Volkswagen SWOT Analysis 2022 ❤️

Volkswagen SWOT Analysis: This article presents a comprehensive SWOT analysis of Volkswagen. A SWOT Assessment of Volkswagen is focused on Strengths and Weaknesses, Opportunities and threats. 

Strengths and weaknesses are internal variables while threats and opportunities are external elements. SWOT Analysis provides a well-tested management technique that allows Volkswagen to evaluate its business performance against its peers and the industry.

Volkswagen is among the largest automobile manufacturers in the world. Volkswagen was founded in 1937. Audi, Bugatti, Skoda, Bentley, Lamborghini, and Porsche are part of the Volkswagen Group. 

volkswagen swot analysis

Volkswagen attempts to lure many customers through its vehicles. The line of products of Volkswagen comprises Hatchbacks as well as Crossovers/SUVs and Hybrid Vehicles.

Volkswagen is among the most renowned carmakers and in this piece we’ve looked at the performance of the business at Volkswagen. 

Volkswagen is known for its strategic acquisitions and has bought brands such as Audi, Bentley, Porsche, and more.

Company Background

Key Facts
Name Volkswagen Group (Volkswagen AG)
Founded May 28, 1937
Logo Volkswagen Group SWOT analysis logo
Industries served Automotive (cars, light trucks, heavy trucks, busses, motorcycles)
Maritime (engines, machinery)
Financial services
Geographic areas served Worldwide (117 countries)
Headquarters Wolfsburg, Lower Saxony, Germany
Current CEO Matthias Müller
Revenue (Euro) €213.292 billion (2015) 5.4% increase over €202.458 billion (2014)
Profit (Euro) €-1.582 billion (2015) a significant decrease over €10.847 billion (2014)
Employees 610,076 (2016)
Main Competitors Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford Motor Co., General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Toyota Motor Corporation, and many other automotive companies.

Company Overview

Volkswagen AG is one of the top automotive manufacturers, with a worldwide selling of over 11 million vehicles during FY2019 in the majority of the world’s population:

Europe, South and North America, Asia-Pacific, and many other markets. It is recognized for its high-quality vehicles and technologically advanced ones.

In addition to automotive, The company also offers financial services. These contribute EUR 40 billion and is up 15.89 percent of the group’s total revenue for FY2019. 

It covers business activities including customer and dealer financing direct bank and insurance, fleet management, and mobility. Let’s take a look at VW’s comprehensive SWOT Analysis.

Strengths In The SWOT Analysis Of Volkswagen

❤️ Well-structured umbrella brand as mentioned above one of the advantages for Volkswagen is its status as a well-structured Umbrella brand. The majority of people know that it makes supercars with high-engineered technology in addition to buses and passenger cars too. There are many options that are part of Volkswagen’s collection of Volkswagen However, the structure is smooth and effective with every strategic business unit accountable for its individual brand and performance.

❤️ The presence of HTML0 across the globe is extremely strong. The main strength of Volkswagen is the fact that it has a deep pocket, because of which it has been able to grow extremely quickly. Another advantage is that it is a company with a lot of power because it’s one of the longest-running automakers worldwide and has established itself in comparison to the such as Honda, Hyundai, Toyota, and others. The company’s strongest hold is in Germany where you can see the largest number of Volkswagen cars. In addition, Volkswagen has over 70 manufacturing plants and is located in more than 150 countries around the world.

❤️ Great name recognition Excellent brand recognition Volkswagen is a firm that manufactures 26,600 motor vehicles on any particular day. Naturally, you can’t manufacture this many vehicles if there isn’t any market. There is no demand for the Volkswagen brand is extremely well-known in Europe and the USA and is growing stronger all over the globe. In 2016, the brand is ranked as the 57th most prestigious brand globally. However, this is a significant drop from the year before which saw it ranked 18th. However, the decline is evident due to the emission scandal. The brand’s valuation is 19 billion dollars.

❤️ Operational activities are effectively managed. It is said that there are entire towns that depend on employment from Volkswagen Germany. The company is massive in terms of operation. The management of nearly 27000 vehicles every day, along with the logistics of logistics, chains, and various processes isn’t an easy task. Therefore, it is described as the operation management of Volkswagen is very good. Accenture is the consulting company of Volkswagen and is responsible for all its hardware and software needs. In addition to Accenture Volkswagen works with a variety of partners in the areas of the supply chain, accounting, and other areas.

Research and Development Research and Development Volkswagen automobiles are known for having advanced technology built-in and are dependable for their efficiency. Volkswagen has recently branched out in the field of hybrid vehicles and motorcycles. are also being added to the lineup. Apart from that the R&D department of the subbrands gives them the best products.

❤️ Top in gross revenue As is evident from the graph below Volkswagen is the most significant contributor to gross income in the US in comparison to other leading brands around the globe. Volkswagen is also the topmost gross revenue contributor in Germany as well as European nations.

Weaknesses In The SWOT Analysis Of Volkswagen

❤️ The emissions scandal A major time-spread scandal that affected the primary umbrella brand in a major way. Nearly 5 million vehicles have been returned to business as a practice that can be detrimental to the best brand. The trust was damaged especially since the decision to install the wrong software was made by the top management of the business. So, what else were they doing?

❤️ Margins are being eroded by competition Margins are being squeezed away Another issue with Volkswagen is that it that is affecting all the major automobile makers. There are many competing brands that are gaining traction in market markets as well. The price rivalry is a major issue. In the end, this competition benefits the consumers however it is affecting the brand negatively. In India for instance the company had to reduce its prices significantly to gain acceptance. This led to the margins of many brands being reduced because of the competition.

❤️ Poor position in India The weak positioning in India Since I’m from India and am from India, I can tell you that the brand branding of Volkswagen is very weak. Maruti as well as Hyundai have great total sales figures and Volkswagen is unable to be competitive with Maruti.

❤️ The brand of the parent can be strengthened by Volkswagen investing a lot of advertising dollars to create an image for Audi, Bentley, Porsche, and many other brands. Yet, in order to attract the people, Volkswagen itself needs to make investments to build more brand recognition for its parent company which is Volkswagen. There are a few hand-picked automobiles like Passat or Beetle that are popular within the Volkswagen brand. However, the brand doesn’t generate much buzz for these cars which is the expectation for the marketplace.

Opportunities In The SWOT Analysis Of Volkswagen

❤️ The purchasing power is rising The purchasing power of HTML0 is increasing The primary advantage that Volkswagen offers, which is very similar to other brands of cars are that the purchase of Automobiles is increasing each year. The cars that were considered expensive in the past, are now considered to be necessities because of the numerous programs offered through Automobile companies in addition to the loans and financing choices available to consumers. In the end, the market is filled with opportunities for consumers to choose.

❤️ Expanding worldwide is possible – Demand for the product will only increase due to the growth of the GDP and the growing demand for the item. There are increasing numbers of nations that could be classified as emerging. The more Volkswagen attempts to tap into these Emerging countries, the greater global expansion is possible for the company. Keep in mind, that Volkswagen also needs to adapt to the localization of its products and adapt the products to meet local needs.

❤️ Enhancing Fuel Efficiency – Since the brand has suffered a major blow due to the emissions scandal and the resulting emissions scandal, it is crucial to come back strong and have the ability to design some truly good and energy-efficient items.

❤️ Modern and unique designs Design is always the main draw when it comes to cars. Therefore, every brand releases new designs every quarter, in order to keep the brand fresh and attract more customers to the brand.

❤️ Hybrid cars/Fuel-efficient vehicles Auto driving vehicles – These three types of vehicles are likely to be the future of automobiles and the ones that design the most efficient cars at the right time will dominate the market. Tesla has already put an enormous dent in Auto driving vehicles and, the same is true for Volkswagen to start slowly taking steps in that direction. In the near future, as the price of fuel increases government and consumers consider renewable sources of energy. In the future, hybrid vehicles will play a significant part.

Threats In The SWOT Analysis Of Volkswagen.

❤️ The reputation of the brand has been severely damaged The reputation of the brand has been badly damaged one of the main dangers to Volkswagen is the harm to its brand reputation because of the emissions scandals. More than 5 million vehicles were required to recall, that included Audi Volkswagen, SEAT, and several other brands. After people had to return their vehicles, they weren’t confident about receiving a new Volkswagen vehicle again. Volkswagen will need to invest an enormous amount of money in branding to rebuild its strength as a brand.

❤️ The level of competition is constantly increasing The competition is ever increasing. It is not likely to stop anytime soon and is constantly growing. There will be no easing in this regard.

❤️ Different regulations of the government in different countries Every government wants to ensure the protection and development of the local automakers in addition to international automobile makers. They would like to keep their profits in the country, due to the fact that many countries have policies that favor local car makers. If the policy of the government changes, it impacts International automobile manufacturers since changes need to be made to style to conform to the policy.

❤️ Innovative technology is being implemented across the world – Tesla has introduced hybrid vehicles and has launched a number of them. They have also introduced auto-driving vehicles that are much more efficient than their competitors. Other brands such as General Motors, Toyota, and others are also having a strong R&D department in place. Innovation is able to be found in any business. Volkswagen must be aware of this and have an outstanding R&D team to ensure that it can invent and come up with new ideas to meet the needs.

❤️ Emissions issues The changing laws on emissions can be harmful to Volkswagen since every time the laws change, they are likely to be re-introduced into the limelight. Experience has taught us that Volkswagen will do illegal things instead of complying with the laws of the emission standard. Therefore, it won’t be backed by authorities in the near future, and it will have to be scrutinized closely. This will also increase the cost of Volkswagen when it decides to make its engines conform to the latest emission standards.

Limitations of SWOT Analysis for Volkswagen

While it is true that the SWOT analysis is extensively used as a tool for strategic planning, However, the analysis has some limitations.

  • Certain abilities or aspects of an organization could be both a strength as well as a weakness at the same time. This is among the main drawbacks that SWOT analysis has. Changes in environmental regulations can be an opportunity and a threat to the company. However, however it could also be an opportunity in the sense that it allows the company to compete on the same level or even gain an advantage over competitors when it is could develop its product quicker than competitors.
  • SWOT is not a method of determining how to gain competitive advantages and therefore it shouldn’t be a complete solution.
  • The matrix serves as an initial point of reference for an analysis of how the suggested strategies can be implemented. It offered an evaluation window, but not an implementation plan based on its strategic competitiveness. Volkswagen
  • The SWOT model is a static evaluation that analyzes the current conditions with only a few potential modifications. When circumstances, capabilities threats, strategies, and circumstances evolve, the dynamics of a competitive setting will not be apparent in one single matrix.
  • SWOT analysis can cause a company to focus too much on the importance of a single external or internal element in formulating strategies. There are interrelations between the important external and internal elements that SWOT doesn’t reveal, which can be vital in formulating strategies.

Weighted SWOT Analysis of Volkswagen

Due to the previously stated weaknesses of the SWOT analysis/ matrix, the corporate management determined to give the weightage to every internal strength and weakness of the business. They also consider the likeliness of events happening in the near future and what the effect will be on the company’s performance.

This technique is known as the Weighted SWOT Analysis. It’s superior to basic SWOT analysis as the weighted SWOT analysis Volkswagen managers can concentrate on the most important elements and ignore the less crucial ones. It also eliminates the problem of the long list, which causes organizations to make an extensive list, but none of the elements are considered to be crucial.

Sources

  1. Volkswagen Group (2016). Annual Report 2015. Available at: http://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2016/04/Y_2015_e.bin.html/binarystorageitem/file/Y_2015_e.pdf Accessed December 10th, 2016
  2. Volkswagen Group (2016). News. Available at: http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2016/06/2025.html Accessed December 10th, 2016
  3. Our Windsor (2016). Stats reveal which automakers are among the worst offenders in recall-land. Available at: http://www.ourwindsor.ca/community-story/6951147-stats-show-which-automakers-are-the-worst-offenders-in-recall-land/ Accessed December 10th, 2016
  4. CB Insights (2016). 33 Corporations Working On Autonomous Vehicles. Available at: https://www.cbinsights.com/blog/autonomous-driverless-vehicles-corporations-list/ Accessed December 10th, 2016
  5. Jurevicius, O. (2016). Ford SWOT analysis 2016. Available at: https://strategicmanagementinsight.com/swot-analyses/ford-swot-analysis/ Accessed December 10th, 2016

FAQ Volkswagen SWOT Analysis

Who is Volkswagen’s biggest competitor?

Top Volkswagen Competitors in the world
  • Toyota.
  • General Motors.
  • Ford.
  • Renault Nissan.
  • Hyundai.
  • Daimler.
  • BMW.
  • Chevrolet.

What is Volkswagen’s advantage?

One of the major factors that allow Volkswagen to enjoy an edge in the marketplace is the large variety of product ranges. The extensive product range helps keep up with demand and sales throughout difficult times. The company also has the ability to attract customers from a variety of industries and backgrounds.

What brands are under VW?

The Volkswagen Group is comprised of 10 brands that are based in five European countries: Volkswagen, Volkswagen Commercial Vehicles, SKODA, SEAT, CUPRA, Audi, Lamborghini, Bentley, Porsche, and Ducati. Additionally, Volkswagen Group offers a wide selection of other businesses and brands, that include financial services.

What makes Volkswagen different?

The company offers many products that are geared toward the needs of customers. the assortment that caters to different categories of customers with various desires and needs. Apart from Volkswagen passenger cars as well as commercial vehicles that fall under the MAN brand It also provides cars that are under those of the Skoda, Audi, SEAT, and Porsche brands.

What are Volkswagen brand values?

Volkswagen’s core values are ” accountability, teamwork, servant’s attitude, and integrity.” The popularity of the company proves that it consistently serves and meets the requirements of its clients in all aspects.

Who is Volkswagen’s target market?

Volkswagen has a broad market segment that covers the middle classes, upper-middle-class, and upper class. The top brands within the group are targeted towards the top section of society by offering their luxury cars such as Audi, Lamborghini, and Buggati.

Volkswagen SWOT Analysis: Conclusion

Through the analysis, we discern that the transition between the internal combustion engines and humans to driverless electric vehicles is the best decision for Volkswagen to take.

The company needs to show the leadership and management skills required for this change while maintaining its leadership in the conventional car manufacturing industry.

If the company is successful in making this change, Volkswagen can continue its remarkable presence in the auto industry. 

If not, Volkswagen’s legacy will disappear into the auto’s history books which is also evident within our PESTLE study on Volkswagen.

Did you enjoy you enjoyed this SWOT analysis? Make sure to look at other examples of SWOT analysis on our website. 

If you’d like to conduct an analysis of SWOT by yourself we have an introduction to SWOT analysis as well as the examples of SWOT analyses very useful.

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