VOLKSWAGEN MARKETING REPORT
BY JOHN KENNEDY
Volkswagen (abbreviated VW) is a German automobile manufacturer that was founded on the 28th of May 1937. The company was originally founded by the Nazi Trade Union known as the German Labour Front. At the time the majority of cars being manufactured in Germany were luxurious models that were very expensive. Adolf Hitler, the Chancellor of Germany, decided to sponsor the construction of a new state-owned factory that could produce a car that had a price similar to that of a small motorcycle. The factory was built in Wolfsburg in 1938 and the prototype of the first Volkswagen car was designed by Erwin Komenda. It was the original car to have the shape of what would be become the iconic Beetle. The intention was to get Germans to take part in a savings scheme to pay for these cars, 336,000 people saved enough to be eligible but unfortunately none of them ever received their car as their savings were stolen during World War 2 and only a handful of the cars were ever produced. Following World War 2 the factory came under British control and was used to produce 20,000 cars to be used as light transport for the British Army and the German post office. By 1946 the factory was producing 1000 cars a month and avoided being dismantled and moved to Britain as part of war reparations because British car manufacturers deemed the cars “quite unattractive to the average buyer”. In 1948 Volkswagen came under the control of West Germany and began to sell in other countries, by 1951 sales of the Volkswagen Beetle had reached 1 million units. Volkswagen sales continued to increase globally and in 1972 their Beetle make became the most-produced single car make in history. During the early 1970s Volkswagen saw a decline in sales so to combat this they began to produce new models. The first was the Passat in 1973 followed by the Sirocco in 1974 and the Golf in the same year. In the 1980s sales decreased in the United States and Japan dramatically due to the competitive pricing of other car manufacturers. Sales in the U.S. decreased from 293,595 in 1980 to 177,709 in 1984. In the 1990s Volkswagen brought out several new generations of older models which brought them an increase in sales in North America and Great Britain. However, once again, sales began to drop from 1998 to 2001 and in 2005 Volkswagen announced an operating loss of $1 billion in the US and Canada. Since 2005 Volkswagen has been reporting losses in the world’s largest auto market, the U.S., a new production facility was built in Tennessee, North America in 2011 to stop this trend. Currently Volkswagen is the only car manufacturer to have three of its vehicles on the list of top ten bestselling cars of all time and produced revenue worth €94.7 billion in 2011 with 5271776 units sold in that year. The company also owns other car manufacturers including Bentley, Bugatti, Lamborghini, Audi and Skoda. Volkswagen currently market themselves as a car manufacturer that targets numerous market segments by producing a vast range of models that can provide for the needs of many different customers as their title indicates they aim to produce ‘the people’s car’.
Micro and Macro Factors
Volkswagen has several competitors in the automobile industry. They have a range of products that span several different sectors of the automobile market. For example their Phaeton model competes with upper class models from Mercedes Benz and BMW while their Golf competes with models from Renault, Citroen and Fiat. However since several car companies are owned by Volkswagen they can orchestrate the companies target markets to avoid clashing with each other. They also have trouble with competitors when expanding into countries where they previously had little or no presence. In North America Volkswagen have recently built a new production facility and have been attempting to increase their...
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