The Volkswagen Group : A study

Résumé du document

As the largest automobile manufacturer in Europe and 5th in the whole world, the Volkswagen Group focuses on the automotive market and offers products and services along with an entire automotive value chain. With nine independent brands, the Group provides a unique range of models from the extremely efficient 3-litre car to the great sporting tradition of Bentley. Indeed, the group follows a multi-brand policy.

While each of the brands has a distinct identity, it also benefits from the brand name of the Volkswagen Group with its global manufacturing base of 45 plants worldwide, and its international sales and marketing strength. As a global player, Volkswagen has presence in all significant markets across the world. In terms of market share in Western Europe, almost one car out of five comes from the Volkswagen Group.

The Volkswagen Group is also becoming a mobility provider, and its broad spectrum of services includes financing and leasing business through its Financial Services Division. It also runs one of the leading information technology consultancy in Germany.

Although the entry of new players in the market is less, there is a fierce competition in the sector. Huge investment in technology and R&D activities, efficient human resource strategy, long-lasting partnerships with suppliers and extensive environmental management are the challenges of most competitors in the market.

The Volkswagen Group thus chose to expand their foot print in every segment of the market. As the group possesses a global manufacturing base, this strategy enables them to benefit from economy of scales. Yet this policy is very risky. Though the group takes maximum effort to give each car a distinct identity and position, the different brands may become competitors.

History:

The "Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH" was founded on 28 May 1937, and is renamed "Volkswagenwerk GmbH" on 16 September 1938. This firm was affected by the Second World War. After the end of the Second World War, responsibility for what remained of the Volkswagen Company and its facilities were transferred to the British Military Government in mid-June 1945. Within two years, the Dutch importer Pon's Automobile handled the first commercial export of Volkswagen. Founded in June 1949, "Volkswagen-Finanzierungs-Gesellschaft mbH" as aimed at expanding sales in the domestic market.

Series production of the Type 2 started in 1950 and it extended the product range. The Volkswagen Transporter or Volkswagen Bus enjoys a fast growing popularity, thanks to its multifunctionality. The first step in the process of internationalizing the company's operations is taken on 11 September 1952 with the establishment of "Volkswagen Canada Ltd." in Toronto.

After the successful sales of Volkswagen in the US market, the company founded "Volkswagen of America, Inc" in 1955. In order to make sure a strong hold on the South African market, Volkswagenwerk GmbH acquired a minority stake in the general importer "South African Motor Assemblers and Distributors Ltd." (SAMAD) on 8 June 1956. SAMAD renamed as "Volkswagen of South Africa (Pty) Ltd." in January 1966.

By acquiring Selbstfahrer-Union, the largest car rental agency in Germany, the Volkswagen Group reinforces its commitment to an upcoming business in March 1970. The subsidiary, renamed "interRent Autovermietung GmbH", was merged in 1988 with Europcar to form "Europcar International S.A.".

Extraits

[...] [1998]: VW's rapid rebound stuns rivals, New York Times (06/18/1998) Bolli, Agathe [2000]: environmental communication and competitiveness, a case study of the car industry, the international institute for industrial environmental economics at Lund University Edstroem, Anders [2000]: personal communication, Volkswagen Research and Development, Motor Engineering, Wolfsburg Verkehrsclub Deutschland (VCD) [1999]: Auto-Umweltliste 1999/2000des VCD Volkswagen AG, Annual report 2001/2002 Volkswagen, Renault, PSA, Ford, Fiat, Japanese Buyers Consumers are even more demanding and tend to be less loyal toward a specific brand Suppliers They are numerous New entrants There are only few entrants as it is an old industry which requires important investments in technology Substitute Products: Train, Bicycle, Plane and other means transportation Limited bargaining power Limited bargaining power but tends to increase Few Threats Entrance Barriers: They are very high: costs, distribution network, and technology Threat depends on how customers use their car Product Line Diversification Renault PSA VW Italians Rolls Royce Jaguar Huyndai Mazda Nissan Toyota General Motors Volvo 1 Ford Honda BMW Mercedes Special prod. Mass prod. / Limited Mass prod. [...]

[...] We can see a certain number of similarities in the whole automotive industry. But regarding some aspects they are different. arbitration between or In 1993, many manufacturers were in a critical, value-destroying zone with a market-to book ratio of less than one. Since then, however, individual players have succeeded in moving into the value-creation zones and thus towards higher market capitalization using one of two distinct strategies. The successful "value players" win through a strong brand premium and superior customer intimacy; the successful "volume players" have left for scale-driven cost leadership. [...]

[...] More generally all the business units are located on attractive sectors. The Volkswagen Group's activities are focussed on its Automotive and Financial Services divisions. Consequently, the Group offers a broad range of services in addition to the sale of automobiles, all along the value adding chain through its customers. The close cooperation and utilization of synergies among the individual Group brands almost one in three Europcar fleet vehicles was a Group vehicle was demonstrated clearly by the integration of Europcar into the after-sales service package for the Phaeton. III. [...]

[...] - Human resources: Volkswagen develops an internal mobility in order to develop intellectual and geographical mobility. The group provides training for the employees in various fields like, computer, management, and languages. - Environment: Volkswagen considers a dynamic environmental policy, which allows the firm to offer more environmental friendly products. Indeed, the company was co-organizer of the Earth summit in Rio de Janeiro and its factory in Emdem was the first one to obtain the norm ISO. II Volkswagen's Mission and knowledge The main activity of the group Volkswagen is to build and market cars, thanks to a sizeable range of cars they're doing what they intended. [...]

[...] So the companies always try to offer attractive “packages” (which means cars are sold with many accessories). As buyers' decision often depends on the price of the car, the price competition (jncludes discounts as well) among the companies is quiet extreme Substitute products The only alternative to car is public transportation. Though it is quite efficient in Western Europe, it doesn't have an impact on company's sales The ‘sixth' force The European car market is being subject to many regulations of European Union. [...]