Volkswagen SWOT analysis: A Comprehensive report


Company Snapshot:

The Volkswagen Group with its headquarters in Wolfsburg is one of the world’s leading automobile manufacturers and the largest carmaker in Europe and Asia Pacific. The Group offers twelve winning brands. WV sold 6 million vehicle units for the year 2016 across the globe.

Incorporation Year: 1937 Company is Headquartered in Wolfsburg Germany.

CEO: Matthias Müller


Sales: 240 Billion USD

Brands of Volkswagen:
  • Volkswagen
  • Audi
  • Seat
  • MAN
  • Volkswagen Financial Services


Major Brand Contributors:

Audi – 1.9 Million Units sold in 2016.

Skoda – 1 Million plus Units sold in 2016.




Geographical Coverage: With Operations across the world WV has 120 production facilities 5 in North America, 9 in South America Region, 71 in Europe, 4 in Africa and 31 in Asia. With production units across the global its delivery and cost controls add as a distinctive advantage in premium segment.


Audi: Volkswagen Group's cash cow, Audi which accounts for around 27% of total sales with Sales Units of 1500 plus. This Brand of VW is only next to Volkswagen Passenger Cars its largest portfolio Brand which accounts for 48% of the total revenue share while contributing to 4.4k Units sold in 2016 mainly driven by growth in Asia Pacific Market.



Bentley, Bugatti, Lamborghini & Ducati:  The exotic brands, which have been methodically acquired one after the other by Piech, are consolidated into larger units so few financial details are provided.


Porsche: Another premium brand sunder VW groups belt joined the group in 2013. Which is steadily growing at around 5-10% YoY. This VW third largest contributor to total sales units.


Skoda: Ever since it’s acquisition in 1993 Brand Skoda has added great value to the VW group both in terms of product offerings and brand value.


Europe: Western Europe is one of our main sales markets. A drop-in prices due to the economic climate triggered by falling demand in this region would have a particularly strong impact on the Company’s earnings


VW brand

The flagship marque is a dominant player in western Europe, China and Brazil, but it still heavily lags its competitors in the U.S., Russian and Indian markets.


The Spanish subsidiary is one of VW Group’s few weak links. Multiple attempts have been made at successfully positioning Seat within the stable of eight car brands, all so far in vain. Largely dependent on its home market, the brand has often been seen as one failure away from being shut down. Industry watchers have speculated that Seat could be replaced by Alfa Romeo should Piech ever pry the underleveraged Italian icon from Fiat’s grasp. Seat, which hopes to sell 500,000 cars by 2018, had an operating loss of about 150 million euros last year.

VW commercial, MAN & Scania:


MAN’s failed takeover bid for VW’s Swedish ally, Scania, in 2006 prompted the German automaker to buy a stake in MAN. Volkswagen has steadily expanded its equity interest in both trackmakers and now has secured full control. Relations between the two truck rivals have often been icy, however, and VW has been unhappy with the progress in achieving meaningful synergies, repeatedly changing executives to send a message. Product cycles are typically twice as long in the truck industry, so it may take many years until VW can extract more value out of its purchases.



Present & Future Markets: China is currently the largest market for VW and growing steadily and offers great strategic fit with its competition. Maintaining the leadership position in china is the opportunity for VW to stabilize its sloppy markets. India on the other hand offers stable geopolitical and demand for the group which is seen as future growth driver for the VW. With safety being considered as key parameter in Passenger vehicles VW has its own advantage in the years to come.

Asia: WV Asia pacific market is growing @ around 10% over the last 3 years which is its just only next to it’s strong hold of European market with sales of 4.3 Million units for the year 2016. Europe contributes to around 4.3 million units and growing at 2+ percent if WV growth in Asia continues the same way Asia is going to be its largest market by volume.

EV: Today in automobile future is Electric Vehicles (EV), with all major competitors are focused on R&D in the field to be future ready VW set its own 2025 strategy. With its future programme "TOGETHER - Strategy 2025" the Group is aiming for a leading position in sustainable mobility.




Rising concerns over Diesel Vehicle: Automakers around the world are at somewhat uncertain future given Changing Global priorities towards usage of fossil fuel for mobility, particularly in Diesel vehicles. Volkswagen is facing a greater challenge in the segment as premium vehicles are run on Diesel and need to switch over as fast as they can to cope up with climate change and its impact on Diesel vehicles.


South America: Sales of WV in South America are constantly declining at the rate of around 25% YoY where is has a negligible market share and Acquisition like SEAT helped WV a little to make inroads in the market.


Competition: VW is challenged in recent past of various grounds of safety and diesel issues in North America which hit the brand hard in terms of value and performance both. The road ahead seems more challenging as in Future Growth driver is clearly EV where players like TESLA made huge inroads in terms all possible automotive touch points.

To be able to develop future products with infrastructure capital intensive and how far VW can take up this challenge and still keep its market dominance needs to be seen in the years to come.

Author: dwapp