Ankit Punani

11BSPHH010131

MAGNUMOPUS

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INDEX

Serial no

Content

Page no

1 Introduction / Origin & Genesis of the brand

with associated brand stories and timeline

2-16

2

Structure & Corporate Management of brand

with principal executives and brand managers

16-22

3 Brand portfolio with a detailed analysis with

STP

23-35

4 Advertising Agencies associated with the brand

and covering all strategic brand campaigns

35-42

5 Market environment including sectoral &

industry analysis

43-51

6 Application of BCG Matrix, Porter’s five forces,

Mckinsey 7 s on the brand

52-69

7 Costing & Pricing analysis of brand portfolio

70-72

8 Consumer Behaviour elements related to the

brand and history of brand ambassadors and their

description.

72-74

9 Brand repositioning campaigns (if any) and the

reasons for it .

74-81

10 Competitor analysis including market shares and

brand rankings as per interbrand /super brand

etc.

82-94

11

Future and Recommendation

95-107

12

Bibliography

108

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Introduction / Origin & Genesis of the brand

A Brand is the "name, term, design, symbol, or any other feature that identifies one

seller's good or service as distinct from those of other sellers." Initially, Branding was

adopted to differentiate one person's cattle from another's by means of a distinctive

symbol burned into the animal's skin with a hot iron stamp, and was subsequently used

in business, marketing and advertising

Branding started in Sweden in the middle age (476-1492) when the ruling economy

was the agrarian and commodities were extracted from the natural world: animal,

mineral, vegetables, etc.

A brand was the action of burning a symbol into the flesh of a Norse in order to

signify ownership of the animal. Entomology tells us that the word ―brand‖ is a

degenerate of the old Norse word ―brandr‖.

The Vikings may have spread the word ―brandr‖ in England, where it was eventually

incorporated into daily language. Similarly this action was adopted in the late twelfth

and early thirteenth centuries, through the practice of abjuration. The practice of

abjuration meant rejecting or exiling a criminal from England forever. To

communicate the status of the exiled person to the world-at-large and in order to

identify them as not trustworthy, abjurers‘ thumbs were branded with an ―A.‖

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In trade law, the term trademark is used instead of the word ―brand‖. Patents and

Trademarks were legally recognized for the first time with the establishment of the

Venetian Patent law in 1474. The meaning of a brand was later registered in the

dictionary in 1552 as ―identifying mark made by a hot iron‖. It was in between the mid

16th century and the beginning of the 19th that the word ―brand‖ began to be related

to trade, emotions and trust. A trademark was a symbol that would differentiate the

goods between manufacturers. The oldest brands which exist today were introduced

into the market in the 18th century and are from the alcoholic drinks sector. This is

due to the fact that these products are non-perishable (because they are alcohol

based) and thus needed a distinguishing name/symbol so that they could be

marketed over a wider area and during a longer time period. Some examples of the

oldest brands include ―Twining 1706‖, ―Schweppes 1798‖ and ―Ballantine‘s 1809‖.

Even though the first brands had been launched, it was not legally possible to patent

something in the U.S. until after the establishment of the Constitution in 1790 and in

France with the establishment of the patent law one year later in 1791. In the

preindustrial era (1760-1830), agriculture still formed the foremost source of income

and employment and most ―consumers‖ produced their own food products. By the

end of this era, in 1827, the word brand was broadened and registered in a

dictionary as ―a particular make of goods‖.

A consumer who perceives a brand as superior is willing to spend more money on it.

But how is a brand defined? Kotler (2007, p.636) defines a brand as a ―name, term,

sign, symbol or design or combination of them which is intended to identify the goods

and services of one seller or a group of sellers and to differentiate them from those

competitors‖. This evidence is supported by Doyle and Stern (2006, p.164) who add

that ―a brand can be defined as a specific name, symbol or design ... [and] is used to

distinguish a particular seller‘s product‖. This assumption reveals that the function of

a brand consists of differentiation and identification.

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Volkswagen: Commodity, product, company, brand?

Hollensen differentiates between a brand and a commodity by stating that ―Branding

is associated with added costs in the form of marketing, labelling, packaging and

promotion. Commodities are ‗unbranded‘ or undifferentiated products.‖ Doyle and

Stern distinguish the difference between a product and a brand, by saying, that a

product ―is anything that meets the functional [tangible] needs of customers. In this

context, one can say that a commodity represents basic, unbranded products such

as Steel or other raw materials. However, products represent the next level, in this

case it is automobiles. As a result, the brand level, which has intangible benefits, is

represented by a particular brand in the automobile industry: Volkswagen, the

―people‘s car‖.

However, as Randall describes, Volkswagen is a company brand which means, that

the ―name of the company identifies the brand.

The Group

The Volkswagen Group consists of two divisions: the Automotive Division and the

Financial Services Division. The Automotive Division, in turn, comprises two

business areas: ―Passenger Cars and Light Commercial Vehicles‖ and ―Trucks and

Buses, Power Engineering‖. They combine with this structure the Passenger Cars

and Light Commercial Vehicles segment and the reconciliation to the Passenger

Cars and Light Commercial Vehicles Business Area. The activities of the Automotive

Division are centred on the development of vehicles and engines, the production and

sale of passenger cars, commercial vehicles, trucks and buses, and business

comprising genuine parts, large-bore diesel engines, turbo machinery, special gear

units, propulsion components and testing systems.

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The Financial Services Division, which corresponds to the Financial Services

segment, combines dealer and customer financing, leasing, banking and insurance

activities, and fleet management.

The Volkswagen Group with its headquarters in Wolfsburg is one of the world‘s

leading automobile manufacturers and the largest carmaker in Europe. In 2011, the

Group increased the number of vehicles delivered to customers to 8.265 million

(2010: 7.203 million), corresponding to a 12.3 percent share of the world passenger

car market.

In Western Europe over one in five new cars (23.0 percent) comes from the

Volkswagen Group. Group sales revenue in 2011 totaled €159 billion (2010: €126.9

billion). Profit after tax in the 2011 financial year amounted to €15.8 billion (2010:

€7.2 billion).

The Group is made up of twelve brands from seven European countries:

Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati,

Volkswagen Commercial Vehicles, Scania and MAN.

Each brand has its own character and operates as an independent entity on the

market. The product spectrum extends from low-consumption small cars to luxury

class vehicles. In the commercial vehicle sector, the product offering ranges from

pick-ups to buses and heavy trucks.

The Volkswagen Group is also active in other fields of business, manufacturing

large-bore diesel engines for marine and stationary applications (turnkey power

plants), turbochargers, turbo machinery (steam and gas turbines), compressors and

chemical reactors, and also producing vehicle transmissions, special gear units for

wind turbines, slide bearings and couplings as well as testing systems for the

mobility sector.

The Group operates 100 production plants in 18 European countries and a

further nine countries in the Americas, Asia and Africa. Each working day, 501,956*

employees worldwide produce some 34,500* vehicles, are involved in vehicle-related

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services or work in the other fields of business. The Volkswagen Group sells its

vehicles in 153* countries.

It is the goal of the Group to offer attractive, safe and environmentally sound vehicles

which are competitive on an increasingly tough market and which set world

standards in their respective classes.

Introduction about Volkswagen India With its headquarters in Pune, Maharashtra (India), the Volkswagen Group is

represented by three brands in India: Volkswagen, Audi and Skoda. The Volkswagen

Group is completing 10 years of its India journey which began with the entry of the

Skoda brand in 2001, Audi brand and Volkswagen brand in 2007. Each brand has its

own character and operates as an independent entity in the market.

Group India is a part of Volkswagen AG, which is globally represented by 9 brands-

Audi, Bentley, Bugatti, Lamborghini, Scania, Seat, Skoda, Volkswagen Commercial

Vehicles (Volkswagen Nutzfahrzeuge) and Volkswagen Passenger Cars. The

product range extends from low consumption small cars to luxury class vehicles and

trucks. The

Group operates 60 production plants around the world. In total more than 370,000

employees produce more than 26,600 vehicles or are involved in vehicle-related

services each working day. The highest volume brand of the Group is Volkswagen.

Europe‘s most successful car brand has made successful inroads into the Indian

market. Volkswagen presents itself in a variety of segments as a premium

manufacturer of high-volume models. As a first step, the Volkswagen brand

launched the globally successful Passat in 2007. To expand its portfolio and cater to

the mid segment, Volkswagen launched one of the brand‘s bestselling models, the

Jetta, in India in July 2008. Both the sedans are being assembled locally. The iconic

New Beetle and the high-end SUV Touareg were introduced in December 2009. Also

available is the high-end automobile Phaeton.

From December 12, 2009 the new Pune plant has started rolling-out the hatchback version of the Volkswagen Polo.

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The made-in-India Polo was presented to the general public for the very first time at

the Auto Expo 2010. The launch of this premium hatchback in March, brought

access to one of the Indian passenger car segments with the highest-volume unit

sales.

Skoda entered the Indian market in 2001. Its plant in Aurangabad, which assembles

a total of eight models including the Audi A6 and Audi A4 as well as the Volkswagen

Passat and Volkswagen Jetta, has been

instrumental in this achievement. For Indian customers, the name of Skoda stands

for high-quality, robust yet affordable cars in the compact, lower mid-size and

midsize ranges. In terms of models, the Skoda product offering in India ranges from

the Fabia through the Octavia, the Laura to the Superb. Skoda lifted the veil off its

international bestseller SUV Yeti for the first time in India at the Auto Expo 2010.

Audi offers high-end models of interest to Indian customers. With the A8 and the Q7,

the A6, the A4 and not forgetting the R8, the TT and the recently introduced Q5, Audi

offers top-quality, technically brilliant cars with an exclusive flair in the relevant luxury

segments. Audi‘s positioning as a leading manufacturer of such high-class vehicles,

both assembled in India and imported through Audi India, will be systematically

pursued in future. At Auto Expo 2010, Audi also unveiled the Audi Sport back

Concept – a five-door model offering a glimpse into Audi's future design vocabulary.

Recognizing the importance of an extensive dealer network towards scripting a long-

term success story, the brands of the Volkswagen Group are setting up dealerships

spanning the entire country with Volkswagen, Skoda and Audi having in total around

120 dealerships across the country today. They are not only laying the foundation for

a substantial increase in sales but also doing the groundwork for offering a first-class

all-round service, taking customer satisfaction to the highest level. Keeping this in

mind they launched their first Group.Logistics Service facility recently that would help

make their dealer network become more efficient and smoothen the entire process of

service. In the period between January 2009 and December 2009, the three brands

of the Volkswagen Group have together sold around 19,000 vehicles in India, an

increase of 1.4% over 2008 in a year marked by recession in the auto industry. A

crucial element of the Volkswagen‘s strategy is to establish a long-term presence in

India is the Group‘s production facility near Pune in the Chakan Industrial Park.

The investment with a total sum of around INR 3,800 crore (580 million Euros) is the

biggest investment of a German company realized in India so far. The plant, one of

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the most modern in the Volkswagen Group has a high level of vertical integration –

not least attributable to the high share of local suppliers. The recruitment is of some

2,500 employees at the end of 2010, primarily from the region itself. With the

investment, the vertical integration of suppliers and the employment of people

Volkswagen will thus demonstrate its commitment to the new site. Simultaneously

Volkswagen contributes to a positive development of the economy of the region and

of Maharashtra at the same time. The new plant was inaugurated by The

Honourable Governor of

Maharashtra, His Excellency Shri. S. C. Jamir, and Prof. Dr. Jochem

Heizmann, Member of the Board of Management of Volkswagen

Aktiengesellschaft with responsibility for ‗Group Production‘ end of March 2009 and

has begun building the Skoda Fabia compact car in May 2009. The launch of Polo,

the hatchback car, is a visible testimony to Volkswagen‘s vision of ―Mobility - Made in

India‖.

The following figure gives a clear overview about endorsing brand strategy:

Figure 1 – Endorsing Brand strategy

As a source brand, Volkswagen acts as the ―parent brand‖ of the other brands. Audi,

Seat, Lamborghini and the others are called by their own name. This is necessary, in

order to attract different target groups and to maintain its own brand image.

Figure 2 – Source Brand Strategy

GOLF LUPO JETTA POLO

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Brand Inventory

HISTORY: Volkswagen, which means the people's car, was established by Adolf Hitler

and Ferdinand Porsche in an effort to make a cost-effective automobile for the

people of Germany. Porsche went on to later success with a line of luxury

automobiles. The original designs for the Volkswagen Beetle were made in

1931; however, it wasn't until 1938 that the car was actually introduced to the

public. The factory was based in Wolfsburg, Germany, and all cars were

branded with the VW logo. The history of the Volkswagen brand is filled with

conflict, and the company nearly closed its doors shortly after its launch.

When in 1937 the company known as "Gesellschaft zur Vorbereitung des Deutschen

Volkswagens mbH" was founded, no one could have guessed that it would one day

be Europe's largest carmaker. The history of the company - with all its trials and

tribulations- is first and foremost a story of impressive success.

On May 28th, 1937 the "Gesellschaft zur Vorbereitung des Deutschen Volkswagens

mbH" company is founded, and on September 16th, 1938 it is renamed

"Volkswagenwerk GmbH". In early 1938, in what is today Wolfsburg, work begins on

construction of the Volkswagenwerk plant which is to house production of the new

vehicle designed by Ferdinand Porsche.

After the end of the Second World War, in mid June 1945, responsibility for

Volkswagenwerk is placed in the hands of the British Military Government. Under the

management of Major Ivan Hirst, mass production of the Volkswagen Beetle is

started. On March 8th, 1950 the Type 2 goes into production, expanding the

company's product range. The Volkswagen Bus, still today known to many as the

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"VW Bully", soon creates rising demand thanks to its multifunctional capabilities. In

1956 a separate manufacturing base for the Transporter is established in Hanover,

at the same time setting down the roots of today's Volkswagen Commercial Vehicles

brand. In 1973 the Passat is the first model of the new generation of Volkswagen

vehicles to go into production - with front-wheel drive, a water-cooled four-cylinder

engine and a range of engines up to 110 bhp. The Passat is built in line with the

modular strategy, by which standardised components usable in a range of different

models provide significant rationalisation.

In January 1974 the first Golf is built at the Wolfsburg plant. in June 1983 production

of the second-generation Golf begins. The car is designed for a largely automated

assembly process, and in the specially erected final assembly hall, designated Hall

54, robots are deployed for the first time in vehicle manufacture.

With the production launch of the Lupo 3L TDI, the first production car to offer fuel

consumption of just three litres per 100 kilometres, in July 1999, Volkswagen once

again makes automotive history. In August 2002, at Volkswagen Slovakia, mass

production of the Touareg, a luxury-class off-road vehicle, is started, marking the

Volkswagen brand's move into an entirely new market segment.

In December 2002 the "Auto 5000 GmbH" company, operating a plant at the Group's

site in Wolfsburg, starts production of the Touran compact van. A special collective

pay model has been developed, aimed at implementing lean production and

involving flat hierarchies, team working, flexible working hours and the deployment of

more process expertise by the workforce.

In 2003 production of the fifth-generation Golf is started, embodying a new

dynamism in its design and engineering.

It is the goal of the Group to offer attractive, safe and environmentally sound vehicles

which are competitive on an increasingly tough market and which set world

standards in their respective classes. The Group consists of eight brands:

Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and Volkswagen

Commercial Vehicles.

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PRODUCT RELATED ATTRIBUTES: Stylish sleek design German engineering Performance Luxury Reliability Comfort Speed Safety

VOLKSWAGEN BRAND PORTFOLIO: Volkswagen includes a plethora of brands catering to different market segments.

Volkswagen has small car segment, middle size/sedan, Suv, Luxury sedan and

commercial vehicles.

The small car is targeted towards youth and small families, who need a fun filled

ride at the same time keeping it under budget. Volkswagen small cars are highly

performance oriented, keeping alive the thrill and adrenaline of driving a small car. It

has following variants under this segment.

Fox

Polo

Cross polo

Polo GTI

Golf

Golf estate

Golf GTI

Golf R32

Golf plus

Beetle

New beetle

New beetle cabriolet

Mid size/ sedan/ luxury: These sedans are targeted towards the executives and

families who do not mind spending extra buck for a top notch comfort and

performance.

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It has following variants.

Jetta

Eos Scirocco

Passat

Passat estate

Passat R36

Passat CC Suv/muv: Targeted towards adventure seekers and big families. Volkswagen suv‘s

boast of ―civilization and wilderness‖. These are suv‘s with the design of a genuine

sports car.

Tiguan

Touran

Sharan

Touareg

Touareg

Touareg R50 Commercial vehicles: The commercial vehicles are targeted towards people who

love expedition, outdoor enthusiasts, artists and professional carriers.

Caddy

Transporter

Caravelle

Crafter

Caddy life

Multivan

California

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Ultra luxury: For the rich and affluent with swankier lifestyles. Phaeton

BRAND EXPLORATORY Customer knowledge: Volkswagen has successfully leveraged its history and tradition of excellence along

with innovation to become one of the most famous and recognized carmaker in the

world. Beetle was a phenomenon. Till today customer talk about beetle. Typical

consumer brand associations for Volkswagen might be ―heritage‖, ―stylish‖,

―powerful‖, ―elegant‖, ―performance‖, ―sporty‖.

Sources of brand equity: The Volkswagen name one of the oldest in the history of

car makers, is no doubt is an important source of brand equity. But being a German

car is a key source of brand equity. The symbol with two v crossing is a known

symbol all over the world. The fact that it‘s a German engineered car adds a ton to

its brand equity, Germans are the best engineers in the whole world.

Volkswagen does not make use of the celebrity endorsers much but recently they

hired―Andrew flintoff and kevin pieterson as a brand ambassadors for luxurious 4x4,

the touareg.

Sponsorships: Official car supplier for the England cricket team.

Games: Volkswagen cars are the exclusive vehicles in pc and psp games like gti

racing, need for speed carbon and test drive unlimited.

Philanthrophy: Volkswagen has environmental friendly programs in which

‗Volkswagen de mexico awards research funds and prizes for species protection.

They also have blue motion technology which reduces fuel consumption and thereby

reducing the emissions. Apart from these Volkswagen has a variety of initiatives for

the safeguard of our environment, from waste disposal to vehicle recycling. One can

get a fair amounf of detail about these environment friendly issues by visiting their

official website.

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Volkswagen Mental Map

Principal Competitors: Bayerische Motoren Werke AG; DaimlerChrysler AG; Fiat

S.p.A.; Ford Motor Company; Fuji Heavy Industries Ltd.; General Electric Company;

General Motors Corporation; Honda Motor Co., Ltd.; Hyundai Group; Isuzu Motors

Limited; Kia Motors Co., Ltd.; Mazda Motor Corporation; Mitsubishi Group; Outboard

Marine Corporation; PSA Peugeot Citroen S.A.; Saab Automobile AB; Suzuki Motor

Corporation; Toyota Motor Corporation; Volkswagen AG; AB Volvo; Yamaha

Corporation.

Structure Of The Group

Volkswagen AG is the parent company of the Volkswagen Group. It develops

vehicles and components for the Group‘s brands, but also produces and sells

vehicles, in particular Volkswagen brand passenger cars and light commercial

vehicles. In its function as parent company, Volkswagen AG holds direct and indirect

interests in AUDI AG, SEAT S.A., ŠKODA AUTO a.s., Scania AB, MAN SE,

Volkswagen Financial Services AG and numerous other companies in Germany and

abroad. More detailed disclosures are contained in the list of shareholdings in

accordance with sections 285 and 313 of the Handelsgesetzbuch ( HGB – German

Volkswagen

Stylish

Heritage

Powerful

Sporty

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Commercial Code), which can be accessed at www.volkswagenag.com/ir and is part

of the annual financial statements.

Volkswagen AG‘s Board of Management is the ultimate body responsible for

managing the Group. The Supervisory Board appoints, monitors and advises the

Board of Management; it is consulted directly on decisions that are of fundamental

significance for the Company.

ORGANIZATIONAL STRUCTURE OF THE GROUP

Volkswagen AG and the Volkswagen Group are managed by Volkswagen AG‘s

Board of Management in accordance with the Volkswagen AG Articles of Association

and the rules of procedure for Volkswagen AG‘s Board of Management issued by the

Supervisory Board. Within the framework laid down by law, the Group Board of

Management ensures that Group interests are taken into account in decisions

relating to the Group‘s brands and companies. This body consists of Board

members, the chairmen of the larger brands and selected top managers with Group

management functions.

Each brand in the Volkswagen Group is managed by a board of management. The

Group targets and requirements laid down by the Board of Management of

Volkswagen AG or the Group Board of Management must be complied with to the

extent permitted by law. Matters that are of importance to the Group as a whole are

submitted to the Group Board of Management in order – to the extent permitted by

law – to reach agreement between the parties involved. The rights and obligations of

the statutory supervisory bodies of the relevant brand companies remain unaffected.

The companies of the Volkswagen Group are managed separately by their

respective managements. In addition to the interests of their own companies, each

individual company management takes into account the interests of the Group and of

the individual brands in accordance with the framework laid down by law.

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The Board of Management of Volkswagen AG comprises nine members. Each

Board Member is responsible for one or more functions within the Volkswagen

Group. Prof. Dr. Martin Winterkorn is the Chairman.

The work of the Board of Management of Volkswagen AG is supported by the

boards of the brands and regions as well as by the other group business units and

holdings.

Chairman of the Board of Management of Volkswagen AG

Prof. Dr. Dr. h.c. mult. Martin Winterkorn Member of the Board of Management of Volkswagen AG, with responsibility for 'Group Research and Development', Chairman of the Supervisory Board of AUDI AG, Chairman of the Board of Management of Porsche Automobil Holding SE Members of the Board of Management of Volkswagen AG

Dr. rer. pol. h. c. Francisco Javier Garcia

Sanz

Functional Responsibility

'Procurement'

Prof. Dr. rer. pol. Dr.-Ing.

E. h. Jochem Heizmann

Functional Responsibility

'China'

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Christian Klingler

Functional Responsibility

'Sales and Marketing'

Member of the Board of Management of

the Volkswagen brand

Functional Responsibility

'Sales, Marketing and After Sales'

Dr.-Ing. E. h. Michael Macht

Functional Responsibility

'Group Production'

Prof. Dr. rer. pol. Horst Neumann

Functional Responsibility

'Human Resources and Organization'

Dr. h. c. Leif Östling Functional Responsibility 'Group Commercial Vehicles'

Hans Dieter Pötsch

Rupert Stadler

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Functional Responsibility 'Finance and Controlling', Chief Financial Officer of Porsche Automobil Holding

Chairman of the Board of Management of Audi

AG

The Supervisory Board headed by Chairman Dr. Ferdinand K. Piëch has 20

members.

The Supervisory Board of Volkswagen AG comprises 20 members and conforms to

the German Co-determination Act Chairman of the Supervisory Board

Hon.-Prof. Dr. techn. h. c. Dipl.-Ing. ETH Ferdinand K. Piëch

Chairman

April 16, 2002*

Members of the Supervisory Board

Berthold Huber

Deputy Chairman

First Chairman of IG Metall

May 25, 2010*

Dr. Hussain Ali Al-Abdulla

Vice Chairman of Qatar Holding LLC

April 22, 2010*

Khalifa Jassim Al-Kuwari

Chief Operating Officer of Qatar Investment Authority and Qatar Holding LLC

May 03, 2011*

Jörg Bode

Minister of Economic Affairs, Labor and Transport for the Federal State of Lower

Saxony

November 04, 2009*

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Jürgen Dorn

Chairman of the Group Works Councils of MAN SE

January 01, 2013*

Annika Falkengren

President and Group Chief Executive of Skandinaviska Enskilda Banken AB

May 03, 2011*

Dr. Hans-Peter Fischer

Chairman of the Board of Management of Volkswagen Management Association

(VMA)

January 01, 2013*

Uwe Fritsch

Chairman of the Works Council at the Volkswagen AG Braunschweig plant

April 19, 2012*

Babette Fröhlich

IG Metall,

Department head for coordination of Executive Board duties an planning

October 25, 2007*

David McAllister

Minister-President of the Federal State of Lower Saxony

July 01, 2010*

Hartmut Meine

Director of the Lower Saxony and Saxony-Anhalt Regional Office of IG Metall

December 30, 2008*

Peter Mosch

Chairman of the General Works Council of AUDI AG

January 18, 2006*

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Bernd Osterloh

Chairman of the General and Group Works Councils of Volkswagen AG

January 01, 2005*

Dr. jur. Hans Michel Piëch

Lawyer in private practice

August 07, 2009*

Ursula Piëch

April 19, 2012*

Dr. jur. Ferdinand Oliver Porsche

Member of the Board of Management of Familie Porsche AG

Beteiligungsgesellschaft

August 07, 2009*

Dr. rer. comm. Wolfgang Porsche

Chairman of the Supervisory Board of Porsche Automobil Holding SE

Chairman of the Supervisory Board of Dr. Ing. h. c. F. Porsche AG

April 24, 2008*

Stephan Wolf

Deputy Chairman of the General Works Council of Volkswagen AG

January 01, 2013*

Thomas Zwiebler

Chairman of the Works Council of Volkswagen Commercial Vehicles

May 15, 2010*

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Key Executives For Volkswagen India Pvt Ltd.

Name Board

Relationships Title Age

Gerassimo

Dorizas

No

Relationships

Managing Director and President --

Hans-

Jaochim

Rothenpieler

No

Relationships

Managing Director for Engineering - VW

Saschen

--

Maik

Stephan

No

Relationships

Managing Director of Volkswagen Group

Sales

--

K. K. Swamy No

Relationships

Managing Director and Vice President 57

Frank Tuch No

Relationships

Head of Group Quality Assurance -VW

Group

--

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Brand Portfolio

Brand positioning

De Chernatony (2006) describes the positioning of a brand as ―ensuring that

customers instantly associate a brand with a particular functional benefit…‖ (p.37). In

addition to this, Kapferer (2004) states that positioning a brand means emphasising

the competitive advantages and characteristics, which differentiates a brand from the

others, whilst at the same time making it appealing to consumers. This definition

suggests that brand positioning defines the strategic approaches in order to

differentiate a brand from its competitors. Elliott and Percy (2007, p.236) add, that

―positioning establishes the link in the consumer‘s mind between the brand and

category need, why you want the product‖.

De Chernatony defines three characteristics of a brand positioning strategy:

1) The strategy should be centred on the brands‘ attributes.

2) Positioning is about influencing the consumer‘s perceptions, not about

the development of a brand.

3) The positioning strategy should focus on the consumers‘ values and

expectations of a brand, not the attributes valued by the company itself.

However, these characteristics neglect the competition as an important factor in

positioning a brand. Major competitors and their brands‘ attributes and values need

to be identified in order to offer distinctive advantages.

In addition to this, Kapferer determines four questions in order to be able to position

a brand These questions are concerned with the brand promise and the consumer

benefit, the target groups, the occasion when the product will be consumed and the

definition of the major competitors.

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This approach represents the way of proceeding in order to positioning a brand as it

considers the consumers as well as the competitors.

Both of the aforementioned approaches by de Chernatony (2006) and Kapferer

(2004) do not consider all of the attributes of a product or brand. Nevertheless, it is of

outstanding importance to choose only one or two benefits of a product which can be

transferred through a positioning statement. Choosing too many messages can

confuse consumers, and as a result, prevents them from buying the product.

Elliott and Percy define a format of a positioning statement as follows:

“(Name) is the brand for (target audience) that satisfies (category need) by offering

(brand benefit)”.

As the authors assert, for the target audience the brand ―satisfies why they need it,

provides a motivating reason for considering it, communicates the optimum benefit

and is consistent with category motivating behaviour‖. This concludes that a

Positioning Statement consists of communicated benefits and the resulting

motivation for a customer to purchase the product.

Positioning statement of Volkswagen

According to Elliott‘s and Percy‘s (2007) approach, VW‘s positioning statement could

be defined as follows:

Volkswagen is the brand for most segments of society, across boundaries and

social barriers that satisfies the need for secure, reliable and high-quality

vehicle transportation, by offering attractive top of the range family cars as

well as luxury automobiles.

25 | P a g e

This statement represents the characteristics of the brand Volkswagen. It is a multi-

brand which targets nearly every segment possible by offering cars in every price-

range and for every possible use . When Volkswagen is translated, it means

―people‘s car‖, which also supports the targeting of every segment and is congruent

with the company‘s mission. Furthermore, Volkswagen is known as a reliable and

high-quality vehicle manufacturer, and is also known for durability, reasonable prices

and good trade-in value .

Positioning statement in comparison with competition

In order to compare Volkswagen‘s positioning strategy with the competition, the main

competitor, Toyota will be analysed.

The positioning of Toyota is described as ―Moving Forward‖ (Toyota, 2010). This

statement embodies the spirit of the constant innovation of the company. It lends the

associations of quality and technological capability to the brand. As Doyle and Stern

(2006) state, Toyota is deeply committed to a customer orientation and focuses on

outstanding quality. The company‘s production system is keeping costs comparably

down. Toyota sells its products under Toyota, Lexus, Hino and Daihatsu brands

(Marketline, 2010b) and places special emphasis on the development of hybrid cars

(Toyota, 2010).

Based on this information, Toyota‘s positioning statement can be described as

follows:

Toyota is the brand for environmentally aware car drivers all over the world

that satisfies the need of reliable, secure and innovative automobiles by

offering high quality cars for comparatively low prices.

The German Volkswagen and Japanese Toyota are in a battle for world leadership in

this industry.

26 | P a g e

Volkswagen places particular emphasis on the high price range which attracts

consumers from nearly every sector, and supports this by stating that the company‘s

cars are reliable, secure and of a high quality.

In comparison to this, Toyota emphasises the environmental factor by producing

hybrid cars and comparatively low prices. With regards to technological questions

about the future of the automobile, VW and Toyota disagree with each other.

Volkswagen invests in the diesel engine (blue motion technology), whereas Toyota

believes that hybrid technology is the future.

Nevertheless, according to Kapferer (2004), positioning does not clearly represent all

of the benefits and values of the brand, and it is particularly difficult to differentiate

between one positioning statement and the other, especially in this case, when the

same product is offered.

Volkswagen - Brand Analysis

This section emphasises and critically analyses theoretical concepts which can be

used to analyse consumer and stakeholder perceptions such as brand identity,

brand image, brand equity and brand personality. These concepts will be applied to

the brand Volkswagen. For the purpose of clarity: the primary research necessary for

this chapter was conducted in Germany, because the researcher is German and

therefore wanted to explore the perceptions of the German market in particular.

Thirty German people participated in the questionnaire. The results will be evaluated

in the following sections and presented in the brand pyramid.

Brand equity

The term brand equity can be defined as ―a set of brand assets and liabilities linked

to the brand, its name and symbol that add to or subtract from the value provided by

a product or service to firm or to the firm‘s customers‖ .These liabilities can be

divided into five categories:

27 | P a g e

1. Brand loyalty

2. Brand awareness

3. Perceived quality

4. Brand associations

5. Other proprietary brand assets

In this context, Hollensen (2008) adds, that equity can be seen as the premium a

customer would pay for the branded product in comparison to an identical,

unbranded product. This suggests that brand equity is an additional source of

revenue for a company. In the case of Volkswagen, a consumer buys a car with a

well-known, reputable name on it. The question is: Would you buy exactly the same

car without the branding ―VW‖ on it?

Imagine, you can choose between these two cars (See Questionnaire –

appendix 4)

A typical Volkswagen for £ 20,000: 21/30 (70%)

exactly the same car from an unknown manufacturer for £ 18,000: 9/30 (30%)

This result suggests that people rather buy a car with a name on it, in this case

Volkswagen, than buying a car without a name on it, even if it is exactly the same

car. The price difference of £2,000 can be seen as an added source of revenue,

because this is what people pay for the brand. Volkswagen is one of the oldest car

manufacturers in the world, and because it is a German car, it is a key source of

brand equity. People pay for the brand in order to be assured, that they bought the

right car. Two of the divided characteristics of brand equity by Aakers can be

transferred to the Volkswagen brand:

28 | P a g e

Did you ever buy a Volkswagen? If yes, would you buy another one? (See

Questionnaire)

Yes: 26/30 (86,6%)

No: 2/30 (6,7%)

Not sure: 2/30 (6,7%)

Brand loyalty People buy Volkswagen cars and stay loyal to the brand (86,6%).

Do you know Volkswagen? (See Questionnaire)

Yes: 30/30 (100%)

No: 0/30 (0%)

Brand awareness People are aware of the brand (100%).

Brand Identity

De Chernatony defines Brand identity as ―the distinctive or central idea of a brand

and how the brand communicates this idea to its stakeholders.‖ In addition to this,

Kapferer states, that a brand identity ―is the common element sending a single

message amid the wide variety of its products, actions and communications.‖ This is

congruent with the aforementioned basic characteristics of a brand: differentiation

and identification. These definitions suggest that the brand identity is developed by

the company and not by the consumers. According to de Chernatony (2006), the

following diagram will help managers to reinforce a meaning behind a brand. This

suggests, that there are many bodies inside a company contributing to the

establishment of a brand identity, and that all these components need to work

closely together, in order to achieve the desired identification.

29 | P a g e

Figure 3 – The components of

brand identity

In the case of Volkswagen, it is hard to conduct primary research on this topic,

because brand identity develops from the internal decisions of a company. However,

the researcher is of the opinion, that the aforementioned positioning statement is

deeply related to the brand identity. In order to see if the customer‘s perceptions

agree with the brand identity, a comparison between the brand identity and the brand

image will be evaluated in the next section.

Brand image

Kapferer (2004) and de Chernatony (2006) both describe a

brand image as, a set of attributes and messages of a brand

perceived by an individual. These different messages can

consist of the brand name, symbols, advertisements or even

personal experiences of the brand. This suggests that a

brand image is consumer-orientated and brand identity is

company-orientated. However, as de Chernatony states: ―It

is unlikely for two people to have the same image of a

brand, but their images may have common features‖. Volkswagen identifies itself

globally with the symbol ―The Car‖. This brand identity represents the attributes and

30 | P a g e

values the brand stands for, which were mentioned earlier in the positioning

statement.

But how do the consumers perceive this identity? The first question of the

questionnaire were:

What comes into your mind when you think of Volkswagen? (See

Questionnaire)

reliable: 28/30 participants (93,3%)

high quality: 29/30 participants (96,6%)

comfort: 22/30 participants (73,3%)

expensive: 18/30 participants (60%)

good service: 23/30 participants (76,6%)

others: 9/30 participants (30%)

These results reveal that people associate Volkswagen with reliability and high

quality, which is congruent with the aforementioned positioning statement, and the

identity of VW. The price image is balanced, as Volkswagen is not considered to be

expensive or cheap.

Overall, one can say, that the German people trust Volkswagen and that the true

identity of the company is appreciated by the German consumers. However, this is

just a small scale analysis, which does not necessarily represent all German people

and can therefore not be generalised.

Brand personality

De Chernatony states, that ―Brand Personality focuses on what the brand says about

the consumer and how they feel being associated with it‖. In addition, Kapferer

(2004, p.108) states that ―the way [a brand] speaks of its products or services shows

31 | P a g e

what kind of person it would be if it were human‖. This suggests that brand

personality can be seen as a reflection of the personality and lifestyle of the

consumer. As Parker (2009) describes, brand personality is a result of direct and

indirect contact with the brand. Direct contact for example consists of individuals,

which a consumer associates with a brand, and indirect contact includes different

attributes and benefits, as well as advertising and price characteristics. Companies

can use symbolic devices in order to establish a relationship between the product

and the consumer.

Complete the Sentence: People drive a Volkswagen, because… (See

Questionnaire)

…they feel secure while driving: 14/30 (46, 7%)

…it is a symbol of status: 15/30 (50%)

Others: 1/30 (3.3%)

If Volkswagen is a symbol of status, how would you describe it? (See

Questionnaire)

luxurious: 9/30 (30%)

self-confident: 12/30 (40%)

sophisticated: 10/30 (33,3%)

educated: 13/30 (43,3%)

others: 0/30 (0%)

If Volkswagen was a person, who would it be? (See Questionnaire)

A politician: 7/30 (23,3%)

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A father/mother of a family: 13/30 (43,3%)

A pop Star: 5/30 (16,7%)

A sport star: 5/30 (16,7%)

Others: 0/30 (0%)

In the case of Volkswagen, consumers do not necessarily buy an Audi or a Bentley

just because of the performance of the brand. They buy it because it represents a

certain status and lifestyle. Many participants described Volkswagen as educated

and refined. If Volkswagen was a person, people would describe it as a family

person. However the results suggest, that people feel very secure and comfortable

while driving a Volkswagen, which is congruent with the result in question one. This

means, that Volkswagen represents an emotional, caring member of the family

which, when transferred to a car, means the driver feels comfortable and secure.

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Brand Pyramid

Brand Pyramid as a summary of the key functional benefits ―anything that allows the

brand to make a rational claim which has been superbly linked with emotional

rewards through welcomed values, all of which are understood through personal

traits‖. This suggests that the brand pyramid helps to evaluate the brand essence.

This argument is supported by Kapferer (2004), who says that the brand essence is

the summary of the identity and/or positioning of a brand. This means, that the brand

essence is the core of the brand

Figure 4 – Brand Pyramid

In order to build a brand pyramid for Volkswagen, the aforementioned results of the

questionnaire were summarised. Volkswagen‘s attribute is comparable to the

positioning statement, where VW is defined as a car manufacturer who attracts

34 | P a g e

target groups throughout society. The section ―Brand Image‖ revealed that German

people see Volkswagen as a reliable, high quality brand which produces comfortable

cars. These characteristics can be found in the values and benefits of the brand

pyramid. The results of the questions concerning ―Brand Personality‖ revealed that

people feel secure while driving, that VW is a self-confident and educated symbol,

and also that people associate it with human emotional relationships such as a

family. These characteristics are represented in personality traits and emotional

rewards.

This pyramid summarises the results of the questionnaire conducted in Germany.

Although this diagram does not represent a holistic view of the German market, the

researcher is of the opinion that there will only be small differences between other

German people. ―It is unlikely for two people to have the same image of a brand, but

their images may have common features‖

Reliability,

Loyalty

open-mindedness

Self confident, exciting, safe

safety, high performance, good quality

Vehicle transportation for every segment of

society.

Values

Personality

traits

Educated

Caring

Open-minded

Emotional

Rewards

Attributes

Benefits

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Global branding

Hollensen (2008) distinguishes between a local and a global brand. A local brand

consists of individual, local characteristics, whereas a global brand is a single brand

which represents a company or a product internationally, and targets multiple

markets.

―A global brand is an appropriate approach when a product has a good reputation or

is known for quality.‖ This suggests, that global branding is possible when the brand

is built into a cultural stereotype

However, it is impossible to not adjust to local conditions, such as laws and

structures. This is supported by Randall (2000) who asserts, that it is a myth to say

that a global brand is identical in every country. Instead he loosely defines a global

brand as follows:

―[A global brand]…

… is basically the same product or service everywhere, with only minor

variations.

… has the same brand essence, identity and values.

… uses the same strategic principles and positioning

… eomploys the same marketing mix as far as possible.‖

In the case of Volkswagen, the ―Made in Germany‖ model supports the company in

its global branding. Consumers from all over the world associate a robust

performance, high quality and outstanding engineering skills with Germany.

The Volkswagen brand claim ―Das Auto‖ (‗The Car‘) supports this branding strategy.

This slogan has been implemented worldwide since January 2008 (Volkswagen,

2010) and using the German language will uphold and communicate the strengths of

36 | P a g e

the Volkswagen brand internationally. This claim represents the outstanding value,

quality and safety of the Volkswagen products. ―The united global brand claim will

resonate from the brand‘s source in Wolfsburg to the homes and hearts of

Volkswagen customers all over the world‖ .This evidence suggests that the brand

positioning, strategy and identity can be applied worldwide with only a few

adjustments. This argument is supported by Randall, who states that ―The definition

of the brand … the positioning, the principles of the mix and targeting have one best

solution … it should be applied in every country with changes only where they are

absolutely unavoidable.‖

Advertising Agencies associated with the brand and

covering all strategic brand campaigns

Advertising

To advertise the product better and create awareness about product; Volkswagen

will use different advertisement methods to approach the consumers. The diversity of

advertisement channels will help in reaching the masses of different mindsets.

Advertisement methods used

• Volkswagen will use print and electronic media to introduce the product to

consumers.

• Special events will be sponsored by Volkswagen.

• Use of Billboards, flex signs etc for massive introduction of car‘s launch.

• Special road shows and displays will be set at dealers outlets.

• Prize contest will be conducted to attract people towards the car.

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Advertising agency

In 1949, William Bernbach, along with colleagues, Ned Doyle and Maxwell Dane,

formed Doyle Dane Bernbach (DDB), the Manhattan advertising agency that would

create the revolutionaryVolkswagen ad campaigns of the 1950s and 1960s.

The corporate headquarters and factory that produced Volkswagens was located

in Wolfsburg, Germany. Because Volkswagen‘s advertising budget in 1960 was only

$800,000 . DDB‘s bare-bones, black-and-white approach, coupled with a projected

common theme of irreverence and humor, fit Wolfsburg‘s needs well. Each

Volkswagen ad was designed to be so complete that it could stand alone as a viable

advertisement, even without addressing all aspects of the automobile.

Taken as a sign of the campaign's runaway success, research by the Starch

Company showed that these Volkswagen advertisements had higher reader scores

than editorial pieces in many publications, noting that Volkswagen advertisements

often didn't even include a slogan or logo. The 1959 Think Small Volkswagen series

of advertisements were voted the No. 1 campaign of all time in Advertising Age‘s

1999 The Century of Advertising.

Following the success of Think Small, a follow-up ad-campaign titled "Lemon" left a

lasting legacy in America - use of the word "Lemon" to describe poor quality

cars. "Lemon" campaign introduced a famous tagline "We pluck the lemons, you get

the plums.

Volkswagen, whose most notable social media success to date came from "The

Force" viral Super Bowl ad two years ago, is taking a new approach to cultivating

fans with a campaign soliciting their stories on Facebook.

The German automaker — this week is launching Why VW, a platform on which fans

can tell their stories how their VWs fit into their lifestyle. The ad is designed to drive

consumers to Why VW, which will seamlessly exist on a dedicated microsite and on

VW's Facebook Page, where they can tell their stories. So far, such stories include

38 | P a g e

the tale of a triathlete who decides to help a physically challenged woman compete

in a race and Alex Flynn, a man who is driving his VW cross-country to raise

awareness about Parkinson's Disease. VW worked with ad agency Deutsch and

crowdsourcing firm Poptent on the effort.

Despite VW's commitment to the new platform, though, it's unclear whether the

brand will be back at next year's Super Bowl. In 2011, the brand's "The Force" ad

featuring a pint-sized Darth Vader became one of the most-viewed ads on YouTube

of all time. (It currently has 54 million views.) Comparatively, VW's 2012 Super Bowl

ad, "The Dog Strikes Back," was a more modest success with 15 million views.

Mayer, however, says that Super Bowl 2013 is "still something we're taking a look

at." However, "the strong push in Q4 is the idea of reconnecting people to our

brand."

Print AD’s

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I have always loved when you see a big idea come out of the smallest of ideas. As

Brand Leaders, sometimes we complain about a lot of things: no money, we

don‘t have any new products in our pipeline, our agency keeps presenting the same

old thing and we are too conservative to do the really cool stuff. While many Brand

Leaders are struggling with how to use new media too many times they opt for the

new conventions they see everyone else doing so they say ―Like Us on Facebook‖

41 | P a g e

approach that generates 38 likes, or they start their own Twitter account and tweet

out something boring every six months. Instead, you should think about the new

media as liberating in that you can use even more creativity than just trying to follow

along what everyone is doing. If you want your brand to generate more love among

your base of users, finding ways that surprise and delight them is a great starting

point. Consumers will feel more connected with you.

Innovative marketing strategies raise awareness

VW India created groundbreaking campaigns such as the world‘s 1st ‗talking

newspaper‘, which used light-sensitive chips to speak to readers about Volkswagen

as they turned the pages of their morning newspaper. The talking newspaper ad

created a sensation in India, and garnered worldwide attention for taking print

advertising to a new level. In one year, brand awareness more than quadrupled,

increasing from 8 percent to a high of 37 percent. Volkswagen next turned to digital

media to extend its success and create new opportunities for customers to connect

with the brand. Lutz Kothe, Head of Marketing for VW India, says, ―At Volkswagen,

innovation is woven into everything we do. In formulating our digital strategy, we

looked beyond the obvious for innovative ways to engage our audience. We knew

that for many people, their car affects their professional life and their professional

identity affects their car choices. This made LinkedIn a natural choice to connect with

current and potential car buyers among the growing Indian professional population.‖

Why LinkedIn?

• #1 resource for career-minded professionals

• Precise targeting by seniority and geography ensures match with affordability

criteria, dealership locations

Results

• 2,700 product recommendations in 30 days

• 2,300 new followers on VW India Company Page

• 960,000 viral updates about VW car models

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Engaging working professionals on LinkedIn

LinkedIn approached Volkswagen India with an opportunity to be the 1st auto major

to establish a presence on LinkedIn Company Pages. ‗Company Pages‘ provide a

branded home base within the LinkedIn community where businesses can showcase

their company, products, and services in a trusted, professional environment.

Volkswagen India participated in the worldwide launch of Company Pages in

November 2010, and soon thereafter opened up their pages to allow LinkedIn

members to post reviews and recommendations of their car line in India including the

New Beetle, Vento, and Polo. Mr. Lutz Kothe, Head of Marketing & PR, Volkswagen

Passenger Cars says ―We were pleasantly surprised to see how easy it was to

create our Company Page on LinkedIn and start engaging with customers among

the LinkedIn community. Furthermore, the quality of interaction was very high.

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Market environment and Industry analysis

Automobile industry is a symbol of technical marvel by human kind. Being one

of the fastest growing sectors in the world its dynamic growth phases are explained

by nature of competition, product life cycle and consumer demand. Today, the global

automobile industry is concerned with consumer demands for styling, safety, and

comfort; and with labor relations and manufacturing efficiency. The industry is at the

crossroads with global mergers and relocation of production centers to emerging

developing economies.

Due to its deep forward and backward linkages with several key segments of

the economy, the automobile industry is having a strong multiplier effect on the

growth of a country and hence is capable of being the driver of economic growth. It

plays a major catalytic role in developing transport sector in one hand and help

industrial sector on the other to grow faster and thereby generate a significant

employment opportunities. Also as many countries are opening the land border for

trade and developing international road links, the contribution of automobile sector in

increasing exports and imports will be significantly high. As automobile industry is

becoming more and more standardized, the level of competition is increasing and

production base of most of auto-giant companies are being shifted from the

developed countries to developing countries to take the advantage of low cost of

production. Thus, many developing countries are making serious efforts to grab

these opportunities which include many Asian countries such as Thailand, China,

India and Indonesia.

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History of Automobile Industry

The evolution of the automotive industry has been influenced by various innovations

in fuels, vehicle components, societal infrastructure, and manufacturing practices, as

well as changes in markets, suppliers and business structures. Some historians cite

examples as early as the year 1600 of sail-mounted carriages as the first vehicles to

be propelled by something other than animals or humans. However, it is believed by

most historians that the key starting point for the automobile was the development of

the engine. The engine was developed as a result of discovering new energy

carrying mediums, such as steam in the 1700s, and new fuels, such as gas and

gasoline in the 1800s. Shortly after the invention of the 4-stroke internal combustion

gasoline-fueled engine in 1876, the development of the first motor vehicles and

establishment of first automotive firms in Europe and America occurred.

During the 1890s and early 1900s, developments of other

technologies, such as the steering wheel and floor-mounted

accelerator, sped up the development of the automotive

industry by making vehicles easier to use. Almost

simultaneously, in America, the societal infrastructure that

would provide fertile ground for the proliferation of

automobiles was being set. Driver‘s licenses were issued, service stations were

opened, and car sales with time payments were instituted. Famous vehicle models

such as Ford‘s Model T were developed during these times and, by 1906, car

designs began abandoning the carriage look and taking on a more ―motorage‖

appearance.

During the 1910s, the development of technologies and societal

infrastructure continued in addition to new manufacturing

practices and business strategies. Traffic lights started

appearing in the U.S. and thousands of road signs were posted

by B. F. Goodrich on over 100,000 miles of U.S. roads. Henry

Ford’s Assembly Line

Model T

45 | P a g e

Ford‘s famous assembly line was launched in 1913, which allowed vehicles to be

mass produced and thus achieved economies of scale. Ford also introduced the

concept of using interchangeable and standard parts to further enable the mass

production process. Automakers also started to merge with other companies (e.g.,

GM acquired Chevrolet) and to expand to other markets (e.g., GM of Canada).

In the 1920s, the development of infrastructure, adoption of new manufacturing

practices, and the merging of companies continued (e.g., Benz and Daimler,

Chrysler and Dodge, Ford and Lincoln). In the U.S., the Bureau of Public Roads and

the enactment of the Kahn-Wadsworth Bill helped facilitate road-building projects

and develop a national road system. In manufacturing, mass production methods

became better established, which led to the availability of a wide range of

satisfactory cars to the public. While Ford had focused on a single model, GM

adopted a new production strategy for providing greater product variety, which

helped the company increase their market share by 20% and reduce Ford‘s by 24%.

In the 1930s, several new vehicle brands were developed (e.g., Ford Mercury,

Lincoln Continental, Volkswagen) and trends in vehicle consumer preferences were

established that differentiated the American and European market. In the U.S.

market, consumers preferred luxurious and powerful cars, whereas in Europe

consumers preferred smaller and low-priced cars. Also during this time, GM‘s

product variety strategy continued to give them a competitive advantage over Ford,

allowing GM to continue increasing their market share while Ford kept losing theirs.

In the 1940s, during World War II (WWII), automotive factories were used to make

military vehicles and weapons, thus halting civilian vehicle production. After WWII,

the economies of most European and some Asian-pacific countries, such as Japan,

were decimated; this required the development of new production and business

strategies such as those of Toyota, which began to develop what is now known as

Just in Time (JIT) manufacturing. Most of the first models produced were similar to

the pre-war designs since it took some time for the plants to revamp their operations

to make new designs and models.

In the 1950s and 1960s, more technological innovations, such as fiberglass bodies

and higher compression ratio fuels, allowed vehicle developers to appease the

46 | P a g e

growing consumer interest for vehicle comfort, look, and feel. Car designs were

highly influenced by emerging safety and environmental regulations. Vehicle speed

limits and front seat belts became standard, in addition to other features such as

heating and ventilation equipment.

The 1970s were marked by stricter environmental regulations and the oil embargo of

the early 70s, which led to the development of low emission vehicle technologies,

such as catalytic converters, and a 55-mph nationwide speed limit in the U.S.

Foreign cars like the Japanese Honda Civic started appearing in the U.S. market.

The Civic was marketed as a fuel efficient and low-emissions vehicle, which given

the recent high oil prices and strict environmental regulations made it well-received.

Despite the entrance of new competitors into the U.S. market, U.S. automakers

underestimated the threat of foreign automakers to their market shares.

In the 1980s, the U.S. automotive industry began losing market share to the higher

quality, affordable, and fuel efficient cars from Japanese automakers. In response to

this market share loss, U.S. automakers began focusing on improving quality by

adopting different Japanese manufacturing management philosophies, such as JIT.

Although their adoption of JIT and other philosophies helped improve the quality of

U.S. vehicles, it did not fully bridge the gap between the quality of U.S. and

Japanese cars. This gap remained because U.S. automakers tried applying JIT

techniques without a full understanding of the whole Japanese manufacturing

system, while Japanese automakers had decades to develop, refine and master their

JIT approach.

Another significant paradigm of the 1980s was the global nature of vehicle

manufacturing. Automakers started assembling vehicles around the world. This trend

was accelerated in the 1990s with the construction of overseas facilities and mergers

between multinational automakers. This global expansion gave automakers a

greater capacity to infiltrate new markets quickly and at lower costs. The increased

product offerings in many markets led to consumers having a greater variety of

vehicles from which to choose. To this new vehicle buffet was coupled the explosion

of the internet, which made vehicle-related information readily accessible to

consumers. Internet-informed and empowered consumers now wanted a vehicle that

was ―personalizable,‖ inexpensive, reliable, and quickly obtainable. Consumers

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desired vehicles that were less harmful to the environment, which led to the

introduction of hybrid vehicles by Japanese automakers in the late 1990s.

In the last decade, the recent trend of increasing sophistication and empowerment

of the consumer has led automakers to identify new and more specialized markets

within saturated markets with diverse customer bases, such as that of the U.S.

Another trend is to infiltrate new emerging markets such as Southeast Asia and Latin

America, which has further motivated the establishment of production facilities

overseas and the establishment of global alliances and commercial strategic

partnerships with foreign automakers. Of these new markets, China appears to be

the most promising.

Comparison of Basic Features in Three Major Automobile Market

Characteristi

cs US Market European Market

East and South East

Asian Market

Industry

Characteristi

cs

Organizational

and technological

change is the key

characteristics of

the US industry.

Of late, steps are

taken to increase

its global

presence by

expanding global

alliances and

seeking greater

collaboration with

other U.S.

automakers.

Productivity is

more than EU but

The European

automotive market is

comprised of a

concentrated and

sophisticated global

network, which

includes joint-ventures,

cooperatives,

productions and

assembly sites. Like

USA, over capacity,

intense competition

and investment for

technology are general

features. The industry

is driven by MNCs

mainly located in

East Asian market is

mainly driven by

Japanese FDI. Apart

from this, state

sponsored initiatives are

observed in Korea Rep.,

China, etc.

These countries are

making attempt to

develop indigenous auto-

industry base. Others

are driven by MNCs.

Profitability in the

industry is relatively

more than EU

48 | P a g e

less than Japan. Western Europe.

Market Share

Ford, GM and

Chrysler makeup

approximately 76

% of U.S.

passenger vehicle

production, while

Japanese

automakers,

Toyota, Honda,

Nissan,

Mitsubishi,

Subaru, Isuzu

represents 18 %,

and European

automakers, BMW

and Mercedes

(division of

Daimler-make up

nearly 2%. )

The EU's largest

automotive producer is

Germany estimated at

30 % of EU's total

production, followed by

France at 19 % and

Spain at 17 %, and the

United Kingdom at 10

% The largest

automakers producing

multiple brands, such

as General Motors,

Ford, Daimler Chrysler,

Volkswagen, Fiat and

Peugeot Citroen. There

are also independent

automakers, such as

Porsche, BMW and

Bertione.

In Japan Toyota, Honda,

Nissan, Mazda etc

dominate the market. In

Korea Rep, Hyundai

acquired Kia and Asia

Motors in 1999, and sold

10 % of its equity to

DaimlerChrysler in 2000;

Daewoo purchased 52 %

equity in Ssanyong in

1998; and GM

purchased 42 % equity

of Daewoo; and in 2000,

French automaker

Renault purchased

Samsung Motors. In

ASEAN region, Toyota,

Hyundai, Suzuki, GM are

major players.

Demand

Pattern

(Domestic

and export)

The US producers

mainly produce for

domestic market

and to some

extent for

Canadian market.

Canada is the

largest market for

U.S. vehicle

exports with

subsidiaries of

U.S. automakers

Consumer demand is

the driving force for

industry in EU. More

models, shorter life-

cycle is the key of

demand pattern which

is similar to USA. New

EU members show an

increasing demand and

many Companies

shifting some of their

production base to

Asian market is growing

relatively slowly but

steadily in post-financial

crisis period. Asia's three

core markets are Japan,

Korea and China. South

East Asian markets are

also growing rapidly. The

compound average

growth rate in ASEAN

countries is expected to

be in the order of 10 to

49 | P a g e

accounting for

most of the

imports. The US

big Three

continues to

invest in Canadian

market.

these countries. EU is

gaining through

exporting high value

services such as

design and

engineering. Europe's

bus and truck market is

stronger than Asia

dominated by players

like Volvo, Scania and

Mercedes.

20 percent until 2010; 10

percent in India; and only

4 percent to 8 percent in

PRC; Korea; or Taiwan,

China. In 2010, Japan's

demand will be around

1/3rd of total East and

SE Asian demand.

Korea, Thailand play

major part in exporting

vehicles. AFTA is

expected to increase the

regional export Market

Contribution

to Economy

Motor vehicle

production

represents over 5

% of the U.S.

private sector

GDP in 2002

The automotive

industry represents

approximately 9 % of

the EU manufacturing

sector

In Japan industry

represents 13 % of its

total manufacturing

output and 10 % of

employment. South

Korea is exporting 41 %

of its total motor vehicle

production. It contributed

around 3.7% to GDP in

1999.

Micro Environment

CONSUMERS

Consumers are the main target which needs to be understood and satisfied in the

market. Their purchasing behavior will most likely be an impact affecting an

organization in several unprecedented ways. It is important to understand their

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mindset patterns of purchasing a family car, the basic pattern includes affordability,

fuel efficiency, safety and comfort giving the consumer a mood of acceptance and

appreciation. The main focus of the Nissan will be the low level car owners and low

income consumers. It will also target product to bike owners as they are very unsafe.

COMPETITORS

With strong economic growth and government relaxation on taxes, several

companies are emerging to establish their market position Direct - competitors are

Toyota and Suzuki which have substantial market share.

INTERMEDIARIES

Volkswagen will adopt both distribution channels, direct and indirect. Intermediaries

(i.e authorized dealers of Volkswagen) are important, since indirect distribution of its

product is carried out through them. This will help to further enhance the reach-ability

of the car.

PUBLICS

Publics are the general public who are involved in the reputation of Volkswagen and

its products. Volkswagen has to provide several strategic approaches in order to

stand out with the public opinions. Any critics against Volkswagen would impact the

sales and repute. With such diverse culture, consumers are highly deterred with

public opinions. This very thin line, the public offers, can effect production,

distribution and diversification of Volkswagen. Volkswagen will have to stand out in

their primary objective and not lose that position.

Macro Environment or PESTLE Analysis

DEMOGRAPHIC ENVIRONMENT

Education

The literacy rate of the country is increasing and as a result it has increased the

consciousness in people about safety and quality of travel. People are now more

sensitive about how safe and comfortable is the automobile they are using. With the

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increased awareness in people they have now shifted towards the automobiles

which are according to safety standards and give more comfortable travel.

Population

Population of India is growing at a fast pace and is 240 million . This increase in

population has also increased the number of buyers and expanded the market of

automobiles. Requirement of more automobiles has grown. Automobile industry has

also responded to this scenario. But there is still a huge gap between people

demand and supply of cars. Volkswagen focuses on this gap and is trying to avail

this opportunity to its best.

ECONOMIC

With the rapid growth of national economy purchase power of people has also

increased. Also the priorities have changed a lot. The affordability of cars has

improved and this resulted in huge increase in the sales of cars. This provides

Volkswagen an opportunity to jump into market with strong impact and grab a major

share in automobile industry.

TECHNOLOGICAL

Rapid improvement and advancements in technology impacts the automobile

industry a great deal. It impacts the manufacturing, assembling and furbishing of

automobiles. New technological advancements pace up the operations; results in

more rapid production of cars. Technological improvements also impact

Volkswagen‘s operations a great deal and forces towards technological shift. Nissan

keeps on improving its technological structure with time and has to continue its

strategy of regular improvements.

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It makes it clear that the Indian automobile industry has a lot of un-extracted

potential. Looking at some important indicators it is implied that the growth in this

industry is here to stay for the times to come.

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Some growth forecasts for Indian auto industry

The Passenger Vehicle market of India will even cross Japan by selling about

5 million Vehicles by 2017-18.

The Indian auto exports will be upto $5.62 billion in the year ending March

2011 and the same will grow to $17.64 billion in 2015-16.

India‘s share in global auto exports may also triple by 2016.

India‘s passenger vehicle production projections :

a) In 2010 – 2.6 million Vehicles

b) By 2015 – 5.1 million Vehicles

c)By 2020 – 9.7 million Vehicles

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The above Information gives us a clear cut understanding about the potential that

India has in terms of the future of Automobiles in this country.

Market Share

At present major Indian, European, Korean, Japanese automobile companies are

holding significant market shares. In commercial vehicle, Tata Motors dominates

over 60% of the Indian commercial vehicle market. Tata Motors is the largest

medium and heavy commercial vehicle manufacturer.Car manufacturers in India

dominate the passenger vehicle market by 79%. Maruti Suzuki is the largest car

producer in India and has 52% share in passenger cars and is a complete monopoly

in multi purpose vehicles. In utility vehicles Mahindra holds 42% share. Hyundai and

Tata Motors is the second and third car producer in India

The automobile Industry in India is now working in terms of the dynamics of an open

market. Many joint ventures have been set up in India with foreign collaboration, both

technical and financial with leading global manufacturers. Also a very large number

of joint ventures have been set up in the auto-components sector and the pace is

expected to pick up even further. The Government of India is keen to provide a

suitable economic, and business environment conducive to the success of the

established and prospective foreign partnership ventures. $5.7 billion is the

investment envisaged in the new vehicles projects.

Five Forces Industry Analysis

The Bargaining Power of Suppliers

The two main components in the supply chain for auto manufacturing are

steel and aluminum. The aluminum industry is fairly concentrated with four

companies holding a majority of the market share, around 50%. The steel industry is

somewhat broader with the four top companies possessing 30% of the market share,

the leader holding only 8% (Datamonitor: Global Steel).

Within both the steel and aluminum industries there is little differentiation of

inputs, due to the nature of the raw material. However, these inputs are critical to

58 | P a g e

the success of vehicle production. There are minimal substitutions for these

materials, mainly interchanging the two types. When substituting these materials, a

firm will encounter high unavoidable costs. Substituting one raw material for the

other increases costs because the two metals require different handling techniques

(Datamonitor: Global Aluminum). All of these elements increase the bargaining

power of suppliers.

Last, the auto industry holds a significant portion of this raw material market.

Auto manufacturers hold 15% of the iron and steel market and 24% of the aluminum

market (IBISworld: Aluminum). This factor significantly decreases supplier

bargaining power. Overall, we conclude that the suppliers have moderately high

bargaining power in the auto manufacturing industry.

The Bargaining Power of Buyers

Buyers in the automotive industry are new car dealers. In India, the top four

new car dealers hold only 14% of market share (IBISworld: Vehicle Wholesalers).

Autos are highly related to the buyer‘s success and extremely price sensitive. The

wholesalers value their relationship with dealers because the latter can influence the

marketing of the product. This results in a stronger bargaining position of the buyers.

Buyer knowledge also plays a role in increasing power due to the growth of widely

available vehicle information.

It is difficult for buyers to purchase perfect substitutes from different

companies. Dealers can purchase different products within the same segment, but

supply of specific models is limited to the manufacturing company. This limits ability

of buyers to incite bidding competitions between suppliers. Overall, the bargaining

power of buyers is relatively low due to the high number of dealers in the industry,

regardless of their value to wholesalers and increased knowledge.

Threat of Potential Entrants

High barriers to entry discourage potential competitors from joining the

automobile manufacturing industry. In order to benefit from economies of scale

there are elevated costs associated with developing high volume inventory, which in

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turn deters new entrants. Another factor is that automotive manufacturers are

required to comply with increasing environmental regulations, requiring substantial

investment in research and development. Even within a smaller competitor in the

Indian market, like Volkswagen, spending on R&D falls between $.5 million and $1.5

million annually. The combination of these factors results in a very low the threat of

potential entrants.

Threat of Substitute Products

Some of the substitutes for automobiles include public transportation,

motorcycles and bicycles, all of which are significantly lower in price. Performance

of these substitutes can be measured by convenience and reliability. Public

transportation can be more convenient than automobiles due to traffic constraints

and/or limited parking. Motorcycles and bikes also offer this convenience due to

increased maneuverability and their compact size. Switching costs of substitutes

can be low but could pose inconveniences such as selling a car or other mode of

transportation. Despite all of the benefits of substitutes, consumers continue to be

loyal to the automotive industry. As usage of these substitutes has been increasing,

so has the demand for automobiles, resulting in a very low category threat

assessment.

Rivalry Among Existing Firms

The automotive industry consists of fewer than ten major competitors. The

industry continues to grow (2006 saw greatest revenue growth in nearly a decade),

while operations rely on high levels of capital investments, resulting in high fixed

costs (IBISworld: Vehicle Wholesalers). Exit costs and barriers are also high, all of

which increase rivalry among firms. Rivalry is increased again through low buyer

switching costs. There is also little brand loyalty in the majority segments of the

industry, forcing producers to compete largely on price. This means that producers

continually compete for market share, and rivalry is high in the automobile

manufacturing industry.

Overall Assessment

In the automobile industry, the bargaining power of suppliers, threat of

potential entrants, and threat of substitute products is low. These forces can be seen

60 | P a g e

as opportunities for higher profits. Supplier power is moderately high and rivalry

among existing firms is high. These threats are difficult to work around and reduce

profits. The major issues facing the industry are factors influencing the costs of raw

material inputs and the economic environment.

Industry Segmentation and Demand Issues

The automobile industry is segmented primarily into four main categories,

small, midsize, luxury and sport. The largest segment of the market is midsize

vehicles, which accounted for 48.3% of US sales in 2006 (IBISworld: US Automobile

Manufacturing). Overall sales in the automotive market declined slightly in 2012 and

industry analysts are saying 2013 could signal another year of decline (Road

Ahead). Sales remain strong in India in spite of these challenges, which presents an

opportunity for Volkswagen to appeal to the shrinking market demand for domestic

vehicles and increase their market share.

The market for automobiles is segmented into three purchasing groups:

households, corporations and government. Households make up about 73%,

corporations represent about 17%, with the US government purchasing 10% of

vehicles sold. The majority of discretionary vehicle purchases come from

households. Demand from this group tends to vary with economic fluctuations more

than the corporate and government market segments.

Volkswagen is the leading car manufacturer in Western Europe, but has yet to

take hold of a significant market share in India Marketing at VW is focused on

younger generations. They project a strong brand image of a distinctive, fun to drive,

import vehicle. Through their image development they have managed to appeal to

younger customers more so than many of their European competitors. The price

range of Volkswagens is also more suited to younger individuals and families,

surpassing the idea that European comfort is only for the wealthy. Volkswagen sales

have been partially limited in India by maintenance and reliability issues. However,

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their strong brand identity could help them gain more market share in the US if these

problems can be mitigated and new customer segments reached.

Internal Resources

One of Volkswagen's main strengths lies in its presence in the Western

European market. They own the largest share of this region at nearly 20%, followed

by French-based PSA (13.3%) and Ford (10.8%). VW is also the market leader in

Brazil (24%), Argentina (27.1%) and South Africa (22%). These impressive numbers

help enhance the brand image while also bolstering confidence among investors.

The VW brand also gains strength from its impressive portfolio, which includes high-

end automotive names Audi, Lamborghini, Bentley and Bugatti. Specific

Volkswagen models such as the Beetle, Golf and Jetta are also highly recognizable

names among consumers. This diverse group provides VW with stable revenues

while presenting opportunities to move into new markets (Datamonitor - Volkswagen

AG).

Volkswagen also operates 32 production plants across the globe. The

flexibility of these plants is a major asset, allowing them to produce products from

multiple brands in one location. A global production network will help reduce costs

while making it easier to respond to fluctuations in demand and dynamic market

trends.

Volkswagen's glaring weakness resides in the United States. Their market

share in the US pales in comparison to their performance in the rest of the world. In

the light vehicle and passenger car category, VW holds about 1.4% of the US

market, as mentioned earlier. This unimpressive figure brings their portion of the

global market down to 9.7%, trailing General Motors, Toyota and Ford. Within the

US, Volkswagen does business mainly in the sedan sector, and is almost

nonexistent in minivans, SUVs and pickups. In addition, the company had to

recently recall some of their vehicles due to defective ignition coils.

Another disadvantage of VW is their less-than-stellar profit margins. Their

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average margins for the 2002-06 periods stood at 2.3%, well behind their Japanese

counterparts Honda (8%), Toyota (9.1%), and Nissan (9.1%). Net profit margins

were also lower than the competition during the same period. Volkswagen stood at

1.6%, whereas Honda, Toyota and Nissan were at 4.7%, 5.9%, and 4.5%

respectively. These weak operating margins are due largely to high labor costs and

operating inefficiencies (Datamonitor – VW AG).

Another success factor grid was done using characteristics that consumers

(drivers) look for in a car company. These factors include, along with their weighted

value, price of vehicles (.25), quality of vehicles (.25), vehicle safety (.25), cost of

ownership (.2), and style/look of vehicles (.05). Once again, Toyota came out on top

as the overall leader, almost an entire point ahead of the nearest competitor.

Volkswagen, once more, was not able to separate itself as a clear leader in any

category . Our ratings for each category were based on company safety ratings,

passenger car prices and a small survey of car owners. Volkswagen did rate high in

overall style of their vehicles, even though it was not the leader among their

competitors, giving them the opportunity to possibly gain ground in the US market

with continued innovative designs. Obviously, though, it will require much more than

a chic look to build VW‘s US customer base.

Opportunities in the Industry

After a thorough review of the automobile industry, it is apparent that each

company has its own lines of cars that fit a particular segment in the industry. What

might not be as apparent is that Volkswagen is the last large automobile

manufacturer that does not have a hybrid vehicle on the US market. Hybrid vehicles

are becoming increasingly popular with the growing concern for the environment.

Toyota exceeded the one million mark for hybrid vehicle sales in 2007, according the

company. Their popular Prius has been on the market for ten years and has set the

benchmark for future hybrid vehicles: ―Sales of Toyota hybrids climbed from just

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18,000 in 1998 to 312,500 last year (‘06), according to the company‖

(academic.mintel.com).

Developing a hybrid model is in Volkswagen‘s best interest because

consumers are changing their opinions on vehicle feature necessities. With ever

increasing gas prices, consumers are buying more efficient cars that fit their

everyday needs. Volkswagen can use their already formidable global market share

and integrate hybrids to bolster their lagging US share. As they are one of the last

brands to utilize the popular technology, VW will find themselves losing more and

more ground with each passing year. The future is alternative power and if

Volkswagen does not join the revolution the company will be the left only crumbs as

the hybrid pie is split up.

Conclusion

The average person can't come along and start manufacturing automobiles. The

emergence of foreign competitors with the capital, required technologies and

management skills began to undermine the market share of many automobile

companies. Rather than looking at the threat of someone buying a different car,

there is also need to also look at the likelihood of people taking the bus, train or

airplane to their destination. The auto industry is considered to be an oligopoly. Many

suppliers rely on one or two automakers to buy a majority of their products. If an

automaker decided to switch suppliers, it could be devastating to the previous

supplier's business. The bargaining power of automakers are unchallenged.

Consumers are very price sensitive, they don't have much buying power as they

never purchase huge volumes of cars

Indian automobile industry has achieved splendid achievement in the recent years.

India is on the peak of the Foreign Direct Investment. The attractiveness of the

Indian markets on one hand and the stagnation of the auto sector in markets such as

Europe, US and Japan on the other have resulted in shifting of new capacities and

flow of capital to the Indian automobile industry. India is a significant manufacturer of

automobiles and auto-parts. Global auto majors such as Japanese auto majors

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Suzuki, Honda and Korean car giant Hyundai are increasingly banking on their

Indian operations to add weight to their businesses .The car industry would see a

massive capacity building in low-cost locations like India as manufacturers shift base

from developed regions. Although the sector was hit by economic slowdown but it

doesn't effect the overall production of automobiles. In recent times, India has

emerged as one of the favourite investment destinations for automotive

manufacturers. The Indian auto industry is likely to see a growth of 10-12 per cent in

sales in 2010.Competition in the country's auto sector is likely to increase due to

increasing penetration of global original equipment manufacturers

Market/Product Matrix

At VW each of our individual products (Jetta, Vento, Passat,) serve different

markets dictated by the automobile industry. The industry classifies autos based on

size and style. We use these classifications as the title for our markets. At VW we

are mostly concerned with the Subcompact, Midsize, Sporty Coupe, and Van

markets. Two of our passenger cars fit into the Subcompact market. This is the

Jetta. Within this market our product caters to a mostly urban, young and usually

college educated crowd. In the Midsize market we have the Passat. This customer

is a little bit older but still in an urban setting.

Volkswagon‘s market share of the entire industry is just over 2%. Which

means that each of its cars will not have a very large share in their individual

markets. The Passat and the Jetta sell very well and actually have relatively large

shares in their perspective markets. As well as these cars do they are meager in

comparison to some of our competition.

One of our competitors is Honda. Honda competes in all of the markets we

do and more. The Honda Accord is in the midsize market and has a huge share of

the market. This kills the Passat, our midsize car that came in at 32 (mavel.com).

VW and Nissan both are competing in some of the same markets. VW and

Nissan share interests in the Subcompact, Midsize and maybe the Van market.

While Toyota has eight markets that serve our competitors and seventeen models of

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cars to select from. They differ from Volkswagen by having the sporty, full-size,

truck, and SUV models. Toyota, like Honda, has a much greater piece of the pie

than does VW.

One of the larger competitors for VW is Ford. Ford is a powerhouse in the

automotive industry, and is a direct competitor to VW, with only a few of its market

segments.

Even though these two cars fall under the same category, they vary

considerably. When comparing Ford and VW market segment Ford is far superior

the VW. They offer more segments, and contain a larger market share in all the

automobiles made compared to Volkswagen. Ford has been selling in the United

States since the early 1900‘s, Where as Volkswagen didn‘t really start to compete

until 1980‘s.

By comparing Volkswagon to some of the bigger companies in the auto

industry it is obvious that VW has a very small portion of the market in just about any

segment in which it competes. This is important to note when plugging VW‘s product

into the BCG Matrix, which evaluates products based on market share and the

growth of the market.

We know that market share is relatively small, but what about growth? In the

Sporty Coupe segment numbers for the industry are way down. Combine that with a

small market share for the Beetle and we have a Dog. The midsize and Sub

Compact segments are up in growth and the Jetta and Vento are both selling very

well. Based on interpretation of market share these could be classified as either a

Star or Problem Child.

SWOT & TOWS Analysis

Volkswagen (VW) was chosen because it demonstrates how a successful company

experienced great difficulties in the early 1970s, but then developed a strategy that

resulted in an excellent market position in the late 1970s. The TOWS Matrix shown

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in Figure 1 will focus on the crucial period from late 1973 to early 1975. The external

threats and opportunities pertain mostly to the situation VW faced in the United

States, but a similar situation prevailed in Europe at that time.

Weaknesses and Threats (WT)

A company with great weaknesses often has to resort to a survival strategy. VW

could have seriously considered the option of a joint operation with Chrysler or

American Motors. Another alternative would have been to withdraw from the

American market altogether. Although in difficulties VW did not have to resort to a

survival strategy because the company still had much strength. Consequently, a

more appropriate strategy was to attempt to overcome the weaknesses and develop

them into strengths. In other words, the direction was toward the strength-opportunity

position (SO) in the matrix shown as Figure 1. Specifically, the strategy was to

reduce the competitive threat by developing a more flexible new product line that

would accommodate the needs and desires of the car-buying public.

Weaknesses and Opportunities (WO)

The growing affluence of customers has resulted in 'trading up' to more luxurious

cars. Yet, VW had essentially followed a one-model policy which presented a

problem when the design of the Beetle became obsolete A new model line had to be

introduced to reach a wider spectrum of buyers. In order to minimize the additional

costs of a multi product line, the building block principle was employed in the design

of the new cars. This allowed using the same parts for different models that ranged

from the relatively low-priced Rabbit to the higher priced Audi line.

Another weakness at VW was the rising costs in Germany. For example, in 1973

wages and salaries rose 19 per cent over the previous year. Similarly, increased fuel

costs made the shipping of cars to the United States more costly. This situation

favored setting up an assembly plant in the United States. However, this also

created some problems for VW because it had no experience in dealing with

American organized labor. To overcome this weakness, VW's tactic was to recruit

managers from Detroit who were capable of establishing good union relations.

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Strengths and Threats (ST)

One of the greatest threats to VW was the continuing appreciation of the Deutsche

Mark against the dollar. For example, from October 1972 to November 1973 the

mark appreciated 35 percent. This meant higher prices for the buyer. The result, of

course, was a less competitive posture. Japanese and American automakers

obtained an increasingly larger share of the small-car market. To reduce the threats

of competition and the effects of the unfavorable exchange rate, VW was forced to

build an assembly plant in the United States.

Another strategy for meeting competitive pressures was to build on VW's strengths

by developing a car based on advanced-design technology. The result of this effort

was the Rabbit, a model with features later adopted by many other car

manufacturers.

The oil crisis in 1973-1974 not only caused a fuel shortage, but also price rises, a

trend that has continued. To meet this threat, VW used its technological capabilities

not only to improve its engines (through the use of fuel injection, for examples), but

also to develop the very fuel-efficient Diesel engine. This tactic, which was congruent

with its general strategy, helped improve the firm‘s market position.

Strengths and Opportunities (SO)

In general, successful firms build on their strengths to take advantage of

opportunities. VW is no exception. Throughout this discussion VW's strengths in

research, development, engineering, and its experience m production technology

became evident. These strengths, under the leadership of Rudolf Leiding, enabled

the company to develop a product line that met market demands for an economical

car (the Rabbit, successor to the Beetle), as well as the tastes for more luxurious

cars with many available options (Scirocco and the Audi line). Eventually the same

company's strengths enabled VW to plan and build the assembly facility in New

Stanton, Pennsylvania. Thus, YW could benefit from substantial concessions

granted by the state government to attract VW which, in turn, provided many

employment opportunities.

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In another tactical move, VW manufactured and sold small engines to Chrysler and

American Motors. These companies urgently needed small engines for installation in

their own cars and revenues from these sales improved the financial position of VW.

Location Of Factor

Type Of Factor Type Of Factor

Favorable Unfavorable

Internal Strengths Weaknesses

Strong Brand Portfolio

Strong Focus on research and development

Robust Production Capabilities

Sluggish Performance of the company in few geographical areas

Relatively Low employee productivity

Poor Cash Flows

External Opportunities Threats

Accelerating Global Demand

for vehicles

Increasing demand for Hybrid electric vehicles

Growth potential in India and

China

Global Recession in 2009

Weakening of Global

automotive industry

Environmental Protection Regulations

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Figure 1: VW TOWS Matrix

Internal Strengths: Internal Weaknesses:

1. Strong R & D and Engineering

1. Heavy Reliance on One Product (Although Several Less Successful Models were Introduced)

2.Strong Sales and Service Network

2.Rising Costs in Germany

3.Efficient Production/Automation Capabilities

3.No Experience With the Labor Unions if Building Plant in other countries

External Opportunities: SO: WO:

(Also Consider Risks)

1.Growing Affluent Market Demands

1. Develop and Produce Multiproduct

1. Develop Compatible Models for

More Luxurious Cars with Many Options

Line with Many Options, in Different

Different Price Levels (Ranging from

Price Classes (Dasher, Scirocco, Rabbit,

Rabbit to Audi Line)

Audi Line)

2.To Cope with Rising Costs in Germany, Build Plant in U.S. and other countries, Hiring Managers with Experience in Dealing with Labor Unions

2.Attractive Offers to Build an Assembly Plant in U.S. and other countries

2.Build Assembly Plant Using R & D, Engineering, and Production/Automation Experience

3.Chrysler and American Motors Need Small Engines

3.Build Engines for Chrysler and AMC

External Threats: ST: WT:

1. Exchange Rate: Devaluation of Dollar in Relation to Deutshe Mark (DM)

1. Reduce Effect of Exchange Rate by Building a Plant in the U.S. or any other country

A. Overcome Weaknesses by Making Them Strengths

2.Competition from Japanese and U.S. Automakers

2.Meet Competition with Advanced Design Technology

1.Reduce Threat of Competition by Developing Flexible Product Line

3. Fuel Shortage and Price

3.Improve Fuel Consumption Through Fuel Injection and Develop Fuel Efficient

B. Possible Options not Exercised by VW:

1.Engage in Joint Operation with Chrysler or AMC

2.Withdraw From any foreign land

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Costing & Pricing analysis of brand portfolio in India

Pricing

Pricing of automobiles is a complex issue as it is dependant on fixed cost,

economies of scale, technology and other aspects. Competition and consumer

demand also play important role in this. Currently, most of the automobiles

companies consider price reduction as major strategic move for survival. For price

reduction, companies need to take series of decisions at every stage of production

and selling; starting from managing factors of production and supply chain to

negotiation with dealers. Price is one of the factors that influences sales variability of

products and services significantly.

Companies require appropriate policies to be played intelligently for managing the

series of decisions. Interestingly, reducing prices does not always generate profits. It

should be in combination of other decisions regarding maintaining quality and

marketing of the product. One undesired consequences of considering price

reduction as the main means of obtaining customers, is attracting disloyal

customers, who are attracted by the offer but do not see any other value in the

company. Their life-cycle in the end is short, and they receive a much greater return

from the company than the company can even make up the cost for obtaining them.

Many companies take strategy of different pricing policies for different product

segments of the considering the expected value to the customers through the offered

products. Companies develop innovative strategies to maximize profits without

hurting customers. Pricing is adjusted to the qualities, purchase volume,

development potential, and loyalty and profitability factors.

As the fixed cost is very high, companies look for different models from same

platforms and decide about the total output of each model. The wide range of

outputs along with the degree of economies of scale drive down the average cost of

production. If the auto makers are basing price on average costs, expected

deviations in output in the short run (between model years) could significantly affect

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prices without any change in factor costs. Moreover, higher the fixed costs as a

proportion of total costs, the more sensitive is short run marginal cost to changes in

the costs of the of variable factors of production (for example sudden rise in prices of

steel or rubber). Thus the low proportion of the variable costs in the auto industry

would make short run marginal costs especially sensitive to variable factor price

changes. If firms are short-run profit maximizes prices should respond positively to

changes in variable factor costs (Hoffer, et al. 1976).

In most of the countries, automobile sector is identified to have monopolistic market

(in some countries it is oligopolistic) structure where many players compete for

market share with significant amount of product diversification. As a result of this, in

the long run, most of the players earn zero normal profit and in the short run super-

normal profit. Hence, competition in the short run is intense particularly when product

life-cycle is very short. Moreover, within segment the nature of competition

sometimes is oligopolistic as the number of models under one segment may be

limited in a model year.

Volkswagen Cars

Volkswagen offers 5 new car models in Luxury segment, 1 in Midsize segment, 1 in

Small segment in India. Choose a Volkswagen car to know prices, features, reviews

and photos.

Car Model Avg Ex-Showroom Price

Volkswagen Polo

Rs. 4,80,330

Volkswagen Vento

Rs. 7,28,360

Volkswagen Jetta

Rs. 13,75,475

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Volkswagen Beetle

Rs. 21,47,649

Volkswagen Passat

Rs. 22,25,913

Volkswagen Touareg

Rs. 58,09,445

Volkswagen Phaeton

Rs. 77,20,507

Consumer Behavior elements related to the brand and history of brand ambassadors

and their description.

Consumer Behaviour elements

Type of purchase decision

Automobile industry has a number of producers already in market including

Volkswagen, Volkswagen next will introduce a new image of the company and will

most likely attract consumers as it will be a customized model for the people. Since

any consumer will be a long lasting relationship, it is important that it stands out in

front of its competitors and has a competitive edge. There will be high involvement of

user as it has to make a big purchase decision and also there are competitors like

Suzuki and Toyota etc. giving services to people; so this purchase behavior will be

categorized as Dissonance-Reducing Buyer behavior.

Consumption – Consumer Response

Commute has become a necessity and more roads infrastructure has been

established. More people are interested in purchasing as their needs and interests

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increases. As competition is on the rise so public is more informed about cars. They

are more conscious about the safety and economic features of the car. This

awareness and consciousness is increasing the buying and there is already a gap in

market so production of Volkswagen next will be tremendous.

Quality ,Comfort and safety

Volkswagen has an international image in local market & public mind stands on

good grounds when considering Quality, comfort and Design. The new image will

provide a new quality, price and comfort pattern which will be very favorable to

consumers. Since consumers relationship is going to last, it is important that these

variables are constantly improved. Volkswagen next will be affordable most of all,

and safety should be first priority so that the consumer‘s first impact would be that

this is a car for my family. Design will be unique from the rest of its competitors and

will be designed after evaluating customer buying patterns.

Customer Awareness and Brand Switching

Since this is a high value purchase, it is most likely that the brand loyal consumers

are loyal to the company and believe that the Volkswagen products are much better

than others. The new car will attract our existing customers as it will contain

additional unique features. Volkswagen next aim is to capture the new market of its

level and provide its existing customer a new opportunity to experience a new ride

experience. Volkswagen will provide unique differentiated points to create

awareness and presentations proving the consumers the advantages and luxury it

can provide to a small family. With increase in awareness in consumer minds, it is

imperative that safety features are emphasized and provide core values which the

consumers like to see.

Brand Prospects – Location and Influence

In India, 37% of the population is living below the poverty level which be translated

as earning less than $2 a day and about 5% comes in the bracket of elite class.

Therefore Volkswagen next will provide a very different level of customization to

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different locations which will be favorable to low-income families. Most of them travel

by bikes and buses. Volkswagen will introduce a better shift to its new car which is

Compaq, secure and most economical.

Brand Repositioning Campaigns

Brand repositioning campaigns

In the second phase of its branding process, the campaign is an aggressive

effort at corporate branding – an initiative with central positioning of the

mother brand at its core.

In order to strengthen brand Volkswagen‘s

core value, ‗innovation‘, the brand makes

a loud corporate statement through

a country wide campaign titled

‗Innovations for Everyone‘. The movement

was initiated in India on August 18 and will

run till November. ‗Innovation‘ happens to

be one of the three main assets that the

brand stands for; the other two are ‗responsibility‘ and ‗value‘.

Volkswagen (VW), the largest car maker in Europe, sells its broad model range from

the Fox to the Phaeton in more than 150 countries worldwide. The brand currently

offers the Jetta and the Passat, assembled in Aurangabad, for Indian consumers.

Also available on sale are the new Beetle, the powerful SUV Touareg, the Phaeton

and the Polo.

The target group (TG) of this campaign is essentially the young and progressive

urbanite, as well as new age middle class men who fall in the age bracket of 25-44

years. The media activities of the campaign will be concentrated in areas where the

brand‘s 47 (14 at the onset on 2009) dealers are located.

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VW‘s first brand campaign broke in India on November 11, 2009 and was

accompanied by the market launches of the new Beetle and Touareg. Following this,

the Polo was launched in March, while April saw the launch of the Phaeton. It is

noteworthy that since the eye-catching brand campaign in 2009, the brand has

focused primarily on communicating its individual products and has, accordingly,

highlighted the features of each product. The present campaign, however, appears

to be an effort to promote the mother brand, Volkswagen.

Lending a quick word on this corporate communication, Lutz Kothe, chief general

manager, marketing and public relations, Volkswagen India, elucidates, ―Right from

the very old Beetle up until now, we were always the brand that believed in the

democratisation of innovation. Given this, it doesn‘t make sense for us to innovate

only for some of our products; thus the catch phrase ‗innovation for everyone.

Here‘s a few different takes on creative solutions that started small and grew,

trying to inspire you a little bit while you sit at your desk going “so what can we

do”.

Take a chance. Be inspired.

Volkswagen “Fast Lanes”

When you have very little money, I always say “Act Like a Blowfish” and try to find

a way to appear bigger than you really are. That may require more creativity

than dollars. It might mean something a bit odd, compared to the conventional 30

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second TV ad. If you have no money, tell me you couldn‘t have done this one. It

must have cost only $5,000-10,000 to produce, it is one of the simplest ideas ever

and yet they now have 3 Million YouTube hits. Mainly because it just makes

people smile a little bit. And it fits perfectly with the Volkswagen brand.

What‘s your version of this idea on your brand?

Volkswagen: Think Small

Many marketing and advertising professionals like to call this campaign the gold

standard. Created by a legendary advertising group at Doyle Dane & Bernbach in

1960, the campaign set out to answer one question: How do you change peoples'

perceptions about not only a product, but about an entire group of people?

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Americans always had a propensity to buy big American cars, but even 15 years

after WWII ended, Americans really didn‘t buy small German cars. So what did this

Volkswagen advertisement do? It played right into the audience‘s expectations. You

think I‘m small? Yeah, I am. They never tried to be something they were not -- and

that's the most important lesson we can learn from this campaign. Don‘t try to sell

your company, product, or service as something it‘s not. Consumers appreciate

honesty just as much as they appreciate hot girls in beer commercials.

The ad stands out because this isn‘t what ads are supposed to be like in 1960. It‘s

neither splashy nor dreamy; it has none of those familiar ad images of folks laughing

and frolicking, women‘s hair blowing in the breeze, gorgeous scenery—all those too-

good-to-be-true images that were associated with ads at the time. Moreover, the ad

seems to be speaking a new language: it‘s more straightforward and down-to-earth

than ad copy is supposed to be, but at the same time, it‘s also smarter, sharper, and

more clever.

Just from reading the ad, you feel like maybe you get some sense of the people who

made it, as well as the people who made the car. They‘re not like everybody else;

they seem to be zigging while all others are zagging—which is kind of the way you

see yourself. In a time of conformity and ―keeping up with the Joneses,‖ this ad is

about going your own way. You may or not buy this car, but there‘s something going

on in this ad that you‘re connecting with, and that you might want to be part of.

The Volkswagen ―Think Small‖ campaign is widely recognized as the ad that helped

launch advertising‘s creative revolution of the 1960s. But I think it was something

else, too. It may well have been the first time a marketer successfully launched a

movement behind a brand.

Mind you, it was clearly different from some of the more modern marketing

movements—for one thing, it was much simpler in terms of how it communicated

with the public. Obviously, VW‘s ad agency, Doyle Dane Bernbach (DDB) couldn‘t

use Facebook or Twitter or any of the other marvelous social networking tools that

are now so integral to launching movements; it relied on a series of striking print ads,

some very memorable TV commercials, and a billboard here and there.

But even if VW and DDB weren‘t wired and digitally networked at the time, they did,

nonetheless, have a good ear to the ground. And that enabled them to pick up the

early rumblings of something that was just starting to build at that time—a vague

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dissatisfaction with 1950s consumerism and the prevailing ―bigger is better‖ mindset

about cars. The 1960s counterculture had not yet taken hold, but there was a

restlessness out there—which no one in the mainstream culture had really

expressed prior to this—about big fins and gas-guzzling Cadillacs, and what all of

that represented.

Dominik Imseng, the author of THINK SMALL, a book about the famous ad, notes

that there was something ―un-American‖ about it (and not just because the car was

made in Germany). ―In a way,‖ Imseng says, ―‗Think Small‘ was Ginsberg‘s HOWL

from 1956 as an ad—objecting to the consumerism and materialism of the American

Way of Life.‖

Julian Koenig, one of the ad‘s original creators, said that part of the idea he was

trying to convey was that in buying a Volkswagen, ―You could take an inverse delight

in not having to keep up with the Joneses—in not responding to Detroit‘s planned

obsolescence, in not being part of that repetitive, competitive culture.‖

Certainly, America was ready for an alternative in terms of car choices, and the

Volkswagen Beetle offered that alternative. But a product by itself does not a

movement make. People tend to gather and rally around ideas, and usually those

ideas have to be expressed in a certain way to get folks fired up. This is the reason

why social movements are often associated with iconic images, symbols, or flags; it‘s

also the reason why many movements develop rallying cries, phrases and words

that come to mean something very deep to the people within the movement.

The Volkswagen campaign was rich in the kind of semiotics that can serve as

shorthand for communicating a radical idea to large numbers of people who are

receptive to it. DDB designer Helmut Krone‘s use of white space in the ―Think Small‖

ad was almost an act of defiance, in advertising terms. Why would an advertiser pay

for that space and then leave it empty? Krone was sending a signal to his audience:

―We don‘t care about ad conventions, and neither do you, so let‘s dispense with

unnecessary imagery.‖ Similar nod-and-wink messages could be picked up from the

way the car was depicted in the ads (shrunken down and off-center; in one ad, Krone

even showed the car dented!). Along with the understated style of the copy, it all said

to the ad‘s audience, ―There‘s something going on here, not just in this ad, but in the

culture. Do you get it? Are you part of it?‖

Those who could tune in to those messages, who understood the cultural changes

that VW was talking about and agreed with the basic philosophy behind ―Think

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Small,‖ became the ―true believers‖ of the movement. VW had created a kind of club

to which these people could belong. And those who became part of that club weren‘t

just customers—they were advocates who took up the cause. They came to

embrace VW‘s ideals, identified with the brand, and, in many cases, remained loyal

to it for years and even decades to come.

Why the thinking behind 'Think Small' is still relevant

Today, a half century later, there‘s a lot we can learn from ―Think Small‖—and also

from subsequent groundbreaking campaigns from Apple Computer, Diesel Jeans,

and Dove soap—about how to connect with people in a way that goes beyond just

selling a product. One key point is that for any marketing campaign to go beyond

being just ads and generate something that can credibly be called a movement,

there must be a powerful idea at the core—one that is about a lot more than just the

product you‘re trying to sell. We find one example from (PRODUCT) RED:

THE BIG IDEA

Cause marketing is a partnership between for-profits and nonprofits for mutual

benefit. It offers causes valuable branding and visibility for all concerned.

(PRODUCT) RED‘s goal is to transform the collective power of consumers into a

financial force to help fight AIDS and other diseases in Africa. (RED) is a brand

licensed to partner with companies such as the Gap, Nike, Starbucks, Converse,

Dell, Apple, American Express, and Penguin Classics, among others. These

companies develop their own product(s) featuring the high-profile (PRODUCT) RED

logo, with a percentage of the proceeds going to the Global Fund to Fight AIDS,

tuberculosis, and malaria.

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Volkswagen to reposition Skoda, other brands in India

Aiming to shock and awe: Volkswagen suspended a Vento from a building during its

launch in New Delhi _ Kamal Narang

German automotive giant Volkswagen is undertaking a repositioning for its group

brands in India to align with its global practice, which may see Skoda moving down

in the pecking order.

The group has three brands — Audi, Volkswagen and Skoda — in the Indian market.

Audi is in the luxury segment. Skoda, however, has taken a more premium

positioning compared to the Volkswagen brand, contrary to the group‘s global

practice.

“It’s a question of how different brands are placed against themselves in the

market. Skoda has a quite high position (in India). In the group, Skoda is little

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bit positioned under Volkswagen. So, we are on the way to make a correction,”

Volkswagen Group Board Member and Executive Vice President Ulrich

Hackenberg said.

Currently, the Volkswagen sells seven brands in India — hatchback Polo, sedans

Vento, Jetta, Passat and Phaeton along with SUV Touareg and the iconic Beetle.

Skoda, on the other hand, has five models — hatchback Fabia, sedans Rapid, Laura

and Superb along with compact SUV Yeti.

At present, on a comparative basis hatchback Skoda Fabia is priced between Rs

4.60 lakh and Rs 8.10 lakh, while Volkswagen Polo is tagged at Rs 4.8 lakh to Rs

6.94 lakh.

Similarly, mid-sized sedan Skoda Rapid is tagged between Rs 6.90 lakh and Rs 9.50

lakh compared to Volkswagen Vento which costs between Rs 7.29 lakh and Rs 9.89

lakh.

In the premium sedan segment, Skoda Laura comes for Rs 12.9 lakh to Rs 18.97

lakh, while Volkswagen Jetta is priced at Rs 13.6 lakh and Rs 18.9 lakh.

In the luxury segment, Skoda Superb is available for Rs 18 lakh to Rs 24 lakh (ex-

showroom Delhi), while that of Volkswagen Passat is available from Rs 22 lakh to Rs

27.26 lakh.

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Competitor analysis including market shares and brand

rankings as per interbrand /superbrand etc.

2012 Production Statistics

Country Cars Commercial

vehicles Total

Australia 205,334 38,161 243,495

Brazil 2,828,273 820,085 3,648,358

Canada 968,860 1,102,166 2,071,026

China 13,897,083 4,367,584 18,264,667

Germany 5,552,409 353,576 5,905,985

India 2,814,584 722,199 3,536,783

Japan 8,307,382 1,318,558 9,625,940

Russia 1,208,362 194,882 1,403,244

South Africa 295,394 176,655 472,049

UK 1,270,444 123,019 1,393,463

USA 2,731,105 5,030,338 7,761,443

Daimler

Daimler Chrysler (DCX) was formed in 1998 in a merger of two of the automotive

industry‘s oldest and most prestigious manufacturers: Daimler-Benz AG and the

Chrysler Corporation. This so-called ―merger of equals‖ was the culmination of a long

complicated family history that in some sense follows the history of the automobile

itself. Because of this prestigious history, DaimlerChrysler enjoys a strong reputation

on both sides of the Atlantic.

Today, DaimlerChrysler employs a total of 384,723 people in 17 countries. Their

products are sold in over 200 countries. Daimler Chrysler is the fourth largest vehicle

producer in the world in terms of units sold behind GM, Ford, and Toyota. In 2004,

DaimlerChrysler sold 4,000,700 passenger vehicles and 712,200 commercial

vehicles. The company is structured into three main automotive groups: the

Mercedes Car Group, the Chrysler Group, and the Commercial Vehicles Division.

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These groups are parents to a total of 12 different brands, including Mercedes-

Benz, Dodge, Chrysler, Jeep, the luxury car Maybach, and the compact

environmentally friendly smart car. In all, DaimlerChrysler produces approximately

126 vehicle models.

DaimlerChrysler has been marginally successful in the United States where the

Chrysler Group has recently been the strongest of Detroit‘s Big 3. In fact, during the

third-quarter of 2005, Chrysler was the only Big 3 Company to earn a profit ($379

million for the quarter). This came in spite of a 21% drop in third-quarter earnings by

DaimlerChrysler worldwide due to increasing taxes. However, during this same

period, DaimlerChrysler increased operating profit by 38%. Analysts have attributed

this odd result to increasing demand for Chrysler and Mercedes products. This

increased demand is evidenced in the U.S. market where the Chrysler Group

produces four of the 20 top selling passenger vehicle models: the Dodge Ram, the

Dodge Caravan, the Jeep Grand Cherokee, and the Jeep Liberty.

As a result of this improved third-quarter performance, Chrysler‘s U.S. market share

has risen to 13.3%. More broadly, the popularity of DaimlerChrysler models can be

seen in the steady rise in revenue over the past three years. From 2002 to 2004,

revenue has increased 22.6% from $157 billion to $192 billion.

Because demand for DaimlerChrysler products has remained relatively stable in the

face of increasing oil prices, their future looks relatively bright. Growth in demand for

passenger vehicles is expected to further slow in North America, Western Europe,

and Japan. Therefore, DaimlerChrysler‘s future depends upon successful marketing

in emerging markets across the globe.

* Note: DaimlerChrysler split to form to distinct entities in 2006-2007.

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Ford

Ford Motor Company (F) was founded in 1903 by automotive and industrial pioneer

Henry Ford in Dearborn, Michigan. Being first to implement a moving assembly line

for automotive manufacturing, Ford was able to more efficiently mass produce their

products than their competitors. In 1908 the Model T was introduced and went on to

sell over 15 million vehicles, firmly establishing Ford as the major player in the early

automotive industry with 50% market share by the 1920s. The company went public

in 1956 and since then has grown to be a significant presence in the global

automotive market.

The Ford Motor Company product portfolio includes cars, trucks, and SUVs from the

following brands: Ford, Lincoln, Mercury, Mazda, Aston-Martin, Jaguar, Volvo, and

Land Rover. In addition to its core automotive business, Ford has a finance division,

a parts and service division, and they also currently own Hertz Corporation, the

largest car rental business in the world. Relative to other massive automotive

manufacturers in 2003, Ford was number two domestically and globally (behind

GM), in terms of number of vehicles sold.

Ford‘s outlook is challenging. In the 3rd quarter of 2005, Ford posted a pre-tax profit

loss of over $1.3 billion in their Automotive operations, with a $1.1 billion loss in

North America. The current losses for 2005 are due to a number of reasons: (1)

rising costs of commodities, namely steel and energy, have increased manufacturing

costs considerably; (2) ongoing and rising health care costs, particularly ‗legacy‘

benefits paid to retirees and their families; (3) bailing out major parts supplier Visteon

from bankruptcy; and (4) vehicle sales lagging by 81,000 units compared to the

same point in 2004, in spite of unprecedented ―Employee Pricing‖ sales offered

during summer 2005. Sales are especially lagging in the profitable SUV and truck

markets where demand is dropping due to escalating gasoline prices. This loss is

disappointing given the positive trend seen in net income for the past two years. The

negative net income seen in 2002 was due to the costly safety recall of defective

Firestone tires used on numerous Ford and Mercury trucks and SUVs.

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Ford‘s poor performance in 2005 and dark outlook were reflected in the downgrading

of their credit ratings by both Standard & Poor and Moody‘s to ―junk‖ status in late

spring 2005 - from BBB- to BB+ and Baa3 to Ba1, respectively. The volatility of

Ford‘s stock, in terms of its Beta rating, is in the neighborhood of 1.6 which indicates

that investing in their stock has fairly high risk. In the face of poor performance and

negative trends, significant steps must be taken in the near future to ensure the long

term viability of Ford Motor Company.

Elements of company-wide restructuring have been announced and implementation

begun. Part of the restructuring involves reducing personnel, mostly from white-collar

positions. In more long term restructuring, the company needs to shed over-capacity

in manufacturing. Shedding over-capacity involves closing down and consolidating

manufacturing facilities. These closures are prevented by agreements made with the

United Auto Workers (UAW) through 2007. A key element in Ford‘s success is its

relationship with the UAW and ability to get concessions from the union.

Concessions over healthcare costs, which cost upwards of $2000 per new vehicle

sold, and plant consolidations are required for Ford to be leaner, more efficient, and

more cost-effective in its business.

In addition to organizational restructuring being vital to the future success of Ford,

the company realizes the need to reestablish their market share, particularly in the

U.S. domestic market. They have begun attempts to do this with the introduction of

many new vehicles to freshen and invigorate their product line. Ford has announced

plans to increase its hybrid vehicle production tenfold to 250,000 per year by 2010.

This could be viewed as an attempt to position itself as the domestic leader in the

rapidly growing hybrid market in the U.S.

If the organizational restructuring comes off well and new product offerings are a hit

with consumers Ford stands a good chance to see another 100 years as an industry

leader.

General Motors

After its organization in 1908, General Motors (GM) proceeded to acquire seven

companies by the end of 1909. Today, the company‘s brand names include many of

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the beginning acquisitions including Buick, Cadillac, Chevrolet, GMC, Oldsmobile,

and Pontiac, as well as newer acquisitions and creations including Holden, Hummer,

Opel, Saab, Saturn, and Vauxhall. GM is the largest automobile manufacturer in the

world, selling nearly nine million cars in 2004, which equated to a 14.5% global

market share.

As of the end of 2004, GM reduced its projected earnings for 2005 by over 50% from

previous projections, which reflects its low expectations for the company in the near

future. Investors have also lost faith in the future of GM; the current stock price is

selling at a fraction of the book value. GM‘s debt has been steadily downgraded and

stood at BBB- as of the end of 2004 according to Standard & Poor‘s ratings.

According to their Letter to Stockholders, GM‘s main problems consist of ―global

overcapacity … falling prices … rapidly escalating healthcare costs … unstable fuel

prices … [and] increasing competition.‖

The effects of these troubles can be seen quantitatively through the ratios. GM‘s

debt ratio illustrates that their overall debt nearly equals their assets; their current

ratio shows that they have more liabilities than assets in the upcoming year; and the

return on sales and equity are very low in comparison to industry standards. Each of

the five ratios places GM among the worst three out of the ten sampled companies.

While these ratios in no way provide a complete measure of a company, they do

illustrate that GM is currently struggling to keep up with its competitors.

GM‘s main problem is their failure to remain cost-competitive in the global market. To

address this, GM has reworked deals with both American and European unions

which will reduce its cost of labor. To increase revenues, GM is focusing on

increasing market share in growing countries such as India and China. They are also

offering more hybrids to increase their fuel efficient offerings, which is a fast growing

market in America and has been one of the main ways that foreign manufacturers

have increased their market share in GM‘s primary markets.

It will take some time for GM to become profitable again. In the first three quarters of

2005, GM has seen losses continue to grow well past $1 Billion and their credit

rating has been reduced to junk status.

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However, GM still has the largest market share in the world and the capability to

become successful again. If GM can reign in escalating costs and offer cost-

competitive products, the automobile giant will be in position to once again assert its

dominance of the market.

Honda

Honda Motor Co. (HMC) was established by Soichiro Honda in 1946. It originally

began producing motorcycles in the mid 20th century and began manufacturing

automobiles (the Honda Civic) in 1972. After the original Civic‘s inception, Honda

produced many variants of this highly successful vehicle, such as the four-door

sedan, wagons, hatchback, coupe, and more recently the hybrid. Honda currently

has two automotive brands (Honda and Acura) and it produces over 20 other vehicle

models, such as the Accord, Element, Insight, Odyssey Minivan, Pilot SUV, and

Ridgeline Truck, in addition to producing motorcycles and power products.

Since Honda began producing automobiles it has been a leader in producing fuel

efficient and low emissions vehicles. In 1977 and 1983, Civic models ranked first in

U.S. fuel-economy tests. Honda has also introduced hybrid vehicles such as the

Insight, Civic, and Accord, in 1999, 2002, and 2004, respectively, with the 2006

Insight being the most fuel efficient car of 2006.

Currently, Honda ranks sixth in sales within the automotive industry. They have

overseas plants in over 12 countries including the U.K., Italy, Brazil, Taiwan,

Indonesia, Malaysia, Thailand, Nigeria, U.S., and Canada. Honda has been

increasing their production capacity worldwide in response to their steady growth in

total sales over the last few years. From 2002 to 2003, Honda increased sales by

95,000 units, and from 2003 to 2004, sales increased by 259,000 units. With this

growth in sales Honda has seen a commensurate increase in its revenues (see

Figure 7 in Appendix A). In China, they saw approximately a 50% increase in sales

from the fiscal years of 2003 to 2004, and they expect sales to keep increasing.

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In the future, Honda has stated that they will keep improving the fuel efficiency of all

their vehicles. They will continue to expand their production capacity in Asia, due to

the expected increases in demand in those regions. In the U.S., they plan on

launching new models targeted to younger people to create a new base of loyal

customers. Given Honda‘s past record on delivering high quality and fuel efficient

vehicles, their strong position in the current market, their strategic direction for the

next few years, and the rising costs of fuel worldwide, it is evident that Honda will

have a strong presence in the automotive market in the future.

Hyundai

Hyundai Motor Co. (HMC) was established in Korea in 1967. The company‘s first

model (Cotina) was released, in cooperation with Ford Motor Company, in 1968. In

1998, Hyundai acquired a 51% stake in Kia, but has since reduced its share to 37%.

In 2004, Hyundai was South Korea‘s largest car maker and the world‘s seventh

largest car maker selling 2.3 million units. Hyundai currently offers about a dozen

cars and minivans, as well as trucks, buses, and other commercial vehicles. Some

popular entries in their product lineup include the Accent, Sonata, Tucson, Elantra,

Santa Fe, and Tiburon, which all earned the title ―Best Bet‖ in Jack Gillis‘ The Car

Book 2005.

Hyundai‘s outlook is on the upswing. Hyundai‘s parent company, Hyundai Motor

Group, began investing heavily in the quality, design, manufacturing, and long-term

research of its vehicles starting in1998. This investment paid off in 2004 when

Hyundai tied with Honda for initial brand quality in a survey from J.D. Power and

Associates. Hyundai‘s increase in both quality (named ―Best Value Car Award

Winner‖ – Smart Money magazine 2005) and safety (received ―Automotive

Excellence in Safety Award‖ – Popular Mechanics 2005) along with its low prices will

allow it to continue to grab new market share. Reflecting this trend of low prices and

increased market share, in 2004 Hyundai reported a dramatic increase in annual

revenues to 50.7 billion dollars and only a small gain in net income to 1.78billion

dollars.

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Hyundai‘s growth is fueled by increasing international sales. From January-

September 2005, sales in Russia increased 100% and sales in the U.S. increased

10% year-on-year. To meet this new demand, Hyundai has been investing in

manufacturing plants in North America, India, China, Turkey and research and

development centers in North America, Japan and Europe. In June 2004, Hyundai

opened its first plant in the U.S. In 2006, Hyundai plans to start construction on a

new production plant in Europe.

Counteracting these positive international sales trends, Hyundai has recently run into

trouble in its domestic (Korean) plants. In August 2005, the production of 25,683

vehicles was delayed due to a strike by the company‘s unionized workers. Later that

week, Kia‘s workers joined the strike causing Kia to delay the production of 21,273

vehicles. The economic effects of these strikes have yet to be reported. If Hyundai

can overcome these recent strikes, the company‘s future outlook is promising.

Maruti Udyog

A license and Joint Venture agreement was signed between the government of India

and Suzuki Motor Company (SMC) in Oct. 1982 to launch Maruti Udyog Limited

(MUL). Today, MUL offers 11 models, including the Maruti 800, Omni, premium

small car Zen, international brands Alto and WagonR, off-roader Gypsy, mid size

Esteem, luxury car Baleno, MPV, Versa, Swift, and Luxury SUV the GrandVitara

XL7.

MUL‘s dominant position in the Indian car market and its ability to satisfy its

customers has made it the success it is today (see Figure 9 in Appendix A). MUL

has been the leader in the Indian car market for two decades. Today, MUL holds

about 50% of the total Indian market. For a record sixth year in a row, MUL was

ranked highest in customer satisfaction, according to the J.D. Power Asia Pacific

2005 India Customer Satisfaction Index Study. In 2004, Business World ranked MUL

among the country‘s five most respected companies and the country‘s most

respected automobile company.

As the dominant player in the Indian automobile market, MUL is focusing on entering

new markets in India to increase market share. MUL recently added service

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businesses including sale and purchase of pre-owned cars, lease and fleet

management service for corporate clients, Maruti Insurance and Maruti Finance. In

April, MUL made large investments in a new plant that will produce diesel engines.

Once this plant is operational, MUL plans to increase its role in the diesel segment of

the market, which now accounts for about one-fifth of the total passenger car market

in India.

Competition has become fierce in some Indian market segments, especially entry

level compact cars. MUL‘s major competitor in this market, Hyundai Motor Company,

is aggressively expanding its sales and network across India. MUL has reduced the

price of the Maruti 800 three times this year to keep this model cheaper than those

offered by Hyundai. Even with the planed expansion to new Indian markets, MUL‘s

future success will depend greatly on how well it can compete with its new

international competitors.

Shanghai AIC

The Shanghai Automotive Industrial Company (SAIC) Group, representative of the

numerous up-and comingauto manufacturers in Asia, is a government controlled firm

that produces passenger cars, tractors, motorcycles, trucks, buses, and automotive

parts. SAIC was established in the 1960s, but only started to make a significant

impact in the automotive market upon entering into a joint venture with Volkswagen

in 1984 to manufacture Santana sedans. In 1997, SAIC expanded further by creating

a second major joint venture, this time with General Motors. With approximately 50

plants in the Shanghai area and over 40 joint ventures with global automotive

companies, SAIC is now the largest automotive manufacturer in China. SAIC is not

publicly traded, but has one subsidiary, an auto parts manufacturer titled Shanghai

Automotive Co., Ltd, listed on the Shanghai Stock Exchange.

Although SAIC‘s origins were small, the joint partnerships with Volkswagen and GM

served as a way for SAIC to jumpstart their enterprise in terms of capital, expertise,

and designs. By 2000, SAIC‘s production capacity had reached 400,000 vehicles

and accounted for 45 percent of China‘s car market. In 2003, SAIC produced over

600,000 cars just in the joint ventures with VW and GM, a dramatic increase of

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57%from 2002. That catapulted SAIC onto FORTUNE‘s list of the world‘s 500 largest

companies at number461, with revenues in 2003 of US$11.8B and profits of

US$689M.

However, SAIC has ambitious intents to go beyond the opportunities afforded by

these joint ventures. SAIC plans to develop its own brands and to have them on the

market as early as 2007, with goals of producing 2 million cars in 2010 and 3 million

in 2020. Doing so would make SAIC one of the six largest automotive manufacturers

worldwide. To achieve this semi-independence, SAIC has put great emphasis on

research and development. Among other things, it acquired intellectual property

rights for the Rover 25 and 75 before MG Rover‘s collapse and last year purchased

Ssangyong, a South Korean maker of sport utility vehicles. This purchase makes

SAIC the first Chinese automaker to have a controlling interest in a foreign carmaker,

helping achieve two other goals: expanding beyond China to enter the global

automotive market and getting ahead of its two main local competitors, Dongfeng

Motorand First Auto Works. As a goal for its world market, SAIC aims to hit export

revenues of US$5B in2010.

Despite these ambitious goals, the recent past has been fairly tumultuous for SAIC,

just as it has been for the entire global automotive market. 2003 was an amazingly

prosperous year for SAIC, with production of passenger cars leaping to 612, 216

from only 390,508 in 2002 and with an accompanying 37% increase in revenues. But

sales slowed in 2004, with revenues gaining only 3%. And in the first four months

of2005, SAIC saw earnings drop by 74%. Yet obviously the market potential in China

is huge – as of last year, there were 940 vehicles for every 1,000 drivers in the U.S.,

502 in Japan, and only 8 in China. But because of this high market potential and

relatively low barriers to entry, competition is fierce and oversupply a distinct

possibility. In addition, attempts by the Chinese government to curb spending by

making financing more difficult have reduced sales rates significantly. To be

successful, SAIC will need to adapt itself to the markets it intends to penetrate: in

China, it will need to transition from the traditional Chinese automotive market which

featured lavish passenger cars targeted at government and business officials to the

future market of compact sedans and other smaller, cheaper cars targeted at the

growing middle class. For international markets, it will need to address challenges

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related to branding, R&D, design, and marketing, which established international

manufacturers have had years to work out. SAIC will also experience some growing

pains – it will have to tiptoe through issues of knowledge transfer and intellectual

property as it attempts to simultaneously produce Volkswagens, GM cars, and

vehicles under its own brand. And SAIC will have to follow-through on current plans

to list in an upcoming international IPO. If SAIC can endure these challenges, it has

immense potential both in China and worldwide.

Toyota

Toyota was established as a public company in Japan in 1937. It entered the U.S.

market in 1957, but only became successful with the introductions of the Corona in

1965 and the Corolla in 1968. By 1970, Toyota was the world‘s fourth-largest

carmaker and by 1975 had displaced Volkswagen as the U.S.‘s #1auto importer.

Toyota began auto production in the U.S. in 1984 through a joint venture with GM,

and launched the successful Lexus line in the U.S. in 1989. Since then, Toyota has

continued to grow steadily, becoming the third largest global automotive

manufacturer as of 2003, with sales last year of 7.4million vehicles. Unlike many

other large auto manufacturers, Toyota carries only 4 brands: Toyota, Hino, Scion,

and Lexus; it also has a majority interest in Daihatsu. Known for their quality and

reliability, Toyota cars and light trucks such as the Camry (Best-selling passenger

car in America, 2004),Corolla, Lexus LS330, Prius (Motor Trend‘s Car of the Year,

2004), Tundra (Motor Trend‘s Truck of the Year, 2000), Tacoma (Motor Trend‘s

Truck of the Year, 2005), 4Runner, and Lexus RX300 (MotorTrend‘s SUV of the

Year, 1999) have been extremely successful both in the U.S. and abroad.

In the last few years, Toyota has been able to ride out the automotive storm,

continuing to post impressive results despite the troubles that other companies have

seen. In 2003, net income jumped almost 55%,reaching US$10.8B. And in 2004,

both revenue and net profit increased slightly. Currently, Toyota holds a 6% profit

margin, dramatically higher than any of the Big 3.

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Toyota‘s success is based largely on its forward-thinking, innovative management

style and its rigorous standards of quality. The Toyota Production System is a much-

studied strategy of design and manufacturing which emphasizes streamlining and

elimination of waste – giving rise to the ―just-in-time ―and ―lean‖ manufacturing

movements – and continuous error-checking and improvement. In addition, Toyota

has repeatedly been ahead of the trend in investing in new technologies. Instead of

focusing on reducing labor costs, Toyota has increasingly automated their production

facilities. And with the release of the Prius in 1997, Toyota introduced the first

mainstream hybrid vehicle, cashing in on the demand for fuel economy and reduced

environmental impact. Like the Prius, the Scion line successfully identified and

addressed a new consumer sector, a plan that Toyota will continue to follow. These

strategies combine to give Toyota a significant sustainable competitive advantage.

The results of this entire are clear: in 2005, Toyota won a record-breaking 10

segment awards in J.D. Power and Associates Initial Quality Study, with Lexus

carrying top honors for five years straight. And while75% of Toyota‘s current market

is in Japan and North America, it aims to reach markets in 140 countries and regions

in the future. With new assembly facilities in Thailand, Indonesia, South Africa and

Argentina, Toyota has more than 60 manufacturing facilities in 26 countries. This

allows production in geographic proximity to Toyota‘s future target markets like Asia

and South America. With expansion underway, operations going well, innovative

infrastructure and mindset, and well-targeted high quality products, Toyota is

excellently positioned for future growth and success.

In India

In a country obsessed with mileage, the hike in petrol prices and lately also in diesel

is making every Indian think twice about the mileage factor before they opt to buy a

car. Adding to this is the freefall of the rupee, which is also driving Indians to ask

'Kitna Milega'.The fluctuating fuel prices have even forced automakers to launch cars

that have all upper comforts coupled with the most suitable and fuel-efficient running

machines.

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According to the latest data by Society of Indian Automobile Manufacturers (SIAM),

car sales in India have dropped 18.6 percent in August for the first time in ten

months, owing to the increase in fuel prices.

Despite the industry taking a major hit, automakers are still hopeful with the festive

season coming up. Considering Diwali to be an auspicious time to buy new things,

even price-sensitive buyers are drawn into making purchases, giving a boost to car

sales.

The Indian car market is expecting the launch of several new fuel-efficient cars for

this festival season. Maruti Suzuki is all set to launch its new 800cc car soon. The

upcoming vehicle said to be more fuel efficient and more expensive than the Alto

model.

"Although this will be an 800cc car, technologically it will be more advanced than the

existing two 800cc models. It'll be more fuel efficient, and hence will also be more

expensive than M800 and Alto," a source said to the Economic Times.

"We are getting no support from the market and we hope that the festival demand

will at least be as per expectations...that's why we are launching new models and

getting ready for the festival months," said Debashis Mitra, director-sales and

marketing, Mercedes Benz India, to The Times of India.

Earlier, Hyundai and Maruti Suzuki were the two leading brands that resonated in the

domestic auto mobile industry. It's not the same anymore as other manufacturers

have entered the market with a new line up of vehicles the beat the fuel price hikes.

India Automobile Domestic Sales Trends (Number of

Vehicles)

Category 2003-04 2004-05 2005-2006 2006-07 2007-08 2008-09 2009-10

Passenger Vehicles

1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,951,333 2,520,421

Commercial Vehicles

318,430 351,041 467,765 490,494 384,194 532,721 676,408

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Three Wheelers

307,862 359,920 403,910 364,781 349,727 440,392 526,022

Two Wheelers

6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,370,951 11,790,30

5

Grand Total 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,295,397 15,513,15

6

Future of the brand and Recommendations

The above mentioned key ratios depict the top line and bottom line of the company which

has seen a considerable growth as compared to 2011. Keeping this in mind the

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company has laid specific emphasis on focussing on key markets such as India and

China which have a huge appetite for automobiles in their respective countries.

Year over year, Volkswagen AG has been able to grow revenues from

€112.8B EUR to €142.1B EUR. Most impressively, the company has been able to

reduce the percentage of sales devoted to cost of goods sold from 93.55% to

93.06%. This was a driver that led to a bottom line growth from €6.8B EUR to

€15.4B EUR.

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Although debt as a percent of total capital decreased at Volkswagen AG over the

last fiscal year to 52.58%, it is still in-line with the Automobiles industry's norm.

Additionally, even though there are not enough liquid assets to satisfy current

obligations, Operating Profits are more than adequate to service the debt. Accounts

Receivable are typical for the industry, with 20.95 days worth of sales outstanding.

Last, inventory levels, relative to its Cost of Goods Sold, are typical for the industry

and have shown a consistent decrease during the last 4 years. This implies that

management is becoming more efficient.

Volkswagen is the No. 1 automaker in Europe. Net sales break down by activity as

follows:

- vehicle sales (90%): 8.4 million vehicles sold in 2011, consisting of individual

vehicles (8 million units, of which 5.4 million are Volkswagen, Skoda et Bentley, and

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2.6 million are Audi, Seat and Lamborghini) and commercial vehicles (0.4 million;

Volkswagen brand);

- financial services (10%): financial services (loans, leasing, insurance), fleet

management, insurance, etc.

At the end of 2011, the group had 94 industrial sites worldwide.

Net sales are distributed geographically as follows: Germany (21.7%), Europe

(43.5%), Asia-Pacific (14.4%), North America (11%), and South America (9.4%).

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Volkswagen Group Strategy 2018- In line with the vision

As Volkswagen pursues its goal of becoming the number one automaker in the world

by 2018, India has become a key component of its strategy. India is currently the

world‘s second fastest growing car market, with shipments expected to more than

double by 2018. As a relatively recent entry into the Indian automotive

market, VW needed to raise brand awareness. To address this challenge,

Volkswagen‘s marketing team focused one of its key brand pillars, innovation, to

make a strong impact throughout the roll-out in India. Innovation was showcased not

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only in Volkswagen‘s product introductions, but also in its communications and

advertising.

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Recommendations

When going back in time, Volkswagen used to be known as the manufacturer of the

iconic "Beetle‖ and the ―Bully‖. In order to successfully leverage its history and

tradition to be innovative and to attract new customers, Volkswagen should ―go back

to its roots‖ when the brand used to be a way of life. This feeling should be

transferred to potential and current customers, without compromising quality.

The lifestyle of many people has changed in the sense that, there is a development

towards an environmentally friendly way of life and Volkswagen should take

advantage of this. Even though Volkswagen already takes necessary steps toward

the protection of the environment, it should emphasise that its Blue Motion Strategy

is competitive to Toyota‘s hybrid engine for example. Volkswagen should aim to

become the economic and environmental leader in the worldwide automobile market.

Volkswagen should expand their different brands on the worldwide market and

emphasise their different price ranges and target markets in order to create customer

loyalty and affection for the brand. Furthermore, Volkswagen should be aware that

there are still new customers entering the market, for example young people. By

targeting this group, Volkswagen has the chance to mature with this audience, which

supports the establishment of customer loyalty. In this context, After Sales Service

plays an important role in maintaining the customers and encouraging repeat

purchase. Volkswagen should aim to improve customer satisfaction and brand image

through enhanced dealer networks and an upgraded service.

Furthermore, Volkswagen did considerably well in surviving the economic crisis, not

just because of their high brand equity and their excellent sales in the last year.

However, in expanding this equity in the future, financial backing could be

established, which could help Volkswagen to become number one worldwide, and

help Volkswagen perform better against the competition.

In the German market in particular, Volkswagen is the ―mother or father‖ of the

automobile industry. As the ―people‘s car‖ it has a special relationship to the German

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customers. This emotional relationship should be expanded by continuing to offer

high quality cars to every segment of society, ranging from young drivers to old, loyal

drivers.

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BIBLIOGRAPHY

History of the Automobile.

http://inventors.about.com/library/weekly/aacarsassemblya.htm; accessed

http://www.iuriel.com/brand-management/the-origin-of-branding/

http://www.autocarindia.com/News/327042,best-of-2012-top-10-car-

comparisons.aspx

https://www.google.co.in/search?q=volkswagen+advertising+agency&hl=en&t

bo=u&biw=1366&bih=624&tbm=isch&source=univ&sa=X&ei=ZPIRUYS5I83Jr

AedzICAAg&ved=0CJIBELAE

http://mashable.com/2012/09/17/volkswagen-stories-why-vw/

http://www.afaqs.com/news/story/31515_Time-for-the-all-new-Volkswagen-

innovation

http://www.cardekho.com/new-volkswagen+cars

http://www.scribd.com/archive/plans?doc=44202303&signup_type=archive

http://www.4-traders.com/VOLKSWAGEN-AG-436737/financials/

http://www.amazon.com/Branding-Positioning-Segmentation-Volkswagen-

ebook/dp/B007NY6TQU

http://articles.economictimes.indiatimes.com/2012-08-

19/news/33272941_1_micra-evalia-mass-market-segment

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