Volkswagen conquers the world

Article Type: Abstracts From: Strategic Direction, Volume 29, Issue 1

The Economist, 7-13 Jul 2012, Vol. 404 Issue: 8792, Start page: 63, No of pages: 2

Looks at Volkswagen’s (VW) recent success, contrasting the poor situation that VW was in back in 1993 before Ferdinand Piëch took over and its current position of record profits and an expanding market share in Europe and China. Outlines how Piëch has achieved this success, noting his family’s history in the industry. Claims that the success of VW’s plans to be the biggest car maker by volume is partly due to the misfortunes of other car makers, such as Toyota, but is also due to its ability to produce a greater variety of brands at lower cost. Looks at how the size of VW influences its business strategy, reporting that it has little need, or success, at creating partnerships and can remain stable even in the event of a regional collapse in sales. Outlines VW presence in world markets claiming it has a commanding presence in China and Brazil and discussing how it is trying to repair its reputation in America. Considers potential problems which could damage VW’s lead, claiming that the size of the company could lead to a lack of focus citing SEAT as an example of this; the dependence on its shared platforms; and its vulnerability to a downturn in China. Inset provides statistics on carmaker’s sales worldwide. Article type: Viewpoint ISSN: 0013-0613 Reference: 41AT044

Keywords: Automotive industry, Business strategy, Volkswagen