Strengths: Volkswagen’s brand portfolio is among the most diverse in the automotive industry, and includes brands like Audi, Bentley Bugatti Lamborghini Porsche SEAT Skoda. Volkswagen sells more than 10 million vehicles annually. The company can diversify its markets into the entire automobile industry. Scania, for example, is a major player in the truck and bus industry. Having diversified has helped them become one the largest firms on the planet. Volkswagen has a synergy that appeals to both the luxury and family car markets, making a wide range of target customers.
VW is present in every corner of the globe. It has 70 production sites in 150 different countries, and employs 350,000 people worldwide. VW’s dominance of the Chinese market would secure their place as the leader in the automotive industry. VW is also very popular. To meet the current global demand, 26600 new cars are produced every day. Even after 2016’s emissions scandal, Volkswagen is still the 57th-highest ranked brand worldwide. VW (was ranked 18th last year) is helped by its well-managed operations, good supply chains and connections with 100s VW Dealerships in the UK. Volkswagen’s gross sales in Germany and America are higher than those of any other VW brands. VW, by investing in research and development and reinvesting the profits back into it, has been able produce hybrids as well as electric vehicles with high performance. VW’s Golf GTE model is among the latest models. VW can increase its market share by offering a low-emissions electric car.
VW is an old manufacturer of cars, allowing it to reach a larger audience. VW will become more appealing to people when it comes time to buy a car. For many car sales, companies can rely upon word-of mouth. VW has to have a good reputation because it’s so established. Audi, the VW Group’s best performing brand, has an estimated $7 billion worth.
Volkswagens weaknesses were exposed by the recent scandal over the emissions. The negative media coverage of the scandal affected the brand umbrella in a big way, as close to 5,000,000 cars were returned. The reputation of the brand has been damaged, which was built over years of excellent service. VW will suffer a huge loss in customer loyalty. Trust was also broken, as the top management made the decision to install the incorrect software. The damage has been paid for and the company can rebuild the trust. In addition, statistics show that car sales were not very effective. This suggests that consumers are not concerned about emissions. This car company has the highest recall rates in the United States compared to any other manufacturer. It is likely that there were issues in the past with manufacturing and quality control. VW’s lack of popularity in the US is due to a simple mistake that was easily rectified but proved costly over time.
Volkswagens are also facing a problem with the competition eating into their margins. Many brands are entering the market, and there is a fierce price war. This competition benefits the customer but hurts the brand. For instance, to get accepted in India, the company had to significantly lower their prices. In the end, margins have been lost because of competition. Volkswagen’s Indian brand positioning is weak. Maruti is the best-selling car in India, followed by Hyundai. Volkswagen can’t compete with Maruti. Volkswagen invests heavily in advertising dollars to help build brands for Audi Bentley Porsche. Volkswagen has to spend money to boost the value of the Volkswagen parent brand. Volkswagen has some cars that are very popular, like the Passat and Beetle. These models are not well-known, but the brand isn’t making enough noise to attract the attention of the market. Such cars’ popularity would be greatly boosted by a new model. Most of VW’s high-performance cars, such as Bugatti and Lamborghini, are not environmentally friendly.
Volkswagen is currently a small player in this market. There is an opportunity for Volkswagen to invest heavily into electric car research and develop to boost their presence in the market. The autonomous car industry is another opportunity for investment, in addition to the electric car. Volkswagen is the only car company that has explored this market. As there are few and very limited fully-autonomous cars available, the market is not well-known. Volkswagen is a brand that has the potential to make driverless vehicles affordable.
Volkswagen has the chance to improve its sustainability policies and restore the damaged reputation of the brand. This will help to restore the confidence that the public had once in the brand. In addition, the purchasing power of consumers is increasing globally. Cars are no longer viewed as luxury items but rather necessities. This is increasing the demand for vehicles. Volkswagen offers a range of options, including financing and payment by overtime.
Volkswagen has had its reputation severely damaged by the emissions scandal. Audi, Volkswagen and SEAT cars were included in the recall of more than 5,000,000 vehicles. Once they had to return the cars, many people did not feel confident that they would ever receive another Volkswagen. Volkswagen must invest heavily in brand building if it wants to keep its brand power. If not, VW sales may decline. Volkswagen is constantly competing with traditional automakers as well as the newcomers and saturated markets.
Volkswagen’s electric car segment will be very difficult to compete against new companies like Tesla. Google, a company that is trying to develop self-driving automobiles, is another competitor. This is exacerbated by the fact that global auto production capacity is far in excess of demand. In 2015, for example, there were 31 million extra units. The competition is increasing and will not slow down anytime soon. This front will not be relaxed. Government regulations vary from country to country. Most governments support their domestic car makers over those of other countries. Most governments would prefer to keep profits in their own country. As a result, they will support the car manufacturers of their own countries. Due to this, car manufacturers from around the world may need to adapt their policy. You may need to reduce your prices to compete if you face a high import tariff.
Tesla isn’t alone in launching hybrid cars. They also introduced auto-driving cars faster than their competitors. Innovation is possible from any company. Volkswagen must understand this and have a strong R&D department to respond. Volkswagen’s emissions will be affected by any changes to emission laws. Volkswagen has a history of breaking laws and not following emission standards. Hence, the government will not support this company in future. Volkswagen will then have to increase its costs to ensure that their engines meet the most recent Emissions standards.
There will be additional fines or damages to pay. Volkswagen’s emission-related scandal has already damaged the company’s reputation, caused consumer dissatisfaction and resulted in 16.2 billion of damages and fines. It’s not over yet. Volkswagen faces many lawsuits in different countries that are aimed at convicting it for falsifying emission data. The company has to pay billions extra in fines or damages. Profits will be affected for several years. The government will increase regulation. Exchange rate fluctuation is a concern.