Vw Swot Analysis

Topics: Audi, Automotive industry, Automobile Pages: 8 (2396 words) Published: May 1, 2010
Strengths
Leading regional player
Strengths Weaknesses
Leading regional player
Strong brand portfolio
Global production network
Weak performance in the US
Declining market share in China
Weaker margins
Opportunities Threats
New models
Increasing demand for hybrid electric vehicles
Booming car sales in China
Raw material prices
Economic slowdown in Europe and the US
End of life vehicle directive
Intense competition
Volkswagen is the market leader in the western European passenger car market. In this region, the company’s market share stood at 19.9% in 2006, well above PSA’s 13.3% and Ford’s 10.8%. Volkswagen is the market leader in Germany with a market share of 30.8% in 2006. During the same period, the company had strong market positions in the UK (market share 14.8%), Spain (21.8%), Italy (11.1%), France (11%), Portugal (16.8%), and Switzerland (19.9%). Volkswagen has also leading market position in Brazil (24%), Argentina (27.1%) and South Africa (22%). Volkswagen has also built strong market positions in other parts of the world with a market position of 9.7% all over the world. Leading market position enhances the brand image of the company and improves the investor confidence.

Strong brand portfolio
Volkswagen has a strong brand portfolio. The company’s brand portfolio includes a good mix of luxury cars and family cars. Its leading brands include Audi, SEAT, Lamborghini, Volkswagen, Skoda, Bentley and Bugatti. The Volkswagen family of brands includes such strong brands such as Beetle, Golf and Passat. The luxury car brands of the company include Audi, Lamborghini, Bentley and Bugatti. Volkswagen’s Strengths Weaknesses

Leading regional player
Strong brand portfolio
Global production network
Weak performance in the US
Declining market share in China
Weaker margins
Opportunities Threats
New models
Increasing demand for hybrid electric vehicles
Booming car sales in China
Raw material prices
Economic slowdown in Europe and the US
End of life vehicle directive
Intense competition
Volkswagen AG BC7E1CA4-BD1F-4180-B98F-436FFDE0A2A5
© Datamonitor (Published Jun 2007) Page 20
This profile is a licensed product and is not to be photocopied Volkswagen AG
SWOT Analysis
SEAT brand of family cars is popular in Spain, while Skoda brand of value-for-money cars are popular in the Czech Republic. Strong brand portfolio leads to stable revenues and provides the company with the strategic flexibility of introducing established brands in new markets.

Global production network
Volkswagen has a global production network of 32 vehicle production bases across the globe. The leading production center for the company is Europe, with 22 vehicle production plants, followed by South America (5), Asia (3), North America (1) and South Africa (1). The company’s global production network is flexible, with several plants capable of producing models from several group’s brands. The Bratislava plant in Slovakia produces both Audi Q7 model and Touareg model. Now as many as five plants from the group’s network have the capability to produce the Polo model. Global production network besides reducing costs, allows the company to adjust to market trends and demand fluctuations.

Weaknesses
Weak performance in the US
Volkswagen has failed to make much headway in the US despite operating in the market for decades. The total market volume for new passenger car market in the US stood at around 16.5 million units in 2006. The company’s market share in the US light vehicles and passenger car market was about 1.4% in 2006, as compared 53.7% of the Big Three (GM - 24.3%, Ford - 16.4%, and Chrysler group - 12.9%). The Japanese car makers are witnessing high growth in the US with a cumulative market share of 34.8% (Toyota - 15.4%, Nissan- 6.2%, Honda - 9.1%). Volkswagen has failed to expand its market share in the US owing to limited product range and quality problems. In the US, the company largely operates in the Sedan...
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