a slump in sales figures, the company bounced back very quickly showing improved sales figure of 10.3 million units in 2016 and 10.7 million units in 2017 from 10,010 units in 2015. This improved the sales revenue of the company and it generated sales revenue of€230.682 billion in 2017 from the €217.267billion sales revenue in 2016.Under CEO Matthias Müller’s tenure the group surpassed Toyota to become the world’s largest car manufacturer by sales. He also decided to spend €34 billion on electric and self-driven cars following backlash of the diesel emission scandal and as catalyst for big changes in the organisation. This shows the faith and trust of the public in the brand “Volkswagen”.

Weakness

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Opportunity

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Threat

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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Volkswagen Group AG Analysis Report

1. http://annualreport2017.volkswagenag.com/additional-information/five-year-overview.html

2. https://www.statista.com/statistics/275870/revenue-of-volkswagen-group-by-brand/

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/

5. https://www.ibef.org/industry/india-automobiles.aspx

6. https://www.livemint.com/Industry/GxHRkUa6yJCAt2fIgT4TRI/Volkswagen-targets-3-share-in-Indian-passenger-vehicle-mark.html

7. https://www.reuters.com/article/us-usa-trump-germany-autos/trump-threatens-german-carmakers-with-35-percent-u-s-import-tariff-idUSKBN1500VJ

8. https://www.volkswagenag.com/en/group/portrait-and-production-plants.html

9. http://www.euronews.com/2018/02/24/in-shift-germany-now-eyes-limited-bans-on-diesel-cars-report

Copyrights and Disclaimer

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

Copyright of Volkswagen Group AG SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Volkswagen Group AG SWOT & PESTLE Analysis
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