SWOT analysis of Volkswagen
This is the Volkswagen Group SWOT analysis for 2013. For more information on how to do SWOT analysis please refer to our article.
Company background
Name Industries served Geographic areas served Headquarters Current CEO Revenue Profit Employees Volkswagen Group Automotive Worldwide Germany Martin Winterkorn €192.7 billion (2012) €21.7 billion (2012) 549,763 (2012) Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford Motor Co., General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Toyota Motor Corporation and many other automotive companies.
Main Competitors
Volkswagen Groups is a German corporation that manufactures passenger cars, commercial vehicles, motorcycles and engines. The company was the largest automaker by output in the world in 2011. Volkswagen Group also offers financial and leasing services. The company owns 13 vehicle brands, including Audi, Volkswagen, Bentley, Porsche, Skoda, Lamborghini, MAN, Scania and motorcycle brand Ducati. It operates in more than 150 countries and is one the largest companies in the world by size and revenue. You can find more information about the business in its official website or Wikipedia’s article.
SWOT
Volkswagen SWOT analysis 2013
Strengths
1. 2. 3. 4. 5. Global presence Strong brand portfolio Synergy Strong presence in China Well performing brands
Weaknesses
1. Weak position in the US passenger car market 2. Most cars are not environment friendly
Opportunities
1. 2. 3. 4. 5. Changing customer needs Increasing fuel prices Positive attitude towards “green” vehicles Growth through acquisitions Increasing global demand for buses 1. 2. 3. 4.
Threats
New emission standards Fluctuating fuel prices Rising raw material prices Exchange rates
Strengths
1. Global presence. Volkswagen operates in 153 countries worldwide and was the third biggest auto manufacturer in 2012, down from the 1st place in 2011. The company manufactures its cars in 100 plants in Europe, North and South America, Asia, Africa and Oceania. Except GM and Toyota, no other automotive company is capable to compete with Volkswagen in terms of global presence. 2. Strong brand portfolio. The business owns and sells 13 automotive brands: Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda, Volkswagen, MAN, Scania and other commercial vehicles. With such wide range of vehicle models the company satisfies nearly all consumer needs and have an access to an immense consumer market. 3. Synergy. Volkswagen Group benefits from the synergy created between all 13 separate automotive brands. All 13 separate companies share a part of R&D and servicing costs, learns from each other best practices and shares distribution channels. 4. Strong presence in China. China is the largest automotive market and is an emerging economy that grows steadily. It is also the biggest market for Volkswagen vehicles where the company captures nearly 20% of the market mainly with its Audi and Volkswagen brands. 5. Well performing brands. Without its namesake brand, the company owns a few other very successful brands, including Audi and Porsche. Audi brand is valued at $7 billion, while Porsche is valued at $5 billion. Audi is also the second biggest brand in the firm’s portfolio and is growing impressively.
Weaknesses
1. Weak position in the US passenger car market. In 2012, Volkswagen had only about 5% market share in the US passenger car market. US is the second largest automotive market in the world and weak Volkswagen’s position there results in comparably lower sales. 2. Most cars are not environment friendly. Volkswagen owns three sport car brands Porsche, Lamborghini and Bugatti that emit high amount of CO2 and are fuel inefficient. Besides Volkswagen group is strongly opposing to legislation requiring tighter regulations on CO2 emissions and energy efficiency as their cars are not as fuel-efficient and environment friendly as their competitors.
Opportunities
1. Changing customer needs. Volkswagen could introduce more fuel-efficient models that also emit much less CO2 across all its automotive brand, thus meeting new customer needs (environment friendly cars) and increasing brand reputation. 2. Increasing fuel prices. Consumers are very sensitive to rising fuel prices and when prices go up, their demand tends to grow for fuel-efficient and hybrid cars. 3. Positive attitude towards “green” vehicles. Cars that emit large quantities of CO2 and fuel inefficient cars pollute air and negatively affect the environment. Consumers are aware of this negative impact and are more positive to “green” vehicles that emit much less CO2 and are fuelefficient. 4. Growth through acquisitions. So far, Volkswagen Group was very successful in acquiring other auto manufactures and getting access to larger consumer markets as well as faster than organic growth. To continue grow at current rates and to access vital US market, Volkswagen should continue acquiring competitors. 5. Increasing global demand for buses. Demand for buses is expected to grow by 5% annually until 2016. Volkswagen being a major bus supplier has an opportunity to expand its manufacturing and increase sales.
Threats
1. New emission standards. Volkswagen strongly opposes stricter regulations for lower emission standards. If such legislation would be passed the business would have to make huge investments to engineer newer engines that emit less CO2. 2. Fluctuating fuel prices. Due to increasing extraction of shale gas, future fuel prices should drop and make hybrid cars less attractive. Volkswagen’s investments to hybrid and electric cars would be treated as losses, rather than perspective future cars. On the other hand, steeping fuel prices would make current Volkswagen models less attractive to cost conscious consumers, as they demand smaller cars that consume lower amounts of fuel. 3. Rising raw material prices. Rising prices for raw metals will lift the costs for auto manufacturers and result in squeezed profits for the companies. 4. Growing euro exchange rate. The business earns more than 70% of its revenue outside the euro zone. Exchange rate fluctuations threaten Volkswagen's profits if the euro will start appreciating against other currencies.
doc_205806449.docx
This is the Volkswagen Group SWOT analysis for 2013. For more information on how to do SWOT analysis please refer to our article.
Company background
Name Industries served Geographic areas served Headquarters Current CEO Revenue Profit Employees Volkswagen Group Automotive Worldwide Germany Martin Winterkorn €192.7 billion (2012) €21.7 billion (2012) 549,763 (2012) Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford Motor Co., General Motors Company, Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Toyota Motor Corporation and many other automotive companies.
Main Competitors
Volkswagen Groups is a German corporation that manufactures passenger cars, commercial vehicles, motorcycles and engines. The company was the largest automaker by output in the world in 2011. Volkswagen Group also offers financial and leasing services. The company owns 13 vehicle brands, including Audi, Volkswagen, Bentley, Porsche, Skoda, Lamborghini, MAN, Scania and motorcycle brand Ducati. It operates in more than 150 countries and is one the largest companies in the world by size and revenue. You can find more information about the business in its official website or Wikipedia’s article.
SWOT
Volkswagen SWOT analysis 2013
Strengths
1. 2. 3. 4. 5. Global presence Strong brand portfolio Synergy Strong presence in China Well performing brands
Weaknesses
1. Weak position in the US passenger car market 2. Most cars are not environment friendly
Opportunities
1. 2. 3. 4. 5. Changing customer needs Increasing fuel prices Positive attitude towards “green” vehicles Growth through acquisitions Increasing global demand for buses 1. 2. 3. 4.
Threats
New emission standards Fluctuating fuel prices Rising raw material prices Exchange rates
Strengths
1. Global presence. Volkswagen operates in 153 countries worldwide and was the third biggest auto manufacturer in 2012, down from the 1st place in 2011. The company manufactures its cars in 100 plants in Europe, North and South America, Asia, Africa and Oceania. Except GM and Toyota, no other automotive company is capable to compete with Volkswagen in terms of global presence. 2. Strong brand portfolio. The business owns and sells 13 automotive brands: Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda, Volkswagen, MAN, Scania and other commercial vehicles. With such wide range of vehicle models the company satisfies nearly all consumer needs and have an access to an immense consumer market. 3. Synergy. Volkswagen Group benefits from the synergy created between all 13 separate automotive brands. All 13 separate companies share a part of R&D and servicing costs, learns from each other best practices and shares distribution channels. 4. Strong presence in China. China is the largest automotive market and is an emerging economy that grows steadily. It is also the biggest market for Volkswagen vehicles where the company captures nearly 20% of the market mainly with its Audi and Volkswagen brands. 5. Well performing brands. Without its namesake brand, the company owns a few other very successful brands, including Audi and Porsche. Audi brand is valued at $7 billion, while Porsche is valued at $5 billion. Audi is also the second biggest brand in the firm’s portfolio and is growing impressively.
Weaknesses
1. Weak position in the US passenger car market. In 2012, Volkswagen had only about 5% market share in the US passenger car market. US is the second largest automotive market in the world and weak Volkswagen’s position there results in comparably lower sales. 2. Most cars are not environment friendly. Volkswagen owns three sport car brands Porsche, Lamborghini and Bugatti that emit high amount of CO2 and are fuel inefficient. Besides Volkswagen group is strongly opposing to legislation requiring tighter regulations on CO2 emissions and energy efficiency as their cars are not as fuel-efficient and environment friendly as their competitors.
Opportunities
1. Changing customer needs. Volkswagen could introduce more fuel-efficient models that also emit much less CO2 across all its automotive brand, thus meeting new customer needs (environment friendly cars) and increasing brand reputation. 2. Increasing fuel prices. Consumers are very sensitive to rising fuel prices and when prices go up, their demand tends to grow for fuel-efficient and hybrid cars. 3. Positive attitude towards “green” vehicles. Cars that emit large quantities of CO2 and fuel inefficient cars pollute air and negatively affect the environment. Consumers are aware of this negative impact and are more positive to “green” vehicles that emit much less CO2 and are fuelefficient. 4. Growth through acquisitions. So far, Volkswagen Group was very successful in acquiring other auto manufactures and getting access to larger consumer markets as well as faster than organic growth. To continue grow at current rates and to access vital US market, Volkswagen should continue acquiring competitors. 5. Increasing global demand for buses. Demand for buses is expected to grow by 5% annually until 2016. Volkswagen being a major bus supplier has an opportunity to expand its manufacturing and increase sales.
Threats
1. New emission standards. Volkswagen strongly opposes stricter regulations for lower emission standards. If such legislation would be passed the business would have to make huge investments to engineer newer engines that emit less CO2. 2. Fluctuating fuel prices. Due to increasing extraction of shale gas, future fuel prices should drop and make hybrid cars less attractive. Volkswagen’s investments to hybrid and electric cars would be treated as losses, rather than perspective future cars. On the other hand, steeping fuel prices would make current Volkswagen models less attractive to cost conscious consumers, as they demand smaller cars that consume lower amounts of fuel. 3. Rising raw material prices. Rising prices for raw metals will lift the costs for auto manufacturers and result in squeezed profits for the companies. 4. Growing euro exchange rate. The business earns more than 70% of its revenue outside the euro zone. Exchange rate fluctuations threaten Volkswagen's profits if the euro will start appreciating against other currencies.
doc_205806449.docx