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
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.
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. US threat tax European auto imports
| 1. Favourable operating conditions for automobile companies
2. Uncertainty in economic conditions
3. Uplifts economic conditions of a region
4. Banking and Financial services of a specific region
|
Social | Technological |
1. Loss of trust and brand image
2. Provides employment opportunities
| 1. Skill development in the country
2. Increase in R&D investment
3. Helps growth of ancillary industries
|
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
| 1. Effect on carbon footprint of a country |
On purchase the Volkswagen Group AG SWOT & PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 1 hour might be caused.
Detailed Pestle Analysis of Volkswagen Group AG
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.
On purchase the Volkswagen Group AG SWOT & PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 1 hour might be caused.
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.



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References used in Volkswagen Group AG SWOT & PESTLE 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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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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