A PROJECT REPORT ON INDUSTRIAL EXPOSURE Study on the various functional aspects & profile of VOLKSWAGEN

In partial fulfillment of the requirement for the award of degree of Bachelors in Business Administration (B.B.A.) 2009-2012

Submitted By:

Under the Guidance of:

KAUSHIK

Ms. HIMANI GROVER

BHARATI VIDYAPEETH INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI ACKNOWLEDGEMENT Through this acknowledgement, I express my thanks towards all those people who helped me for the preparation of this project, which has been a learning experience. I am extremely thankful to Ms. Himani Grover (Faculty) for getting me acquainted to the company and giving me the golden opportunity to carry out this interesting study on VOLKSWAGEN . Last but not least I am also grateful to my friends and all those who directly or indirectly helped me completion of the project.

Certificate

This is to certify that the project entitled Study on the various functional aspects & profile of VOLKSWAGEN submitted by Kaushik, has been done under my guidance and supervision in partial fulfillment of the requirement for the award of BACHELOR OF BUSINESS ADMINISTRATION (BBA) DEGREE. The work and analysis mentioned in this project have been undertaken by the candidate himself and necessary references have been recognized and acknowledged in the text of the report.

Himani Grover (Internal Guide)

INDEX
Chapter-1 Introduction Overview of Indian economy & its sector

o Overview of the industry o Companys contribution in the industry o Scope of improvement Profile of the Company

o History o Nature of Business o Vision & Mission and Organization Structure Chapter-2 Company Analysis Current Issues PEST Analysis Porters 5 forces model SWOT Analysis USP of any department Key competitor

Chapter-3 Marketing Strategy Introduction & Importance Chapter-4 Financial Analysis Chapter-5 HR Polices & recruitment Sources of recruitment Process of recruitment Training & Development Benefits & Compensation Sources of finance Key investments Ratio Analysis Marketing mix of the company STP Analysis of the company BCG Matrix

Chapter-6 Production Policies Chapter-7 Findings & Conclusion Production Process Production Layout Quality concepts used by company Key Suppliers Key Customers

Chapter-1 Introduction

Overview of Indian economy & its sector

Economy of India

The Economy of India is the eleventh largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). The country's per capita GDP (PPP) is $3,290 (IMF, 127th) in 2010. Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment. Economists predict that by 2020, India will be among the leading economies of the world. India was under social democratic policies from 1947 to 1991. The economy was characterised by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth. Since 1991, continuing economic liberalisation has moved the country toward a marketbased economy. A revival of economic reforms and better economic policy in first decade of the 21st century accelerated India's economic growth rate. In recent years, Indian cities have continued to liberalise business regulations. By 2008, India had established itself as the world's second-fastest growing major economy. However, as a result of the financial crisis of 20072010, coupled with a poor monsoon, India's gross domestic product (GDP) growth rate significantly slowed to 6.7% in 200809, but subsequently recovered to 7.2% in 200910, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period. The unemployment rate for 20092010, according to the state Labour Bureau, was 9.4 percent nationwide, rising to 10.1 percent in rural areas, where two-thirds of the 1.2 billion population live. India's large service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sector contribute 28% and 14.6% respectively. Agricultures the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%. The labour force totals half a billion workers. Major agricultural products include buffalo, rice, wheat, oilseed, cotton, jute, tea, sugarcane, include potatoes, cattle, water sheep, goats, poultry and fish. Major industries

telecommunications, textiles, chemicals, food processing, steel, transportation equipment,

cement, mining, petroleum, machinery, information technology-enabled services and pharmaceuticals. However, statistics from a 2009-10 government survey, which used a smaller sample size than earlier surveys, suggested that the share of agriculture in employment had dropped to 45.5%. Previously a closed economy, India's trade and business sector has grown fast. India currently accounts for 1.5% of world trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's total trade in goods and services has reached a share of 43% of GDP in 200506, up from 16% in 199091.

Sectors of Indian economy Industry and services Industry accounts for 28% of the GDP and employ 14% of the total workforce. In absolute terms, India is 12th in the world in terms of nominal factory output. The Indian industrial sector underwent significantly changes as a result of the economic reforms of 1991, which removed import restrictions, brought in foreign competition, led to privatisation of certain public sector industries, liberalised the FDI regime, improved infrastructure and led to an expansion in the production of fast moving consumer goods. Post-liberalisation, the Indian private sector was faced with increasing domestic as well as foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, and relying on cheap labour and new technology. However, this has also reduced employment generation even by smaller manufacturers who earlier relied on relatively labour-intensive processes. Textile manufacturing is the second largest source of employment after agriculture and accounts for 20% of manufacturing output, providing employment to over 20 million people. Ludhiana produces 90% of woollens in India and is known as the Manchester of India. Tirupur has gained

universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. India is 13th in services output. The services sector provides employment to 23% of the work orce and is growing quickly, with a growth rate of 7.5% in 19912000, up from 4.5% in 1951 80. It has the largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950.
[17]

Information technology and business process outsourcing are among the fastest growing

sectors, having a cumulative growth rate of revenue 33.6% between 199798 and 200203 and contributing to 25% of the country's total exports in 200708. The growth in the IT sector is attributed to increased specialisation, and an availability of a large pool of low cost, but highly skilled, educated and fluent English-speaking workers, on the supply side. This is matched on the demand side by an increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of the Indian IT industry in the country's GDP increased from 4.8 % in 200506 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism. Organised retail supermarkets accounts for 24% of the market as of 2008. Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-hoarding measures" may have to be complied before a store can open doors. There are taxes for moving goods from state to state, and even within states. Mining forms an important segment of the Indian economy, with the country producing 79 different minerals (excluding fuel and atomic resources) in 200910, including iron ore, manganese, mica, bauxite, chromite, limestone, asbestos, fluorite, gypsum, ochre, phosphorit eand silica sand

Agriculture India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 15.7% of the GDP in 200910, employed 52.1% of the total workforce, and despite a steady decline of its share in the GDP, is still the largest economic sector and a significant piece of the overall socio-economic development of India. Yields per

unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the average yield in India is generally 30% to 50% of the highest average yield in the world. India receives an average annual rainfall of 1,208 millimetres (47.6 in) and a total annual precipitation of 4000 billion cubic metres, with the total utilisable water resources, including surface and groundwater, amounting to 1123 billion cubic metres. 546,820 square kilometres (211,130 sq mi) of the land area, or about 39% of the total cultivated area, is irrigated. India's inland water resources including rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to nearly six million people in the fisheries sector. In 2008, India had the world's third largest fishing industry. India is the largest producer in the world of milk, jute and pulses, and also has the world's second largest cattle population with 175 million animals in 2008. It is the second largest producer of rice, wheat, sugarcane, cotton and groundnuts, as well as the second largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production respectively. India is also the second largest producer and the largest consumer of silk in the world, producing 77,000 million tons in 2005.

Banking and finance The Indian money market is classified into the organised sector, comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks, and the unorganised sector, which includes individual or family owned indigenous bankers or money lenders and non-banking financial companies. The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans. Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors like agriculture,

small-scale industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total bank deposits increased from 5,910 crore (US$1.28 billion) in 197071 to 3,830,922 crore (US$831.31 billion) in 200809. Despite an increase of rural branches, from 1,860 or 22% of the total number of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000 villages are covered by a scheduled bank. India's gross domestic saving in 200607 as a percentage of GDP stood at a high 32.7%. More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold. The public sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks, like encouraging mergers, reducing government interference and increasing profitability and competitiveness, other reforms have opened up the banking and insurance sectors to private and foreign players. Energy and power India's oil reserves meet 25% of the country's domestic oil demand. As of 2009, India's total proven oil reserves stood at 775 million metric tonnes while gas reserves stood at 1074 billion cubic metres.[94] Oil and natural gas fields are located offshore at Mumbai High, Krishna Godavari Basin and the Cauvery Delta, and onshore mainly in the states of Assam, Gujarat and Rajasthan.[94] India is the fourth largest consumer of oil in the world and imported $82.1 billion worth of oil in the first three quarters of 2010, which had an adverse effect on its current account deficit.[92] The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOCL). There are some major private Indian companies in the oil sector such as Reliance Industries Limited (RIL) which operates the world's largest oil refining complex. As of 2010, India had an installed power generation capacity of 164,835 megawatts (MW), of which thermal power contributed 64.6%, hydroelectricity 24.7%, other sources of renewable energy 7.7%, and nuclear power 2.9%. India meets most of its domestic energy demand through

its 106 billion tonnes of coal reserves.[97] India is also rich in certain renewable sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane). India's huge thorium reserves about 25% of world's reserves are expected to fuel the country's ambitious nuclear energy program in the long-run. India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years. However, the Indo-US nuclear deal has paved the way for India to import uranium from other countries.

Automotive sector
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 11 million vehicles (including 2 wheeled and 4 wheeled) and exports about 1.5 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 2.6 million units in 2009. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea and Thailand. As of 2009, India is home to 40 million passenger vehicles and more than 2.6 million cars were sold in India in 2009 (an increase of 26%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. A chunk of India's car manufacturing industry is based in and around the city of Chennai, also known as the "Detroit of India". with the Indian city accounting for 60 per cent of the country's automotive exports. Gurgaon and Manesar near New Delhi are hubs where all of the Maruti Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is another vehicular production hub with General Motors, Volkswagen/ Skoda, Mahindra and Mahindra, Tata Motors in the process of setting up or already set up facilities. Ahmedabad with Tata Motors Nano plant and Halol with General Motors in Gujarat, Aurangabad in Maharashtra, Kolkata in West Bengal are some of the other automotive manufacturing regions around the country.

Volkswagen

Volkswagen (abbreviated VW) is the world's third largest automobile manufacturer. originalmarque within the Volkswagen Group, which includes the

The car

company is headquartered in Wolfsburg, Lower Saxony, Germany. Volkswagen is the marques Audi, Bentley Motors,Bugatti Automobiles, Automobili Lamborghini, SEAT, koda Auto and heavy goods vehicle manufacturer Scania. Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private Limited that assembles, manufactures and distributes Volkswagen vehicles in India with headquarters in Chakan Maharashtara . It was established in 2007. In the year 2010, VIPL recorded sales of 32,627 vehicles against 3,039 vehicles sold during the year 2009 and registered a sales growth of over 1,000% Volkswagen, one of the largest car manufacturers in Europe, is betting big on India with its small car portfolio. Though India contributes a mere 0.3% to the global sales of Volkswagen group, the company is planning to increase its market share in the country by 8 to 10% in the next four-tosix years from 1.35% now on the back of its highest selling Skoda Fabia and soon to be launched Polo. Volkswagen Group is banking on India in a big way for their growth in the future. Experts predict a huge increase in the overall demand for cars in India from 1.4 million units in 2009 to more than 2 million cars per year by 2014. As a part of the market development Volkswagen

Group aims to increase their market share by 8-10% within the next four to six years, Kurt Rippholz, spokesperson, Volkswagen group said Volkswagen means "people's car" in German, where it is pronounced currenttagline or slogan is Das Auto (in English The Car) The Volkswagen Group has set itself Group-wide goals to improve its sustainable development performance. The most important newly defined goals are summarised in the sustainability programme presented here, as well as the 2009/2010 report objectives, which are listed according to their success rate. [flks van]. Its

HISTORY of Volkswagen Volkswagen was originally founded in 1937 by the Nazi trade union, the German Labour Front (Deutsche Arbeitsfront). In the early 1930s German auto industry was still largely composed of luxury models, and the average German rarely could afford anything more than a motorcycle. Seeking a potential new market, some car makers began independent "peoples' car" projects Mercedes' 170H, Adler's AutoBahn, Steyr 55, Hanomag 1,3L, among others. The trend was not new, as Bla Barnyi is credited with having conceived the basic design in the middle 1920's.Josef Ganz developed the Standard Superior (going as far as advertising it as the "German Volkswagen"). Also, in Czechoslovakia, the Hans Ledwinka's penned Tatra T77, a very popular car amongst the German elite, was becoming smaller and more affordable at each revision. In 1933, with many of the above projects still in development or early stages of production, Adolf Hitler declared his intentions for a state-sponsored "Volkswagen" program. Hitler required a basic vehicle capable of transporting two adults and three children at 100 km/h (62 mph). The "People's Car" would be available to citizens of the Third Reich through a savings scheme at 990 Reichsmark, about the price of a small motorcycle (an average income being around 32RM a week). Despite heavy lobbying in favour of one of the existing projects, Hitler chose to sponsor an all new, state owned factory. The engineer chosen for the task was Ferdinand Porsche. By then an already famed engineer, Porsche was the designer of the Mercedes 170H, and worked at Steyr for quite some time in the late 1920s. When he opened his own design studio he landed two

separate "Auto fr Jedermann" (car for everybody) projects with NSU and Zndapp, both motorcycle manufacturers. Neither project come to fruition, stalling at prototype phase, but the basic concept remained in Porsche's mind time enough, so on 22 June 1934, Dr. Ferdinand Porsche agreed to create the "People's Car" for Hitler.

VW Type 82E Erwin Komenda, the longstanding Auto Union chief designer, developed the car body of the prototype, which was recognizably the Beetle known today. It was one of the first to be evolved with the aid of a wind tunnel, in use in Germany since the early 1920s. The building of the new factory started 26 May 1938 in the new town of KdF-Stadt, now called Wolfsburg, which had been purpose-built for the factory workers. This factory had only produced a handful of cars by the time war started in 1939. None was actually delivered to any holder of the completed saving stamp books, though one Type 1 Cabriolet was presented to Hitler on 20 April 1938 (his 49th birthday). War meant production changed to military vehicles, the Type 82 Kbelwagen ("Bucket car") utility vehicle (VW's most common wartime model), and the amphibious Schwimmwagen which were used to equip the German forces.. 1945: British Army, Major Ivan Hirst, unclear future The company owes its post-war existence largely to one man, British Army officer Major Ivan Hirst, REME. In April 1945, KdF-Stadt, and its heavily bombed factory were captured by the Americans, and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factories were placed under the control of Oldham-born Hirst. At first, the plan was to use it for military vehicle maintenance. Since it had been used for military

production, and had been in Hirst's words a "political animal" rather than a commercial enterprise, the equipment was in time intended to be salvaged as war reparations. Hirst painted one of the factory's cars green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000. The first few hundred cars went to personnel from the occupying forces, and to the German Post Office. Some British Service personnel were allowed to take their VW Beetles back to the United Kingdom when they were demobilised, and one of the very first Beetles brought back in that way (UK registration number JLT 420) is still owned by Peter Colborne-Baber, the son of the original proprietor of the UK's first official Volkswagen Importer, Colborne Garages of Ripley, Surrey. The car, and its town changed their Second World War-era names to "Volkswagen", and "Wolfsburg" respectively, and production was increasing. It was still unclear what was to become of the factory. It was offered to representatives from the British, American and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "is quite unattractive to the average motorcar buyer, is too ugly and too noisy If you think you're going to build cars in this place, you're a bloody fool, young man". In an ironic twist of fate, Volkswagen would manufacture a locally built version of Rootes's Hillman Avenger in Argentina in the 1980s, long after Rootes had gone bankrupt at the hands of Chrysler in 1978 the Beetle outliving the Avenger by over 30 years.

1945 to 1948: survival in Allied-occupied Germany In Occupied Germany, the Allies followed the Morgenthau Plan, to remove all German war potential, by complete or partial pastoralisation. As part of this, in the Industrial plans for Germany, the rules for which industry Germany was to be allowed to retain were set out. German car production was set at a maximum of 10% of the 1936 car production numbers. As mentioned above, the Volkswagen factory at Wolfsburg came under British control in 1945; it was to be dismantled and shipped to Britain. Thankfully for Volkswagen, no British car manufacturer was interested in the factory; "the vehicle does not meet the fundamental technical

requirement of a motor-car it is quite unattractive to the average buyer To build the car commercially would be a completely uneconomic enterprise". The factory survived by producing cars for the British Army instead. Allied dismantling policy changed in late 1946 to mid 1947, although heavy industry continued to be dismantled until 1951. In March 1947 Herbert Hoover helped change policy by stating: "There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It cannot be done unless we exterminate or move 25,000,000 people out of it". Thanks to the protection of British Army Major Ivan Hirst, Volkswagen survived the perilous times, and became part of the German economic recovery.

1948 onwards: icon for the West German regeneration

1949 Volkswagen Sedan

Volkswagen Cabriolet (1953) From 1948, Volkswagen became a very important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff (18991968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949 Major Hirst left association with the company, as it had now been re-formed as a trust, controlled by the West German government, and the

government of the State ofLower Saxony. Apart from the introduction of the Volkswagen Type 2 commercial vehicle (van, pick-up and camper), and the VW Karmann Ghia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968. Volkswagens were first exhibited and sold in the United States in 1949, but only sold two units in America that first year. On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to standardise sales and service in the United States. Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955. Volkswagens in Canada VW Canada ordered their first cars on 10 July 1952. (shipping order 143075) The order consisted of 12 vehicles, (3) model 11C, a black, green, and sandcolor (3) 11GS, a chestnut brown and two azure blue, (2) 24A-M51 in red, (1)21A in blue, (1) 23A in blue, (1) 22A beige color, and one Ambulance. Volkswagen Products were seen in Canada for the first time at the Canadian National Exhibition in August 1952 and were accepted enthusiastically. The first shipment of cars reached Toronto in December 1952. By 1955 sales were on a basis that warranted the building of the fine Volkswagen plant on a 32-acre (130,000 m2) site on Scarboro's Golden Mile. To this, a 60,000-square-foot (5,600 m2) building with administration, showrooms, service, repairs and parts, an addition of 60,000 feet (18,000 m) was built in 1957, with storage for $4,000,000 of parts. (See 1959 Canadian Register of Commerce & Industry held in the Western Libraries at the University of Western Ontario, London, Ontario.) Although the car was becoming outdated, during the 1960s and early 1970s, American exports, innovative advertising, and a growing reputation for reliability helped production figures surpass the levels of the previous record holder, the Ford Model T. On 17 February 1972 the 15,007,034th Beetle was sold. Volkswagen could now claim the world production record for the most-produced, single make of car in history. By 1973, total production was over 16 million. To commemorate its passing the Ford Model T's record sales mark and its victories in the Baja 1000 Mexican races from 1967 to 1971, Volkswagen produced its first limited-edition Beetle. It was marketed as the "Baja Champion SE" in the United States and the "Marathon" Superbeetle in the rest of the world. It featured unique "Marathon Blau" metallic blue paint, steel-pressed 10spoke 15-inch (38 cm) magnesium-alloy wheels, a commemorative metal plate mounted on the glovebox and a certificate of authenticity presented to the original purchaser. Dealer-installed

options for this limited-edition Superbeetle included the following: white stripes running the length of the rocker-panel, a special shifter knob, bumper overriders, tapered exhaust tips, fake walnut inserts in the dashboard (behind the steering wheel and the glovebox cover) as well as Bosch fog lights mounted on the front bumper. 1961 to 1973: product line expansion VW expanded its product line in 1961 with the introduction of four Type 3 models (Karmann Ghia, Notchback, Squareback) based on the new Type 3 mechanical underpinnings, and again in 1969 with the larger Type 4 (411 and 412) models. These differed substantially from previous vehicles, with the notable introduction of monocoque/unibody construction, the option of a fully automatic transmission, electronic fuel injection, and a sturdier powerplant. Volkswagen added a "Super Beetle" (the Type 113) to its lineup in 1971. The Type 113 differed from the standard Beetle in its use of a MacPherson strut front suspension instead of the usual torsion bars. Also the nose of the car was stretched 2 inches (51 mm) to allow the spare tire to lie flat, and the combination of these two features significantly increased the usable front luggage space. Despite the Super Beetle's (marketed outside North America as the VW 1302, later 1303) popularity with Volkswagen customers, purists preferred the standard Beetle with its less pronounced nose and its original torsion bar suspension. In 1973, Volkswagen introduced the military-themed Type 181, or "Trekker" in Europe and the UK, "Thing" in America, recalling the wartime Type 82. The military version was produced for the NATO-era German Army during the Cold War years of 1970 to 1979. The US Thing version only sold for two years, 1973 and 1974, thanks at least in part to Ralph Nader's automobile safety campaigns.

Volkswagen Type 4 assembly line in Wolfsburg as of 1973

In 1964, Volkswagen succeeded in purchasing Auto Union, and in 1969, NSU Motorenwerke AG(NSU). The former company owned the historic Audi brand, which had disappeared after the Second World War. VW ultimately merged Auto Union and NSU to create the modern day Audi company, and would go on to develop it as its luxury vehicle marque. However, the purchase of Auto Union and NSU proved to be a pivotal point in Volkswagen's history, as both companies yielded the technological expertise that proved necessary for VW to survive when demand for its air-cooled models went into terminal decline as the 1970s dawned.

1974: from Beetle to Golf/Rabbit

Volkswagen Passat (19731977 model) Volkswagen was in serious trouble by 1973. The Type 3 and Type 4 models had sold in much smaller numbers than the Beetle and the NSU-based K70 also failed to woo buyers. Beetle sales had started to decline rapidly in European and North American markets. The company knew that Beetle production had to end one day, but the conundrum of replacing it had been a never-ending nightmare. VW's ownership of Audi / Auto Union proved to be the key to the solution with its expertise in front-wheel drive, and water-cooled engines which Volkswagen so desperately needed to produce a credible Beetle successor. Audi influences paved the way for this new generation of Volkswagens, known as the Passat, Scirocco, Golf and Polo. First in the series was the Volkswagen Passat (Dasher in the U.S.), introduced in 1973, afastback version of the Audi 80, using many identical body and mechanical parts. Estate/wagon versions were available in many markets. In Europe, the estate/wagon version dominated in market share for many years.

In spring 1974, the Scirocco followed. The coupe was designed by Giorgetto Giugiaro. Based on the platform of the not yet released Golf, it was built at Karmann due to capacity constraints at Volkswagen. The pivotal model emerged as the Volkswagen Golf in 1974, marketed in the United States and Canada as the Rabbit for the 1st generation (19751985) and 5th generation (20062009). Its angular styling was designed by the Italian Giorgetto Giugiaro). Its design followed trends for small family cars set by the 1959 Mini the Golf had a transversely mounted, water-cooled engine in the front, driving the front wheels, and had a hatchback, a format that has dominated the market segment ever since. Beetle production at Wolfsburg ended upon the Golf's introduction. It continued in smaller numbers at other German factories (Hanover and Emden) until 1978, but mainstream production shifted to Brazil and Mexico. In 1975, the Volkswagen Polo followed. It was a re-badged Audi 50, which was soon discontinued in 1978. The Polo became the base of theVolkswagen Derby, which was introduced 1977. The Derby was for all intents and purposes a three-box design of the Polo. After a second model generation, the Derby was discontinued in 1985. Passat, Scirocco, Golf and Polo shared many character defining features, as well as parts and engines. They built the basis for Volkswagen's turn-around.

1974 to 1990: entering the mainstream

Volkswagen Polo (19751979 model) While Volkswagen's range of cars soon became similar to that of other large European automakers, the Golf has been the mainstay of the Volkswagen lineup since its introduction, and the mechanical basis for several other cars of the company. There have been six generations of the Volkswagen Golf, the first of which was produced from the summer of 1974 until the end of

1983 (sold as the Rabbit in the United States and Canada and as the Caribe in Latin America). Its chassis also spawned the Volkswagen Scirocco sport coupe, Volkswagen Jetta saloon/sedan, Volkswagen Golf Cabriolet convertible, and Volkswagen Caddy pick-up. North American production of the Rabbit commenced at a factory in New Stanton, Pennsylvania in 1978. It would be produced in the United States as the Rabbit until the spring of 1984. The secondgeneration Golf hatchback/Jetta sedan ran from late 1983 to late 1991, and a North American version produced in Pennsylvania went on sale at the start of the 1985 model year. The production numbers of the first-generation Golf has continued to grow annually in South Africa as the Citi Golf, with only minor modifications to the interior, engine and chassis, using tooling relocated from the New Stanton, Pennsylvania plant when that site began to build the Second Generation car. In the 1980s, Volkswagen's sales in the United States and Canada fell dramatically, despite the success of models like the Golf elsewhere. The Japanese and the Americans were able to compete with similar products at lower prices. Sales in the United States were 293,595 in 1980, but by 1984 they were down to 177,709. The introduction of the second-generation Golf, GTI and Jetta models helped Volkswagen briefly in North America. Motor Trend named the GTI its Car of the Year for 1985, and Volkswagen rose in the J.D. Power buyer satisfaction ratings to eighth place in 1985, up from 22nd a year earlier. VW's American sales broke 200,000 in 1985 and 1986 before resuming the downward trend from earlier in the decade. Chairman Carl Hahn decided to expand the company elsewhere (mostly in developing countries), and the New Stanton, Pennsylvania factory closed on 14 July 1988. Meanwhile, four years after signing a cooperation agreement with the Spanish car maker SEAT in 1982, Hahn expanded the company by purchasing a majority share of SEAT up to 75% by the end of 1986, which VW bought outright in 1990. Volkswagen had entered the supermini market in 1975 with the Volkswagen Polo, a stylish and spacious three-door hatchback designed by Bertone. It was a strong seller in West Germany and most of the rest of Western Europe, being one of the first foreign small cars to prove popular in Britain. The second-generation model, launched in 1981 and sold as a hatchback and "coupe" (with the hatchback resembling a small estate car and the coupe being similar to a conventional hatchback), was an even greater success for Volkswagen. It was face-lifted in 1990 and was still selling well after 13 years, when it was replaced by the third-generation Polo in 1994.

1991 to 1999: moving upmarket In 1991, Volkswagen launched the third-generation Golf, which was European Car of the Year for 1992. The Golf Mk3 and Jetta arrived in North America just before the start of 1994 model year, first appearing in southern California in the late spring of 1993. The sedan version of the Golf was badged Vento in Europe, but remained Jetta in the U.S. The late 1990s saw a gradual change in perception of the company's products with Audi having elevated itself into same league as BMW and Mercedes-Benz Volkswagen moved upmarket to fill the void left by Audi; with SEAT and the further addition of the Czech car maker koda being acquired in the late 1990s, now occupying what was once VW's core market. This move upmarket was continued with the Golf Mk4, introduced at the end of 1997 (and in North America in 1999), its chassis spawned a host of other cars within the Volkswagen Group theVolkswagen Bora (the sedan called Jetta in the U.S.), New Beetle, SEAT Toledo, SEAT Len, Audi A3, Audi TT, and koda Octavia. The other main models have been the Polo, a smaller car than the Golf, and the larger Passat for the segment above the Golf. The Sciroccoand the later Corrado were both Golf-based coups.

The Volkswagen New Beetle In 1994, Volkswagen unveiled the J Mays-designed Concept One, a "retro"-themed concept car with a resemblance to the original Beetle, based on the platform of the Polo. Due to a positive response to the concept, a production version was developed as the New Beetle, based on the Golf's larger platform.

Volkswagen's fortunes in North America improved once the third-generation Golf and Jetta models became available there. Marketing efforts included Trek bicycles with accompanying bicycle racks on the 1996 Jetta sedan. The introductions of the New Beetle and the fifthgeneration Passat were a major boost to the brand. In the UK, Volkswagen's market share grew throughout the 1990s. In 1990, the Golf was Britain's 12th most popular car with nearly 50,000 units sold. The Mk3 Polo achieved similar success in the mid 1990s, but in 1999 theMk4 Golf was Volkswagen's first ever entrant in Britain's top 10 list of most popular new cars. In the late 1990s Volkswagen acquired the three luxury brands Lamborghini (through Audi), Bentley, and Bugatti due to Ferdinand Pich" strategy. Audi's plans for Lamborghini included a small supercar later to be named the Gallardo, and a new halo vehicle, the Murcilago, and later the Reventon limited edition halo car. In late 2008, a 4-door saloon for the Lamborghini brand was shown in the form of the Lamborghini Estoque concept. For Bentley, its future within the Volkswagen Group seemed bright as the launch of the Bentley Continental range helped Bentley post record-breaking sales of 10,000. Bugatti, after Volkswagen purchased the rights to use the name, showed three concept cars, the Bugatti EB110 (coup and saloon) and the Bugatti Chiron. Bugatti then launched the Veyron hypercar, with a top speed of 252 mph (406 km/h). Although Bugatti makes a huge loss on every Veyron, Volkswagen is still going to keep the brand and maybe will launch a new Rolls Royce Phantom-rivaling saloon rumoured to be called Royale.

2000 to date: model range expansion Volkswagen began introducing an array of new models after Bernd Pischetsrieder became Volkswagen Group CEO (responsible for all Group brands) in 2002. The sixth-generation VW Golfwas launched in 2008, came runner-up to the Opel/Vauxhall Insignia in the 2009 European Car of the Year, and has spawned several cousins: VW Jetta, VW Scirocco, SEAT Len, SEAT Toledo,koda Octavia and Audi A3 hatchback ranges, as well as a new mini-MPV, the SEAT Altea. The GTI, a "hot hatchback" performance version of the Golf, boasts a 2.0 L Turbocharged Fuel Stratified Injection (FSI) direct injection engine. VW began marketing the Golf under the Rabbit name once again in the U.S. and Canada in June 2006. (The GTI had

arrived to North America four months earlier). The fifth-generation Jetta, and the performance version, the GLI, are also available in the United States and Canada. The sixth-generation Passat and the fifth-generation Jetta both debuted in 2005, and VW has announced plans to expand its lineup further by bringing back the Scirocco by 2008. Other models in Wolfgang Bernhard's (Volkswagen brand CEO) "product offensive" include the Tiguan mid-sized SUV in 2008 and a Passat Coup. In November 2006 Bernd Pischetsrieder announced his resignation as Volkswagen Group CEO, and was replaced by Audi worldwide CEO Martin Winterkorn at the beginning of 2007. Winterkorn is credited with making Audi a challenger to the dominance of BMW and Mercedes, and his design-led strategy has led to Audi being considered one of the most important brands in the world.

The B5.5 fifth-generation Passat facelift In North America, VW faced many challenges. After rising significantly between 1998 and 2001, VW's North American sales began to fall sharply leading to a 2005 loss of roughly US$1 billion for its operations in the U.S. and Canada. Profitability has not been strong, and the lack of reliability of the company's cars appears to bear some of the responsibility for this situation. By 2005, its models sat near the bottom of Consumer Reports reliability ratings, and J.D. Power and Associates ranked VW 35th out of 37 brands in its initial quality survey. Attempts to enter a new market segment also compromised Volkswagen's standing in North America. In 2002, Volkswagen announced the debut of its Phaeton luxury car, which was critically acclaimed but not well received in the marketplace. VW announced its discontinuance in the U.S. market for the 2007 model year due to the disappointing sales.

The 2006 Jetta Volkswagen in 2005, despite challenges, still maintained North American sales of 224,195a dramatic increase from the low in 1993 when US sales totalled only 49,533 vehicles. Momentum continued for fiscal 2006, as VW's North American sales for the year were 235,140 vehicles, a 4.9 percent increase over 2005, despite a slump in domestic North American manufacturer's sales. VW plans to close out the decade with the release on several new vehicles worldwide and a barrage of advertising. In conjunction with the introduction of new models, production location of Volkswagen vehicles also underwent great change. The 2007 Eos, a hardtop convertible, is produced in a new facility in Portugal. All Golfs/Rabbits and GTIs as of 2006 are manufactured in Wolfsburg, Germany, rather than VW's Mexican factory in Puebla, where Golfs and GTIs for the North American market were produced from 1989 to 1998, and the Brazilian factory in Curitiba, where Golfs and GTIs were produced from 1999 to 2006. (The Jetta has primarily been made in Mexico since 1989). VW is also in the process of reconfiguring an automotive assembly plant in Belgium. The new models and investments in manufacturing improvements were noticed immediately by automotive critics. Favorable reviews for VW's newest cars include the GTI being named by Consumer Reports as the top sporty car under $25,000, one of Car and Driver magazine's "10 Best" for 2007, Automobile Magazine's 2007 Car of the Year, as well as a 2008 Motor Trend comparison ranking the mid-size Passat first in its class. The J. D. Power and Associates 2006 Automotive Performance, Execution and Layout (APEAL) Study scored Volkswagen fourteenth overall with strong performances by its new Jetta and Passat models.

The fifth-generation Golf, sold in North America as the Rabbit. Volkswagen is recognised as one of the leading small diesel engine manufacturers, and is partnering with Mercedes and other companies to market BlueTec clean diesel technology. Volkswagen has offered a number of its vehicles with a TDI (Turbocharged Direct Injection) engine, which lends class-leading fuel economy to several models. According to the United States Environmental Protection Agency, four of the ten most fuel-efficient vehicles available for sale in the U.S. in 2004 were powered by Volkswagen diesel engines. They were a three-way tie for 8th (TDI Beetle, TDI Golf, TDI Jetta) and ninth, the TDI Jetta Wagon. As of 2007, VW has not yet offered a gasoline/electric hybrid powertrain such as that in the Toyota Prius (though a diesel-electric hybrid 5th generation Jetta was produced as a test vehicle). In addition, all Volkswagen TDI diesel engines produced from 1996 to 2006 can be driven on 100% biodiesel fuel. For the 2007 model year, however, strict U.S. government emissions regulations have forced VW to drop most diesels from their U.S. engine lineup, but a new lineup of diesel engines compatible to U.S. standards are due for 2008. In September 2006, Volkswagen began offering the City Golf and City Jetta only for the Canadian market. Both models were originally theMk4 Golf and Jetta but were later replaced with the Brazilian versions of the Golf Mk4 and Bora. The City Golf and City Jetta were introduced to compete with the Toyota Yaris and Honda Fit. Volkswagen's introduction of such models is seen as a test of the market for a subcompact and, if successful, may be the beginnings of a thriving subcompact market for Volkswagen. When Martin Winterkorn became the eighth postwar CEO of Volkswagen, the company made several personnel changes in Wolfsburg. Though the VW Group already had their presence in India with koda Auto, Volkswagen introduced the Passat and Touareg with TDI engine to India's automobile market in September 2007.

The VW 1L will be available in 2010, in limited numbers. The 1L is a lightweight two-person vehicle made out of a magnesium frame covered by an unpainted carbon-fiber skin. Every component of the vehicle is intended to reduce the vehicle's weight. Aluminum brakes, carbonfiber wheels, titanium hubs, and ceramic bearings all contribute to the vehicle's light weight of a mere 290 kg. To reduce the weight even further, and to increase the aerodynamics of the vehicle, there are no rearview mirrors. Instead, the car is equipped with cameras that display visual information to the driver through the internal LCD screen. The car is extremely fuel-efficient, each gallon of fuel will take you over 235 miles (378 km). The fuel tank holds just 1.7 gallons, making the entire travel distance capability about 400 miles (640 km) per tank. Its top speed is 120 km/h (75 mph), which although not very fast is a welcome tradeoff for the huge savings in fuel consumption. On 15 July 2008 Volkswagen announced that they will construct an automobile assembly plant in Chattanooga, Tennessee. This plant will produce cars specifically designed for North America beginning with the New Midsize Sedan, which will be more competitive with North American market leaders Toyota Camry and Honda Accord. Production is scheduled to begin in early 2011 and is expected to end more than five years of losses in the world's largest auto market. In 9 December 2009, Volkswagen AG and Suzuki reached a common understanding to establish a close long-term strategic partnership. Volkswagen will purchase 19.9% of Suzukis issued shares. In February 2010, Volkswagen announced the latest Polo Blue Motion model with a 1.2 litre TDI three-cylinder common rail diesel engine rated at 75 PS and 133 ftlbf (180 Nm) of torque from 2000 rpm. This model emits 91g/km of CO2 and has a combined cycle fuel consumption of 80.7 mpg. GOALS Responsible management Establish Volkswagen as a world-leading car-maker, both economically and environmentally Enhance responsible supply chain management Improve sustainability communications vis--vis

customers, dealers and the trade Introduce an IT-based CSR information system

Environmental compatibility Fleet average CO2 emissions target: in order to meet both the ambitious EU threshold values and the expectations of our customers, reduce the CO2 emissions of our new-car fleet in Europe (EU 27) by 20 percent over 2006 levels by 2015 Use renewable and secondary raw materials Reduce regulated and non-regulated emissions Position the Volkswagen Group as in best class on environmental issues CO2 targets Reduce greenhouse gas emissions Reduce fuel consumption in the test cycle and in everyday operation Support fuel-efficient driving styles Enable the use of alternative fuels, taking into account regional aspects Enable the use of alternative energy storage systems, taking into account regional aspects Improve resource efficiency Develop and make available alternative powertrain technologies Reduction of limited and non-limited emissions Avoid the use of hazardous and harmful materials; wherever possible comply with the worlds strictest legislation in this field Minimise interior emissions, including odours Reduce exterior and interior noise levels Use Life Cycle Assessments as a controlling instrument Cut energy consumption and CO2 emissions of European production plants by more than ten percent Reduce the release of climate- and ozone-damaging refrigerants Reduce energy consumption in the manufacturing process Optimise waste air treatment technologies

When selecting new/innovative manufacturing processes, check that they are compatible

with the materials flow management system

Social responsibility Improve human resources development Intensify university marketing Improve employee health

Economic agility Increasing returns Ensuring liquidity

Operations Volkswagen has become a large international corporation from where it started and expanded to different worldwide markets and countries. The world headquarters of Volkswagen are located in its home country in Wolfsburg, Germany. Volkswagen AG, owned by the Volkswagen Group, is situated with other car manufacturers including Audi, SEAT, Lamborghini, Bentley, Bugatti, Scania, and Skoda. Volkswagen is currently Europe's largest automaker. For a long time, Volkswagen has had a market share over 20 percent. Worldwide, Volkswagen officially ranks as the 3rd largest manufacturer as measured by OICA in 2009. In 2010, Volkswagen, posted record sales of 6.29 million vehicles, with its global market share at 11.4%. Volkswagens core markets include Germany and China. After overtaking Ford in 2008, Volkswagen is the third largest automaker in the world. Volkswagen has aimed to double its US market share from 2% to 4% for the year 2014, and is aiming to become, sustainably, the world's largest car maker by 2018. Ownership Volkswagen is a publicly traded company, which issued ordinary shares and preferred shares. The ownership structure is complex. The following table shows the current shareholder structure. Note that neither the Porsche Automobile Holding nor the Porsche GmbH are identical with the

Dr. Ing. h.c. F. Porsche AG, which is responsible for the production of Porsche sports cars. The Porsche Automobile Holding is owned by the Porsche family, the Emirate of Qatar, 49.9% are owned by the Volkswagen AG. The Porsche GmbH was sold to the Volkswagen AG.

Shares

Held by

50.76% as of 30 Jan 2009 Porsche Automobil Holding

2.37% as of 30 Jan 2009 Porsche Holding GmbH

20.26% as of 16 Feb 2008 State of Lower Saxony

17% as of 18. Dec 2009

Emirate of Qatar

9.61%

widely held

ORGANIZATIONAL STRUCTURE OF THE GROUP

Volkswagen AG and the Volkswagen Group are managed by the Volkswagen AG Board of Management in accordance with the Volkswagen AG Articles of Association and the rules of procedure for the Volkswagen AG 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 Groups brands and companies. This body consists of Board members and selected top managers with Group management functions.

Each brand in the Volkswagen Group is managed by a senior brand manager. 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 in accordance with the applicable legal framework. Matters that are of importance to the Group as a whole are submitted to the Group Board of Management for approval. 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 individual brands in accordance with the framework laid down by law.

OUTLINE OF THE LEGAL STRUCTURE OF THE GROUP Volkswagen AG is the parent company of the Volkswagen Group. It develops vehicles and components for the Group, but also produces and sells vehicles, in particular Volkswagen brand passenger cars and commercial vehicles. In its function as parent company, Volkswagen AG

holds interests in AUDI AG, SEAT S.A., Volkswagen Financial Services AG and numerous other companies in Germany and abroad. An overview of the significant Group companies can be found in the Notes to the Consolidated Financial Statements. The Volkswagen AG Board of Management is the ultimate body responsible for managing the Group. The Supervisory Board appoints, monitors and advises the Board of Management and is consulted directly on decisions that are of fundamental significance for the Company. Information on the remuneration structure for the Board of Management and the Supervisory Board can be found in the Remuneration Report, in the Notes to the Volkswagen Consolidated Financial Statements and in the Notes to the Annual Financial Statements of Volkswagen AG.

Key Competitors for Volkswagen India

Maruti Suzuki India Limited

Maruti Suzuki India Limited a partial subsidiary ofSuzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India and on 17 September 2007, Maruti Udyog Limited was renamed Maruti Suzuki India Limited. The company's headquarters are located in New Delhi Tata Motors

Tata Motors is Indias largest automobile company, with consolidated revenues of USD 20 billion in 2009-10. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, the world's second largest bus manufacturer, and employs 24,000 workers. Since first rolled out in 1954, Tata Motors has produced and sold over 4 million vehicles in India

Mahindra Group

The Mahindra Group is an Indian multinational conglomerate company headquartered at Mahindra Towers in Mumbai, India, with operations in 79 countries across the globe. The group has a presence in aerospace, agribusiness, aftermarket, automotive, components, construction equipment, defense, energy, farm equipment, finance and insurance, industrial equipment, information technology, leisure and hospitality, logistics, real estate, retail, and two wheelers. It is considered to be one of the most reputable Indian industrial houses with market leadership in utility vehicles as well as tractors in India. The Mahindra Group has a global presence with operations on every continent except Antarctica.

Toyota Kirloskar Motor Private Limited

Toyota Kirloskar Motor Private Limited is joint venture between Toyota Motor Corporationand the Kirloskar Group, for the manufacture and sales of Toyota cars in India.. It currently is the 8th largest car maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra, Chevrolet,Ford, and Honda. The company Toyota Kirloskar Motor Private Limited (TKMPL) according to its mission statement aims to play a major role in the development of the automotive industry and the creation of employment opportunities, not only through its dealer network, but also through ancillary industries with a business philosophy of "Putting Customer First"

Honda Siel Cars India Limited

Honda Siel Cars India Limited (HSCI) is a joint venture between the Honda Motor Company of Japan and Siel Limited, a Siddharth Shriram Group company. It currently is the 7th largest car maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra, Chevrolet andFord. It was begun in December 1995. The venture was begun with the aim of delivering Honda's passenger car models and technologies to the Indian market. The total investment made by the company in India till date is over Rs. 800 crores.[1] Mr. Masahiro Takadegawa is the current President and CEO of HSCI. He took over this post in August 2005.

Hyundai Motors India Limited

Hyundai Motor India Limited is a wholly owned subsidiary of the Hyundai Motor Company inIndia. It is the 2nd largest automobile manufacturer in India after Maruti Suzuki. Hyundai Motor Company is a Korean automaker which along with Kia comprises the Hyundai Kia Automotive Group, the worlds fifth largest automaker as of 2009. As of 2009, it is the world's fastest growing automaker. In 2008, Hyundai (without Kia) ranked as the eighth largest automaker. Headquartered in Seoul, South Korea, Hyundai operates the worlds largest integratedautomobile manufacturing facility[6] in Ulsan, which is capable of producing 1.6 million units annually. The company employs about 75,000 persons around the world. Hyundai vehicles are sold in 193 countries through some 6,000 dealerships and showrooms worldwide. The Hyundai logo, a slanted, stylized H, symbolizes the company shaking hands with its customer .

Chapter-2Company Analysis

Chapter-2 Company Analysis Current issues

2011 Volkswagen Jetta

The Problem: According to Volkswagen, the wiring layout associated with the vehicle alarm and horn is in need of repair. The recall covers all Jetta sedans built from March 2010 through March The Fix: Dealers will reconfigure the wiring layout. Number of Vehicles Potentially Affected: 71,043

The Volkswagen Auto Group (VAG) had originally planned to merge with Porsche

Automobile Holding SE by the second half of 2011 but with massive lawsuits outstanding against Porsche, VAG may have to hold off on the merger until sometime next year leaving Porsche SE scrambling to secure new investment options to carry the company until the merger occurs Climate pigs protest. The opening of the Frankfurt International Motor Show (IAA) is targeted by a Greenpeace protest against the anti-climate model policies of German manufacturers. 20 Greenpeace activists use pink paint to transform three particularly high fuel-consumption models including an Audi and a Volkswagen into climate pigs, complete with snout, ears and curly tails.

European

car

industry

fails

to

meet

ACEA

voluntary

agreement

The European Automobile Manufacturers Association ACEA fails to meet its voluntary

agreement to reduce the average CO2 emissions of its European new-car fleet to 140 grams per kilometre by 2008.

Fifth place in VCD Cars and the Environment manufacturer rankings

In the Cars and the Environment rankings of the German Association for Transport and the Environment (VCD), Volkswagen slips from first place in 2006 to fifth place in 2008 in the category manufacturers environmental commitment. One of the main reasons is because Volkswagen does not disclose the average CO2 emissions of its cars sold in Germany.

Public debate on biofuels hots up Biofuels constitute one component of the

Volkswagen Groups Powertrain and Fuel Strategy. Due to conflicts of interest with food production and supply issues however, biofuels find themselves at the centre of a heated debate.

PEST analysis
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added Legal and rearranged the mnemonic to SLEPT; inserting Environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom. The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and demographic factors. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The growing importance of environmental or ecological factors in the first decade of the 21st century have given rise to green business and encouraged widespread use of an updated version of the PEST framework. STEER analysis systematically considers Sociocultural, Technological, Economic, Ecological, and Regulatory factors. Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include

goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation

Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).

Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.

PEST Analysis of VOLKSWAGEN Political factors . politics or the government keep on changing in India and with each new government the financial policies, trade laws etc changes . the organization has to copw up with the changing political environment . Volkswagen hs to change its production and financial policies with each government change

Environmental factors. Environment has become a major concern for each each organization in automotive sector . Volkswagen has precised on creating fuel efficient vehicles and less polluting vehicles . Global warming a major issue in this modern world Volkswagen has precised on minimizing carbon emission from its cars an during production

Social factors. Automotive sector is influenced by social factors as in a developing country like India people tend to buy a car once in their life time and the want their car to be the best on hence htey precise on old players in the sector rather than new entrants .

Technological factors. Automotive sectors technology is upgrading day by day the company with the latest technology rules the market . Fuel efficiency is a major part of upgrading technology as Indian coustomer mostly prefer Fuel efficiency in their vehicles .

Porters 5 forces model

Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven down to zero. Three of Porter's five forces refer to competition from external sources. The remainder are internal threats. Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally, requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same

profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. A clear example of this is the airline industry. As an industry, profitability is low and yet individual companies, by applying unique business models, have been able to make a return in excess of the industry average. Porter's five forces include - three forces from 'horizontal' competition: threat of substitute products, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers. This five forces analysis, is just one part of the complete Porter strategic models. The other elements are the value chain and the generic strategies. The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will fall towards zero (perfect competition). The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and nonperforming firms can exit easily.

Economies of product differences Brand equity Switching costs or sunk costs Capital requirements Access to distribution Customer loyalty to established brands Absolute cost Industry profitability; the more profitable the industry the more attractive it will be to new competitors

The intensity of competitive rivalry For most industries, the intensity of competitive rivalry is the major determinant of the competitiveness of the industry.

Sustainable competitive advantage through innovation Competition between online and offline

companies; click-and-mortar -v- slags on a bridge Level of advertising expense

Powerful competitive strategy The visibility of proprietary items on the Web used by a company which can intensify competitive pressures on their rivals.

How will competition react to a certain behavior by another firm? Competitive rivalry is likely to be based on dimensions such as price, quality, and innovation. products Technological and services. advances protect that are companies from competition. This applies to Companies successful with introducing new technology, are able to charge higher prices and achieve higher profits, until competitors imitate them. Examples of recent technology advantage in have been mp3 players and mobile telephones. Vertical integration is a strategy to reduce a business' own cost and thereby intensify pressure on its rival.

The threat of substitute products or services

The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives:

Buyer propensity to substitute Relative price performance of substitute Buyer switching costs Perceived level of product differentiation Number of substitute products available in the market Ease of substitution. Information-based products are more prone to substitution, as online product can easily replace material product.

Substandard product Quality depreciation

The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes.

Buyer concentration to firm concentration ratio Degree of dependency upon existing channels of distribution Bargaining leverage, particularly in industries with high fixed costs

Buyer volume Buyer switching costs relative to firm switching costs

Buyer information availability Ability to backward integrate Availability of existing substitute products

Buyer price sensitivity Differential advantage (uniqueness) of industry products RFM Analysis

The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for unique resources.

Supplier switching costs relative to firm switching costs Degree of differentiation of inputs Impact of inputs on cost or differentiation Presence of substitute inputs Strength of distribution channel Supplier concentration to firm concentration ratio Employee solidarity (e.g. labor unions) Supplier competition - ability to forward vertically integrate and cut out the BUYER

Porters 5 forces model of VOLKSWAGEN The threat of the entry of new competitors

Automotive industry is very highly capital intensive and to enter as new player in the industry is very difficult . The government rules and regulation are very rigid for entry in the industry. Customers of automotive industry do not tend to attract towards new entrants in the industry. Hence Volkswagen does not face any severe threat from the new entrants of the industry.

The intensity of competitive rivalry The intensity of competitive rivalry is very high in automotive industry as the organization with best brand name and best promotion, rules the market . In Indian automotive industry the intensity of competition is very high as competition in the Indian markets . The threat of substitute products or service India is a developing country and with its economic development, the public mode of transport is also developing . If we consider Delhi, the majority of population of Delhi prefer metro (DMRC) in comparison to private transport . And in the country like India where people are so much adjusting that a family of four adjusts in a single scooter or a motorcycle so they do not consider the need of a car . On the contrary, the upper middle class society has minimum four car for a three member family . the old leaders have a established their brand in the market . Volkswagen faces high intensity of

The bargaining power of customers

The customers of Volkswagen have mixed bargaining power in India as some of their cars are produced in the country and some are imported. Hence the Indian customers do have more bargaining power in comparison to others because Indians do not prefer imported cars because taxes, duties, which increase the price of the car.

The bargaining power of suppliers

Volkswagen precise on maintaining relations with its suppliers . Volkswagen has considered development of suppliers in its every major decision . Hence Volkswagen has high number of suppliers. Nor their suppliers posses any major bargaining power and neither they require bargaining power .

SWOT Analysis

SWOT

analysis

is

a strategic

planning method and Threats involved

used in

to

evaluate in

the Strengths, Weaknesses, Opportunities,

a projector

a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning has been the subject of much research. Strengths: characteristics of the business or team that give it an advantage over others in the industry. Weaknesses: are characteristics that place the firm at a disadvantage relative to others. Opportunities: external chances to make greater sales or profits in the environment. Threats: external elements in the environment that could cause trouble for the business. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development .

SWOT analysis of VOLKSWAGEN 1. Strengths

It stands apart from all other cars on the road - Volkswagen Chairman Ferdinand

Piech is even amazed at the cars appeal. It is different, and it makes you feel different, he said.

Its like a magnet.2 Its curved outline, rounded fenders and oversized lights separate it from the other vehicles on the road.

The biggest-selling car design in history gets even better - Its cute and trendy, more

comfortable than its predecessor and there are a whole lot more luxuries and new technologies crammed into this nostalgic Beetle.

The New Beetles safety surpasses the rest - The 1998 model of the New Beetle is the Fuel efficiency - The oil crisis in 1973-1974 not only caused a fuel shortage, but also

safest small car that has been tested by the Insurance Institute for Highway Safety. 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 firms market position.

2.

Weaknesses

Commodity Price Risks VOLKSWAGEN commodity price risks to higher costs due to changes in prices of inputs such as steel, aluminum, plastics, labour and rubber, which go into the production of automobiles. In order to mitigate these risks, the company continues to attempts to enter into long term contracts based on its projections of prices and outsourcing labour . In a volatile commodity market, where your company gives top priority to ensuring smooth availability of inputs, long term contracts are helpful. They also help minimize the impact of growing input prices. Conversely, long term contracts dilute the benefits, if any of a decline in input prices. 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.

Brand loyalties favor Indian vehicles - The preference for Indian vehicles is more than three times higher than that of European vehicles. 78 percent of people surveyed in a Pole said that they would definitely or probably consider buying an Indian vehicle while only 25 percent said that of a European brand, such as Volkswagen .

Opportunities

The New Beetle has a global appeal - Americans arent the only ones who love this car.

There is much opportunity for growth internationally. Japan is predicted to have the potential to be the second-largest New Beetle market. There is also hope the Beetle mania will spread across all of Asia.

Capitalize on nostalgic cravings - The old Bug was the biggest-selling car design in

history. Baby boomers loved their groovy cars as young adults and todays young adults are looking to rediscover the age that passed. The Beetle is a strong representation of the past and may find itself setting trends for the future 3.

Threats Can trendy stay alive? - Will the New Beetle survive as long as its predecessor? We see Can the Beetle be duplicated? - Would another car company trying to duplicate

many trends come and go. Does the New Beetle have what it takes to survive? succeed? If the success of the New Beetle continues there will be other car makers wanting to hop a ride on the bandwagon. Could the New Beetle survive if another company could produce more cars of similar attributes faster?

Will history deter some drivers? - The first Beetles were manufactured in Wolfsburg,

Germany, at a plant built by the Nazis. Although the war is long since over, there are still many people who will treat the Volkswagen Beetle with the same prejudice and distaste they feel for the actions of the Nazis. 3.5 Threats from Competitors

Maruti Udyog Limited

For the fiscal year ended December 2006, Maruti generated revenues of $193,517 million, an increase of 4.3% from the previous year. The company reported a net income of $2,805 million for fiscal 2005, down 26.6% from the previous year. Tata Motors Limited In the 2006 fiscal year, Tata Motors generated revenues of $3,542.2 million (INR154,935.2 million). The company made a net profit of $185 million (INR8,103.4 million) in the 2006 fiscal year.

USP of VOLKSWAGEN
Chasing maximum volume, VW strictly avoids offending anyone with the design of the 2011 Jetta. It looks like a joint venture between the Chinese taxicab drivers union and the Mexican phone company. Applesauce served in a Dixie Cup is more thrilling. In business school, they teach future pinstripes to look for the USPthe unique selling proposition. Volkswagens USP was that, for many years, it was the only inexpensive Euro brand sold in America. Unlike Renault and Fiat, it held on against the Asian tsunami by offering slightly higher sophistication at a slightly higher price and only slightly worse quality. That is, until VW decided to emulate Mercedes-Benz with silk purses like the Touareg and Phaeton. Sophistication and prices both shot up, but quality and sales didnt. Last year, VW sold more vehicles in Brazil than in the U.S., which is the worlds second-largest car market after China.

Now, instead of looking up, VW is looking down. Beware, Hyundai, offalling Jettas.

Compared with the 2010 model, VW has whacked $1590 off the Jettas starting price, which is now $16,765 for the coach-class, 115-hp, 2.0-liter S that includes air conditioning, remote locking, a CD stereo, and power heated side mirrors. Even when equipped with a five-speed manual, you dont get to 60 mph in less than 11 seconds, thanks in part to a stability-control system with no off button. Apparently, off buttons add a lot of extra cost. But at least you wont need gas pumps very often, with a highway fuel-economy figure of 34 mpg. We managed an equally impressivefor us29 observed mpg.

After hitting an Audi-like high point in the 200510 fifth generation, you can almost hear the Jettas interior screaming as its costs have been cut. The few remaining soft-touch surfaces have now mostly iced over with hard plastic. However, if you can accept the cockpit downscaling, the rest of this new Jetta still feels like a proud son of Germanyalbeit one made inMexico especially in the particular heft of the doors and the satisfying whump! theymake when they close. The Jettas dimensions have been stretched in length and wheelbase, and the car seems airy compared with others at its price, especially in the back seat and trunk. A multilink rear suspension has been flushed for a simpler torsion-beam setup, but the steering response remains as perky as one can expect from 195/65 tires on 15-inch steel rims, and the Jetta holds a set through corners without anyunruly wallowing or harsh clumping.

Toyota Corollas and Hyundai Elantras could definitely take a lesson; a Mazda 3 is livelier, but it doesnt offer the VWs cabin serenity. So, some sophistication survived the hatchet. The Jetta is what VWs pinstripes believe the American mass market wants. Hows that for a USP? Not very unique.

Chapter-3 Marketing Strategy

Marketing strategy It is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage A marketing strategy should be centered around the key concept that customer satisfaction is the main goal.

Importance of a marketing strategy Strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat". Sun Tzu The Art of War. Marketing Strategy is something that helps companies achieves Marketing objectives. Marketing objectives help achieve corporate objectives and corporate objectives aim to achieve a competitive advantage over rival organizations. Firstly, a Managing Director or senior management team, or executive board of directors (whoever is in charge) decides on overall In order to achieve this objective the board might split it corporate objectives. One corporate objective might be to increase sales by X%. into smaller bite sized objectives, assigned to different departments. Marketing might get the following objective - Identify 2 new customer segments, or increase brand awareness by X%.

Marketing mix The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried. A prominent marketer, E. Jerome McCarthy, proposed a Four P classification in 1960, which has seen wide use. The Four P's concept is explained in most marketing textbooks and classes

Marketing mix is often referred towards the "Four P's" Four Ps of Marketing Product - It is a tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Packaging also needs to be taken into consideration. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the product approaches market saturation. To retain its competitiveness in the market, product differentiation is required and is one of the strategies to differentiate a product from its competitors.

Price The price is the amount a customer pays for the product. The business may increase or decrease the price of product if other stores have the same product.

Place Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet

Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion.

Marketing mix of Volkswagen 1. Product Unique brand identity for each name plate

Each name under Volkswagen is a brand from Volkswagen itself to Bugatti . Each brand has it seprate and special identity .

Complete range

Volkswagen deals in complete range of cars from sedans to suv . Mostly standardized products with minor adaption's

2.

price Setting price with regard to competitors

Volkswagen has always priced its crs with regard to its comptetiors . Price discrimination across the region

Volkswagen has price discrimination across various parts of the world . 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 . No price competition in the emerging markets

As Volkswagen has price discrimination it also has no price competition in emerging markets Strict cost controlling

Volkswagen precise on cost reduction and control

3.

Place Development of distribution partners

Volkswagen has prcised on development of its distributers . Separate distribution channel for each brand

Each brand under Volkswagen has its own distribution channel .

 4.

International standardization of dealers Promotion Glocalized communication Glocalisation (or glocalization) is a portmanteau word of globalization and localization.

By definition, the term glocal refers to the individual, group, division, unit, organisation, and community which is willing and able to think globally and act locally. The media presents another important realm in which glocalization is made apparent. A powerful means if making connections on an international scale, the media is nonetheless a tool also capable of having an impact on a more local stage. Keith Hampton offers a meaningful example of this reality through his study of Internet use by local communities of urban underclass citizens. Developing a naturalistic experiment that examined use of the Internet for communication at the neighborhood level, Hampton was able to identify the role of the media in encouraging local social cohesion and community engagement. Examining a topic of interest in which studies are presently quite limited, Hampton was able to determine that connection across distance may not be the only affordance of Internet-based communication Rather, according to his studies, when a critical mass of individuals within a shared local environment adopts the Internet for communication, they cultivate an increased awareness that this tool affords communication locally as much as it does across distant space; in this light, use of the Internet for communication at the local level offers a strong example of the phenomenon of glocalization Allowing for removal or reduction of barriers such as fear or embarrassment to communicate, timing, spatial obstacles, urban disorder, and victimization, communication by Internet thus presents a means for even local, disadvantaged communities to scale something down to a defined level appropriate for their purposes Encouraging social interaction and allowing for collective communication within a small space faced still with challenges to communication, such a tool ultimately allows for contextual constraints hindering collective action and dialogue within a community to be reduced.

Brand advertising

Volkswagen advertises each brands seprately Emotionalization

Emotionalization is To give something an emotional quality . Volkswagen has attached a emotional quality to each car it produces .

BEETLE a cars which It is different, and it makes you feel different,

Name of each car attaches a emotion with the car .

STP Analysis
Segmenting

Segmenting is the process of dividing the market into segments based on customer characteristics and needs. The main activity segmenting consists of four sub activities. These are: 1. determining who the actual and potential customers are 2. identifying segments

3. analyzing the intensity of competitors in the market 4. selecting the attractive customer segments. The first, second and fourth steps are described as market segmentation. The third step of analyzing the intensity of the competitors is added to the process of segmenting in this process description. When different segments are identified, it is not necessary that these segments are attractive to target. A company is almost never alone in a market -- competitors have a great influence on the attractiveness of entering a certain market. When there is a high intensity of competitors, it is hard to obtain a profitable market share and a company may decide not to enter a certain market. The third step of segmenting is the first part of the topic of competitor analysis. The need for segmenting a market is based on the fact that no market is homogeneous. For one product the market can be divided in different customer groups. The variables used for this segmenting in these groups are usually geographical, psychographical, behavioral and demographic variables. This results in segments which are homogeneous within and heterogeneous between each other. When these segments are known, it is important to decide on which market to target. Not every market is an attractive market to enter. A little filtering has been done in this activity, but there are more factors to take in account before targeting a certain market segment. This process is called targeting. Targeting

After the most attractive segments are selected, a company should not directly start targeting all these segments -- other important factors come into play in defining a target market. Four sub activities form the basis for deciding on which segments will actually be targeted. The four sub activities within targeting are: 1. defining the abilities of the company and resources needed to enter a market 2. analyzing competitors on their resources and skills 3. considering the companys abilities compared to the competitors' abilities 4. deciding on the actual target markets. The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the company's abilities to those of its

competitors. The results of this analysis leads to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share. Obviously, targeting can only be done when segments have been defined, as these segments allow firms to analyze the competitors in this market. When the process of targeting is ended, the markets to target are selected, but the way to use marketing in these markets is not yet defined. To decide on the actual marketing strategy, knowledge of the differential advantages of each segment is needed Positioning

When the list of target markets is made, a company might want to start on deciding on a good marketing mix directly. But an important step before developing the marketing mix is deciding on how to create an identity or image of the product in the mind of the customer. Every segment is different from the others, so different customers with different ideas of what they expect from the product. In the process of positioning the company: 1. identifies the differential advantages in each segment 2. decides on a different positioning concept for each of these segments. This process is described at the topic positioning, here different concepts of positioning are given. The process-data model shows the concepts resulting from the different activities before and within positioning. The model shows how the predefined concepts are the basis for the positioning statement. The analyses done of the market, competitors and abilities of the company are necessary to create a good positioning statement. When the positioning statement is created, one can start on creating the marketing mix STP Analysis of Volkswagen Segmentation

The New Beetle is unique from other cars in that its market is huge. The range of interest for the automobiles is from 16-year-olds to 65-year-olds. Although the car is under $20,000 it appeals to drivers of many social classes. From college students to CEOs the Beetle has found its way into garages of all classes. What do all of these consumers have in common? Simple, theyre tired of driving the same old pod-like cars

and the nostalgia the Beetle gives off is comforting and energizing. Targeting

Volkswagen executives refuse to be pinned down on the New Beetles target market saying only that it is designed for optimists. Yet its clearly aiming wide. While many of the ads sport jokes targeted at the previous Beetle generation, others are aimed squarely at Gen-X.6 Edmunds web page on automobile reviews identifies the target buyer as men, women, young people or people who are simply young at heart. The New Beetle is marketed as classic, classy, unique, and economical. Its for the kind of person who likes to have fun, appear fun, and stand apart from a crowd. The average U.S. buyers annual family income is $86,000. This is higher than the average income of buyers of even pricier Volkswagen models which holds an average of $63,000. The typical buyer is from the baby boom generation averaging 44 years of age, more than half are married, only one-third have children at home and slightly more than half of the buyers are male.7 Many of the trendy Beetles are bought as gifts for birthdays, anniversaries or other occasions. Broken down I would identify the target markets as: Primary: Baby boomers, married with no children at home, male, family income of about $86,000 a year. Secondary: Generation X, married, upper-middle class or lower-upper class. Tertiary: Generation Y, single, middle class. I think that many of the cars for this segment will have a separate purchaser and user. For example, parents buying the car for their child. Positioning

When Volkswagen says Drivers Wanted, theyre not kidding. Volkswagens American market share has dropped below one percent in recent years. After VW dropped the Beetle from production in 1978 the company was never the same. By 1993 the company was just about ready to drop out of the American market. Thats when Chairman Ferdinand Piech ordered up a prototype of a new Beetle as a last attempt to boost sales. The introduction of the New Beetle to the American market did just that.

VW celebrated a 59 percent increase in worldwide sales last year and a 44.6 percent increase this year. I have not found their market share as of 1999 but an increase such as the one they experienced is sure to raise their standings. Using product differentiation we are positioning the Volkswagen as the most versatile, convenient, value added car model for above target market used. The marketing strategy will be focused on promoting the car as economic car for the next generation

Boston Consultancy Group (BCG Matrix)

This product portfolio matrix classifies product lines into four categories. The BCG models suggests that organisations should have a healthy balance of products within their range. The Boston Consultancy Group classified these products as following: Dogs These are products which have low market shares and low market growth rates. The options for many companies is to phase these products out, however some organisation do go for the strategy ofre-inventing and injecting new life into the product. (see Heinz Case Study) Question Mark/Problem Child

These are products with low market share but operate in high market growth rates. The company puts a lot of resources in this product in the hope that it will eventually increase market share and generate cash returns in the future. Star Stars have high market shares that operate in growing markets. The product at this stage should be generating positive returns for the company. Cash Cow Cash Cow are products at the mature stage of the lifecycle, they generate high amounts of cash for the company, but growth rate is slowing. There are chances that the product may slip into decline, appropriate marketing mix strategies should be employed to try to prevent this from happening.

BCG Matrix of Volkswagen Dogs

Volkswagen Beetle a car of a special class, A car which stands aprt from the cars of the same segemnet is in this segment as only 25 beetle were sold in the market from April 2010 to February 2011 Question Mark/Problem Child

Volkswagen jetta a car in sedan segment has low market share but the company has high expectation from the car . AS it has been just introduced by the company in the markets with its various models .

Star

Volkswagen Polo And Vento Named Key Contributors To Sales Growth Of Volkswagen In 2010. Polo and Vento are the two star cars for Volkswagen as had major contribution in the sale figures of the organization .

Chapter-4 Financial Analysis

Sources of finance

Volkswagen Bank GmbH (VW Bank) is a limited liability company wholly owned by Volkswagen Financial Services AG (VWFS), a 100% owned subsidiary of Volkswagen AG. As of 30 June 2010, the bank reported a consolidated asset base of 34.0 billion. Volkswagen AG and its subsidiaries comprise Volkswagen Group (VW Group), a leading automotive manufacturer and provider of associated financial services. VW Bank operates within VW Groups Financial Services division, providing a range of banking services to both private and business customers. The bank is one of the largest providers of internet-based banking services in Germany. As of 31 December 2009, its VW direct banking unit was one of the largest direct banks in the European automotive financial services market with around 939,000 customers. VW Bank was founded in 1949 as Volkswagen Finanzierungsgesellschaft mbH, to finance vehicle purchases and to support Volkswagen AG sales. VW Bank, in conjunction with VWFS, offers a range of banking and financial services to both the VW Group and its customers, including loans, leasing products (Volkswagen Leasing GmbH), insurance brokerage, trust services, direct banking services and fleet management (LeasePlan Corporation N.V.). The bank provides products and services mainly in the following business areas: Financing business: VW Bank offers financing services including automobile financing to private and business customers and to VW Group dealers. The banks subsidiary AutoEuropa Bank provides brand-independent financial services in the passenger car and leisure market, and used vehicle financing facilities, respectively. Leasing business: The bank provides both finance and operating leasing products. VW Bank, through Volkswagen Leasing GmbH, leases individual vehicles as well as vehicle fleets to private and corporate customers.

Direct banking business: VW Bank offers a range of direct banking services including account management, installment loans, savings and investment products, credit cards and securities transactions to private customers. In addition, the bank provides overnight deposit accounts as well as a range of payment transaction services to corporate clients. Agency business: VW Bank provides insurance agency services in connection with automobile financing, loans secured by charges entered in the land registry and other long-term forms of financing, as well as fund and stock market investments. CONSOLIDATED BALANCE SHEET STRUCTURE At 199.4 billion, the Volkswagen Groups total assets on December 31, 2010 exceeded the prior-year figure by 12.5%. The Automotive Division made a relatively large contribution to this development due to the expansion of its business and the capital increase. The structure of the consolidated balance sheet as of December 31, 2010 can be seen from the chart below. The Volkswagen Groups equity ratio amounted to 24.4% (21.1%). CONSOLIDATED BALANCE SHEET STRUCTURE 2010 as percent

AUTOMOTIVE DIVISION BALANCE SHEET STRUCTURE In December 2009, Volkswagen AG acquired 49.9% of the shares of Porsche Zwischenholding GmbH, Stuttgart. Porsche Zwischenholding GmbH holds 100% of the shares of Dr. Ing. h.c. F. Porsche AG, Stuttgart. On the basis of the agreements under company law with

Porsche Automobile Holding SE, Volkswagen shares control of Porsche Zwischenholding GmbH and its direct and indirect subsidiaries. The shares of Porsche Zwischenholding GmbH were accounted for using the equity method. Effective January 15, 2010, Volkswagen acquired 19.89% of the shares of Suzuki Motor Corporation, Hamamatsu, Japan, for 1.7 billion. Following the exercise of outstanding convertible bonds by other investors, Volkswagens interest in Suzuki fell to 19.37%. After acquiring additional shares, Volkswagen increased its interest again to 19.89% as of June 30, 2010. The shares are measured using the equity method. Allocation of the purchase price to Suzukis assets and liabilities has only been preliminary so far. At the end of fiscal 2010, the Automotive Divisions noncurrent assets were 18.5% higher than in the previous year. This is mainly attributable to the increased carrying amounts of our equityaccounted investments. Property, plant and equipment was up by 5.7% due to the expansion of new production facilities. The expansion of business contributed to the fact that current assets were 11.5% higher year-on-year. At the end of the reporting period, the Automotive Divisions equity attributable to shareholders of Volkswagen AG amounted to 37.0 billion; the 35.6% increase compared with December 31, 2009 related primarily to the capital increase and the positive earnings trend. Conversely, higher actuarial losses for pension provisions recognized directly in other comprehensive income and the decline in the fair values of derivative financial instruments had a negative effect. Including non controlling interests, which chiefly relate to non controlling interests in Scania, equity amounted to 39.5 billion, up 10.3 billion on the previous year. At 35.5% (30.2%), the equity ratio was above the 2009 figure. Higher pension provisions in particular led to a 7.2% increase in noncurrent liabilities. Within current liabilities, which rose by 6.0% due to the positive business development, financial liabilities declined sharply. The figures for the Automotive Division also contain the elimination of intra-Group transactions between the Automotive and Financial Services divisions. As the current financial liabilities for the primary Automotive Division were lower than the loans granted to the Financial Services Division, a negative amount was disclosed for the reporting period.

At 111.5 billion, the Automotive Divisions total assets as of December 31, 2010 were 15.3% higher than in 2009. FINANCIAL SERVICES DIVISION BALANCE SHEET STRUCTURE At the end of fiscal year 2010, the Financial Services Divisions total assets amounted to 87.9 billion, 7.4 billion higher than in the previous year. Noncurrent assets rose by 9.2%, mainly because of an increase in financial services receivables and leasing and rental assets resulting from exchange rate-related and volume-related factors. Current assets were up 9.1% on year-end 2009. Higher financial services receivables lifted this figure. Cash and cash equivalents decreased to 1.3 billion (1.9 billion). Overall, the Financial Services Division accounted for approximately 44% of the Volkswagen Groups assets as of the reporting date. The Financial Services Divisions equity amounted to 9.2 billion (8.2 billion) on December 31, 2010. The increase related in particular to improved earnings, positive currency hedging effects and a capital increase by Volkswagen AG. The equity ratio rose slightly to 10.4% (10.2%). Noncurrent liabilities were up by 2.3% primarily because of higher financial liabilities due to volume and exchange rate-related factors. The expansion of business and exchange rate effects also led to an increase in current liabilities. Deposits at Volkswagen Bank direct rose by 0.6 billion to 18.9 billion. The debt/equity ratio remained unchanged at 8:1 CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31 Volkswagen million Group 2010 2009 Financial Automotive Services 2010 2009 2010 2009

Assets 52,41 Noncurrent assets Intangible assets 113,457 99,402 13,104 12,907 62,133 1 51,325 12,79 13,023 0 82 46,992 117

CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31 Volkswagen million Property, plant and equipment Leasing and rental assets Financial services receivables Noncurrent receivables and other financial assets2 Current assets Inventories Financial services receivables Current receivables and other financial assets Marketable securities Cash, cash equivalents and time deposits Total assets Equity and Liabilities 29,25 Equity 48,712 Equity attributable to shareholders of Volkswagen AG Noncontrolling interests Noncurrent liabilities Noncurrent financial liabilities Provisions for pensions Other noncurrent liabilities3 45,978 2,734 73,781 37,159 15,432 21,190 37,430 35,281 2,149 70,215 36,993 13,936 19,286 39,546 3 9,166 27,32 37,048 1 2,498 8,930 1,932 236 39,50 8,177 7,960 217 30,707 27,721 142 2,843 Group 2010 25,847 11,812 35,817 26,877 85,936 17,631 30,164 13,970 5,501 18,670 2009 24,444 10,288 33,174 18,589 77,776 14,124 27,403 12,381 3,330 20,539 Financial Automotive Services 2010 2009 2010 2009 24,06 25,440 4 384 22 324 407 11,428 380 9,964 33,174 3,356 33,480 749 27,564 3,188 98 1,881 80,471

35,840 15,23

23,309 3 3,568 44,29 49,394 6 36,541 13,37 16,393 5 238 1,238 161 30,403

10,446 9,193 3,524 5,375 3,231 126 18,65

17,419 8 1,251 111,52 96,70 7 87,866

199,393 177,178 7

42,364 8 31,417 8,989 9,272 28,170 13,79 15,265 3 167 18,110 16,44 3,080

CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31 Volkswagen million Group 2010 2009 Financial Automotive Services 2010 2009 2010 2009 3 27,94 29,617 7 47,283 3,143 2,156 42,996 11,628 9,734 916 16,05 21,132 7 3,372 111,52 96,70 7 87,866 41,587 38,450 491 2,645 80,471

Current liabilities Current financial liabilities Trade payables Other current liabilities Total equity and liabilities

76,900 39,852 12,544 24,504

69,534 40,606 10,225 18,703

199,393 177,178 7

Value Added Statement

The value added statement indicates the added value generated by a company in the past fiscal year as its contribution to the gross domestic product of its home country, and how it is appropriated. In fiscal year 2010, the value added generated by the Volkswagen Group was 49.5% higher than in the previous year. Since fiscal year 2009, employees in the passive phase of their early retirement have no longer been included when calculating added value per employee. Added value per employee in the reporting period was 97.7 thousand (+42.7%).

VALUE ADDED GENERATED BY THE VOLKSWAGEN GROUP Source of funds in million Sales revenue Other income Cost of materials Depreciation and amortization Other upfront expenditures Value added

2010 126,875 10,787 79,394 10,097 15,250 32,922

2009 105,187 9,401 67,925 8,877 15,767 22,019

Appropriation of funds in million to shareholders (dividend) to employees (wages, salaries, benefits) to the state (taxes, duties) to creditors (interest expense) to the Company (reserves) Value added

2010 1,034 19,027 3,105 3,563 6,193 32,922

% 3.1 57.8 9.5 10.8 18.8 100.0

2009 647 16,027 1,152 3,928 265 22,019

% 2.9 72.8 5.2 17.8 1.2 100.0

Value contribution as a control variable The Volkswagen Groups financial target system centers on continuously and sustainably increasing the value of the Company. In order to use resources in the Automotive Division efficiently and to measure the success of this, we have been using value contribution 1, a control variable linked to the cost of capital, for a number of years. The concept of value-based management allows the success of our innovative, environmentally oriented product portfolio to be evaluated. This concept also enables the earnings strength of individual business units and projects, such as the new plants in India, Russia and North America, to be measured. COMPONENTS OF VALUE CONTRIBUTION Value contribution is calculated using operating profit after tax and the opportunity cost of invested capital. Operating profit shows the economic performance of the Automotive Division and is initially a pre-tax figure. Using the various international income tax rates of the relevant companies, we assume an overall average tax rate of 30% when calculating the operating profit after tax. The cost of capital is multiplied by the invested capital to give the opportunity cost of capital. Invested capital is calculated as total operating assets (property, plant and equipment, intangible

assets, inventories and receivables) less non-interest-bearing liabilities (trade payables and payments on account received). As the concept of value-based management only covers our operating activities, assets relating to investments in subsidiaries and associates and the investment of cash funds are not included when calculating invested capital. Interest charged on these assets is reported in the financial result.

The Board of Management of Volkswagen AG believes that the Groups economic position is positive. The Volkswagen Group has overcome the negative effects of the global financial and economic crisis and significantly increased its earnings power in the reporting period. Sales revenue and earnings substantially exceeded the prior-year figures, allowing the Group to close fiscal year 2010 with record profit. This success is based on our disciplined cost and investment management and the continuous optimization of our processes, among other things. The capital increase and the investment in the Suzuki Motor Corporation had a significant influence on the Volkswagen Groups financial position in fiscal year 2010. Against the background of the planned creation of an integrated automotive group with Porsche, the capital increase strengthened the Groups financial stability and flexibility. Together with positive business growth, it also enabled a further significant year-on-year improvement in the Automotive Divisions liquidity position. An overview of the development of the Volkswagen Group over the past five years can be found in Key Financial Figures and the Five-Year Review. More information on the economic position of the Volkswagen Group by brand and business field can be found in the Divisions chapter. Volkswagen Aktiengesellschaft announced its key figures for fiscal year 2010 in an ad hoc release today. With sales revenue of 126.9 (2009: 105.2) billion the Group reported an operating profit of 7.1 (1.9) billion. Fiscal year 2010 was the best year in the history of the Volkswagen Group.Volkswagen already provided impressive proof of its robustness during the crisis and our Group is now following that up by leading the field during the economic recovery

as well, the Chairman of the Board of Management of Volkswagen Aktiengesellschaft, Prof. Dr. Martin Winterkorn, said in Wolfsburg on Friday. Our broad and environmentally-friendly model range coupled with our financial strength and the clear strategic orientation of our multi-brand group have contributed to this success. Volkswagen is following a solid, profitable growth course, Winterkorn underlined. The outlook for the current year is good, too despite all economic uncertainties. Volkswagen will play a decisive role in shaping the growth anticipated for world markets, Winterkorn added. Volkswagen presents 2010 consolidated financial statements: - Volkswagen Group generates record profit in fiscal year 2010 - Operating profit up significantly on prior-year level at EUR 7.1 billion (EUR 1.9 billion) - Profit before tax increases by EUR 7.7 billion to EUR 9.0 billion; positive effects from equity-accounted investments and from measurement of put/call rights relating to Porsche Zwischenholding GmbH at the reporting date - Board of Management and Supervisory Board propose increase in the dividend for Volkswagen shareholders to EUR 2.20 per ordinary share and EUR 2.26 per preferred share - Deliveries top the 7 million mark for the first time at 7.2 million vehicles (+ 13.7 percent); market share increased further - Business expansion and implemented capital increase strengthen Groups financial stability and flexibility in the context of the planned creation of an integrated automotive group with Porsche - Further rise in Automotive Divisions net liquidity against last years high figure to EUR 18.6 billion (EUR 10.6 billion) Determining current cost of capital

The cost of capital is the weighted average of the required rates of return on equity and debt. The cost of equity is determined using the Capital Asset Pricing Model (CAPM). This model uses the yield on long-term risk-free Bunds, increased by the risk premium attaching to investments in the equity market. The risk premium comprises a general market risk and a specific business risk. The general risk premium, which reflects the general risk of a capital investment in the equity market and focuses on the Morgan Stanley Capital International (MSCI) World Index, is 5%. From 2010, the specific business risk of price fluctuations in Volkswagen preferred shares is modeled as part of the beta factor calculation compared with the MSCI World Index. The switch in benchmark index from the DAX to the MSCI World Index was necessary because Volkswagen shares experienced considerable price fluctuations in 2008 and 2009, and the share class in the DAX was changed to preferred shares in 2010. The MSCI World Index sets a standard that reflects a global capital market benchmark for investors. The analysis period for the beta factor calculation relates to a five-year period with annual beta figures on a daily basis and an average subsequently being calculated. A beta factor of 0.99 was determined for 2010 (previous year: 0.871). COST OF CAPITAL AFTER TAX AUTOMOTIVE DIVISION % Risk-free rate MSCI World Index market risk premium Volkswagen-specific risk premium (Volkswagen beta factor) Cost of equity after tax Cost of debt Tax Cost of debt after tax Proportion of equity Proportion of debt

2010 3.0 5.0 0.1 (0.99) 7.9 4.3 1.3 3.0 66.7 33.3

2009 4.1 5.0 0.7 (0.87)1 8.4 5.5 1.6 3.9 66.7 33.3

COST OF CAPITAL AFTER TAX AUTOMOTIVE DIVISION % Cost of capital after tax NET INCOME FOR THE YEAR

2010 6.3

2009 6.9

As a result of the expansion of business, Volkswagen AGs sales rose to 57.2 billion in fiscal year 2010, a year-on-year increase of 19.6%. The proportion of sales generated outside Germany was 62.4% (53.5%). The cost of sales rose 11.8% year-on-year to 53.1 billion due to volume-related factors. Gross profit increased to 4.2 billion. The business expansion led to higher selling, general and administrative expenses than at the end of 2009. The ratio of selling, general and administrative expenses to sales was reduced year-on-year to 8.9% (10.0%). At 1.0 billion, the other operating result was down 0.7 billion versus the previous year, mainly on account of lower gains from currency hedging transactions. The financial result rose by 15.1% to 4.8 billion, which was due in particular to higher income from profit and loss transfer agreements. At 4.9 billion, Volkswagen AGs result from ordinary activities was much higher than in fiscal year 2009 (1.5 billion). The extraordinary result comprises the effects from the transition to the new accounting rules in the German Commercial Code following the introduction of the Bilanzrechtsmodernisierungsgesetz (BilMoG German Accounting Law Modernization Act). This item primarily includes the expense recognized for the remeasurement of pension provisions. After deducting income taxes, net income amounted to 1.5 billion (1.1 billion).

INCOME STATEMENT OF VOLKSWAGEN AG million * Including write-downs of financial assets. Sales Cost of sales Gross profit on sales Selling, general and administrative expenses Other operating result Financial result* Result from ordinary activities Extraordinary result Taxes on income Net income for the year Retained profits brought forward Appropriations to revenue reserves Net retained profits 2010 57,243 53,059 +4,184 5,090 +1,043 +4,791 +4,928 1,789 1,589 1,550 130 640 1,039 2009 47,864 47,454 +410 4,778 +1,718 +4,163 +1,512 430 1,082 2 200 884

Chapter-5 HR Polices & recruitment

HR Policies of Volkswagen Volkswagen was the first and for a long time only major corporation to establish and follow guidelines for the advancement of women; ours have been in place since 1989. We have designed targeted measures to further increase the percentage of women in the company. Equal opportunity is a component of our "18plus" strategy. Since 1998 we have had a mentoring scheme to systematically increase the number of women in management. The initiative is now a well-established part of the Volkswagen HR development programme, having been through 16 cycles with a total of over 290 participants. In addition, last year we held the competition for the Woman Driving Award for the second time in Germany. The award recognises young female engineers for outstanding thesis projects on automotive topics. At Volkswagen Commercial Vehicles our KICK programme is designed to educate female apprentices in the commercial and technical fields concerning their career perspectives and professional opportunities. And with our development project for female skilled workers Female Master Mentoring we are aiming to increase the number of female supervisors at Volkswagen Family-friendly HR policies are an important consideration for employees who want to raise a family. Helping our employees combine work and family life is another important element of our strategy to become the top employer. We organise meetings for employees on parental leave, implement initiatives to ease the transition back into the workforce after parental leave and offer information on childcare providers on our intranet. Telecommuting and various part-time and shift models also make it easier to balance job and family. And in this context, I'd like to mention one particularly positive development: whereas in 2006, 280 employees in the six Volkswagen AG production plants in Germany took parental leave, in 2008 the number reached 744. And the percentage of fathers increased sharply, from three percent in 2006 to 52 percent last year. Training and Development People are at the heart of the Volkswagen culture, which is one of innovation, progress and a desire to deliver exceptional service.

They recognise that they can only achieve our business goals by attracting and developing the most talented people, affording them the right development and the means and motivation to realise their full potential. They attract, develop, reward and recognise the broad range of individuals who build our success. They deserve a great place to work one which they can feel proud, a place of warmth, support and enthusiasm. The Volkswagen Modern Apprenticeship Program The Volkswagen Modern Apprenticeship Programme has been designed to equip you with the relevant skills and knowledge to become fully qualified in your chosen career. The Apprenticeship is for four years (three years of training with the academy) and consists of a variety of workplace and off-the-job training. Your career will be given full support to help you successfully complete the Program. Few businesses can offer their employees such diversity, challenges, excellent training and career development prospects. Volkswagen offer a wide choice of attractive career opportunities for all levels of experience, aptitude and personality types whether you are technically minded, a numbers person or more people oriented. Every Apprentice is encouraged to demonstrate initiative and contribute his or her own ideas for improving customer service and developing the business. But this approach requires a special type of person. You must have the ambition to contribute and succeed in a fast-paced, results oriented environment and strive to be the best in everything you do. As an apprentice, you will be employed by and based at your local dealer in your state or territory, while regularly travelling to NSW for intensive apprentice training and course assesment conducted at each of the manufacturer's training facilities. At this point, we do not offer in-school training courses.

The Volkswagen Commitment Throughout Volkswagen we have a rigorous commitment to quality and excellence. Our products are highly acclaimed, our processes for distribution and support services are world class and we have some of the most technologically advanced resources in any industry. We have a reputation for providing the best and most genuine customer retail experience to every person visiting our dealerships. We want you to be part of this delivery. Volkswagen is committed to the continuous development of the skills and knowledge of its people, through training, coaching and distance learning. For Volkswagen to maintain its excellent reputation, employees need to be kept up-todate with changes in technology and commercial developments that affect the delivery of customer satisfaction and the business objectives. We therefore invest heavily in training, making our people some of the best trained in the industry. A career with Volkswagen is a very unique and rewarding experience Profiler Profiler significantly reduces the cost and time it takes to recruit candidates. In three simple steps, this powerful online competency based tool allows Recruiters to Profile their jobs, Screen applications according to set Qualifiers and Interview short listed candidates. This ensures that their initial selection process is consistent, fair and legally compliant.

On Profiler Before using Profiler, Volkswagen (VW) had to manually screen and filter CV applications, which they found to be a very time consuming and a cumbersome process. Many of the positions at VW dealerships are Sales Executive positions which attract huge volumes of applicants. Jenni Jordan, VWs Recruitment Manager, and Pauline Bruwer, Recruitment Specialist, recount how they received over 1,000 emailed CVs for one position, which they had to manually read through to find suitable candidates. This was a labour intensive task which was reducing their turnaround time to place candidates at the dealerships. VW were in need of a mechanism to effectively scan

through CVs rather than having to go through each and every CV in great detail. They also wanted to ensure that they were conducting a fair recruitment process which was legally compliant and consistent. VW are constantly on the lookout for particular types of candidates, for example Sales Executives, even if they dont have specific positions to fill. They therefore need to keep the applications coming in all the time to build up their talent pool. It is very important for them to have an accurate job profile set up as well as filtering and screening capabilities to sort out the applicants that meet the criteria and have the potential competencies of the job from those that do not. Profiler was the obvious choice for VW, explains Jordan, Profiler makes it a lot easier when screening the volumes of CVs coming through and in addition it helps us with the setting up of the job specification, says Jordan. Both Jordan and Bruwer find the ability to quickly identify correct candidates as extremely beneficial in that it speeds up the process and selects a better caliber of candidate upfront. Profiler indicates what percentage the candidate has matched the competencies required for the position. This reduces the amount of time utilised when screening and interviewing candidates. In addition, the autoregret functionality results in a huge time saving and efficiency improve ment, says Jordan. Once the profile is set up, it is a good indicator of who has been attracted to the ad in the first place, says Bruwer. The filter results are also extremely beneficial because we can decide whether we will only consider candidates who match the position 100% or if we will consider 80% matches for example, she continues. Bruwer says she uses the first two steps of Profiler to shortlist candidates and uses the last step - the online interview - to give her more information about the candidate prior to meeting in a face-to-face interview. She explains that this also means that the actual interview is a lot quicker because a lot of the questions are already answered in the screen. Although she doesnt regret them from this screen; it is still useful to use it as a basis to interview. Volkswagen have noticed that since using Profiler, there has been a more sophisticated caliber of candidates who apply. An unplanned benefit of the Profiler process is that it shows the candidates who apply to the positions that there has been a lot of thought in setting up the job advert and that it is quite a professional internal process. It shows the candidate up front that they are dealing directly with the company and that they have put some thought behind the ad -that we are professionals and that it is going to be a rigorousprocess,

says Jordan. This ensures that only serious candidates apply to the position and there are less chancers applying to the positions, she concludes.

Chapter-6 Production Policies

Production Policies
Volkswagen: The Transparent Factory (Dresden, Germany)

To lead off the Plant Tours I'll start with the tour that most exceeded my expectations. Volkswagen's Transparent Factory (GLSERNE MANUFAKTUR auf Deutsch), as highlighted in a Plant Tour on the VWvortex forums, is a phenomenal manufacturing facility. In my opinion it is one of the most impressive factories I have seen to date. The Transparent Factory opened in 2002, and both the German and English names are a word play on the double meaning of transparent, referring to both optical transparency and transparency of the production process. The Transparent Factory builds VW's top of the line Phaeton,

and Bentleys can also be built on the same assembly line since the Phaeton's D1 platform is shared with the Bentley Continental GT and Bentley Continental Flying Spur. Ergonomics and a great deal of industrial engineering are obvious in the layout and manufacturing design. The assembly line is quite different from any automotive final assembly plant that I have seen before, and the whole facility has an experimental design feel to it. The cleanliness of the facility lends a sterile, hospital like feel to the whole site, and the white coveralls of the assembelers almost seem inappropriate (as if they should be wearing a white lab coat instead)!

The assembly operation and component factories, in places such as nearby Zwickau, appear quite integrated, and one can definitely tell that little expense was spared to establish the Transparent Factory as the flagship manufacturing operation in VW's worldwide operations. I am still very surprised that VW has not advertised their Phaeton manufacturing process more to the public. Phaetons are very nice cars, and showing the public how their car is built would make many people rethink the general assumption that VWs are a lower tier product versus Audi, BMW, and Mercedes Benz. VOLKSWAGEN Pune plant

VOLKSWAGEN Pune plant The Volkswagen plant in Chakan occupies a total area of over 2.3million square metres (575 Acres), with buildings covering about 115 thousand square metres, which means, the total premises is 2x1kilometres. A workforce of over 3500 people was engaged in building during its peak construction stages. The plant was built with an investment commitment of INR 3800 Crores (580 million Euros) by Volkswagen India Pvt. Ltd. It is the largest investment by a German company to date in the Indian growth market Production The plant has a production capacity of 110,000 vehicles a year. The construction of the plant commenced in 2007 and has been built in a record time of 17 months.

The Honble Governor of Maharashtra His Excellency Shri. S. C. Jamir and Prof. Dr. Jochem Heizmann, officially inaugurated the new plant on March 31st, 2009 in the presence of nearly 500 international guests.

The Pune plant is one of the most modern in the Volkswagen Group. It has a high level of vertical integration and a large share of local suppliers. The facility is the only production plant operated by a German automaker in India that covers the entire production process from press shop through body shop and paint shop to final assembly.

The facility uses futuristically designed state-of-the-art equipment. For example, the Body shop uses the Diode Laser Brazing (DLB) technology, whereas the Roof & Side Framer laser technology is used for welding the roof to the body of the car. The facility is also one of the few environment friendly manufacturing plants around the area. For Example, the Exhaust of the Paint shop is re-burnt and the resultant heat and energy is reused.

Full-fledged production has taken off at the plant with the production of the Skoda Fabia in May 2009, followed by a Polo based model in December 2009.

Workforce Volkswagen India Pvt. Ltd., in its commitment towards the economic development of the state of Maharashtra, plans to hire 2500 skilled employees

Quality concepts used by the company Sustainability in supplier relations In purchasing too, the Volkswagen Group has set minimum environmental and social standards. This is especially important in the case of suppliers from developing and emerging countries where statutory environmental and social standards are inadequate or even non-existent. In this context, we are under a special responsibility to ensure compliance with uni form environmental and social standards throughout the Group in view of the continuing internationalisation of our value streams. For us, it is impor tant that our partners not only supply goods of impeccable quality but also implement minimum environmental and social standards throughout the world, said Francisco Javier Garca Sanz, Member of the Board of Management of the Volkswagen Group responsible for Purchasing.

To this end, back in 2006 the Volkswagen Group drew up a Sustainability in Supplier Relations scheme in conjunction with Oldenburg University and the co- determination bodies within the Volkswagen Group and has since gradually introduced this approach into corporate structures across the Group, as well as into production-related purchasing processes. In 2008, these standards were extended to general purchasing. Sustainability in Supplier Relations has since become a key element in supplier management throughout the Volkswagen Group. All new purchasers receive regular training in this field in order to ensure a heightened awareness of deviations and improvement potential with respect to suppliers.

Extension

to

other

brands

and

regions

We are currently in the process of ensuring that our standards for Sustainability in Supplier Relations become more strongly anchored at our various brands and in the regions where the Volkswagen Group operates. We are conducting a re view to determine the extent to which these standards are already taken into consideration in internal and external processes on site and to identify any optimisation potential. During a seven-month pilot project at the VW Group China in 2008, internal procedures were analysed and process optimisation measures were successfully defined. At training workshops extending over several days, we also conducted an intensive exchange of information with Chinese suppliers in the areas of environmental and social standards, dialogue and communications. At the end of these workshops, all the participants joined forces to draw up plans of action including improvement measures. International networking At the European level, the Volkswagen Group and other companies are committed to anchoring sustainability more fi rmly as an element of supplier relations for the entire automobile industry. As a partner in the European Alliance for CSR, the Volkswagen Group is actively involved in strengthening networks, for example via the Online portal Responsible Supply Chain Management. Furthermore, the Volkswagen Group is a member of the joint CSR in Supply Chains working party with representatives from a large number of automakers. Prospects for cooperation Our joint responsibility as partners in the supply chain continually presents us with new challenges, not least in connection with strategic decisions on future investments, the use of resources or the promotion of productand process-related innovations. As a result, the Sustainability in Supplier Relations scheme is subject to a continuous evaluation process; all the elements of the scheme, including sustainability requirements, early warning system, transparency in the purchasing process or supplier development are regularly reviewed and revised as necessary. This ongoing development of our supplier relations is essential if we are to attain our sustainability objectives.

Chapter-7 Findings & Conclusion

Chapter-7 Findings & Conclusion

Volkwagen entered Indian markets in 2007. Since then it maintaining it market and on the growing stage with its main goal of maintaining the environment. It has many problems since from the level of production, design, development and market trends. Still they are in the process of winning their obstacle race and of course maintaining their market. Volkswagen is a new entrant in the Indian automotive industry and it is facing problems in capturing the market share of its competitors. In view of the problems, because of its modern marketing strategies, it is trying to maintain and achieve its targets. It is note worthy that Volkswagen has a sound financial and capital position. This is very important reason for its maintenance of the market. Volkswagen has family friendly HR policies. Volkswagen has a modern apprentice ship programme for the new comers in the industry to utilize their potential in a proper way for the betterment of the company as also for the employees. Because of its commitment with its employees it is getting better returns from their employees. Volkswagen India Private Limited operates a manufacturing plant in Chakan which is capable of producing 110,000 vehicles per annum. The plant is also shared by koda Auto India Private Limited for assembling the koda Fabia. In all, needless to mention that Volkswagen will definitely come up in Indian automotive industry with its innovative, cost effective cars and classy vehicles.

Bibliography
WWW.GOOGLE.COM WWW.VOLKSWAGEN.CO.IN WWW.WIKIPEDIA.COM WWW.FINANCE.GOOGLE.COM
WWW.CAREERJUNCTION.CO.ZA WWW.ANGELFIRE.COM WWW.LONDREMARKETING.COM WWW.VOLKSWAGENAG.COM