Chapter- 3

VOLKSWAGEN INDIA : CASE STUDY

INNOVATIVE CAMPAIGN INSPIRES 2,700 CAR RECOMMENDATIONS IN 4 WEEKS

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.

INTRODUCTION :

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).

Industry Automotive: Founded 28 May 1937 Founder(s): Ferdinand Porsche Headquarters: Wolfsburg, Germany Area served: Worldwide Volkswagen is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and koda marques and the truck manufacturer Scania.

Volkswagen means "people's car" in German, Its current tagline or slogan is Das Auto (in English The Car). 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 behind Toyota and GM 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 became 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. Worldwide presence Volkswagen has factories in many parts of the world, manufacturing or assembling vehicles for local markets. Volkswagen has manufacturing or assembly plants in Germany, Slovakia, China, India, Indonesia, Russia, Brazil, Argentina, Portugal, Spain, Poland, Mexico, Bosnia and Herzegovina, and South Africa. Volkswagen also has a new plant in the United States. In 2011, it was named in the top 25 largest companies in the world by the Forbes Global 2000.

Cars Volkswagen sells a number of cars under its namesake brand, including sedans, MPVs, trucks, SUVs, and coupes. Their product range extends from the supermini Polo, to compact Golf, to midsize Jetta and Passat, and full-size Phaeton. SUVs include the Tiguan and Touareg. Volkswagens current model range:
y y y

Fox Polo Golf

y y

Golf Plus Beetle Passat

y y

Passat CC Scirocco Tiguan

y y y

Eos Jetta Touran

y y y

Sharan Touareg Phaeton

Volkswagen India: Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private Limited that assembles, manufactures and distributes Volkswagen vehicles in India. It was established in 2007. Manufacturing Facilities Volkswagen India Private Limited operates a manufacturing plant in Chakan, Maharashtra 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. Sales Performance 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%. Sales and Service Network

Volkswagen India Private Limited currently has more than 70 dealerships in 56 cities across 18 states and 2 union territories of India.

IN INDIA
Volkswagen (VW) is one of the worlds leading automobile manufacturers and the largest carmaker in Europe. As Volkswagen pursues its goal of becoming the number one automaker in the world by 2018, India has become a key component of its strategy. India is currently the worlds second fastest growing car market, with shipments expected to more than double by 2018. With its headquarters in Pune, Maharashtra (India), the Volkswagen Group is represented by three brands in India: Volkswagen, Audi and Skoda. The Volkswagen Group is completing 10 years of its India journey which began with the entry of the Skoda brand in 2001, Audi brand and Volkswagen brand in 2007. Each brand has its own character and operates as an independent entity in the market. As a relatively recent entry into the Indian automotive market, VW needed to raise brand awareness. To address this challenge, Volkswagens marketing team focused one of its key brand pillars, innovation, to make a strong impact throughout the roll-out in India. Innovation was showcased not only in Volkswagens product introductions, but also in its communications and advertising.

Chapter- 4

Corporate Strategy
y Global challenges such as climate change and scarce resources demand sustainable solutions. y Volkswagen Group has been employing various methods to envisage the future and thereby enhance its competitive position. y Volkswagen Group has charted a clear course with our 18plus strategy.

Mach 18Plus Strategy

y Focus lies on becoming an economic and environmental leader in the global automotive industry. y Strive for success in terms of profitability, customer satisfaction and quality, accessing new markets and increasing production output, and attractiveness as an employer. y The plus element stands for more entrepreneurial thinking, more synergies and more ecology. y Volkswagen will harness the strengths of the Group and its nine brands with an environmentally-oriented model range . y Volkswagen has set its sights on new environmental benchmarks. y The company has earmarked annual expenditure for development and investments in new models and technologies in excess of 8 billion over the next few years. y Boost the sales volume from present 6.5 million to more than 10 million cars. y The incremental volume aimed for will more or less come from Brazil, Russia, China and India.

Indias Contribution in 18plus Strategy

y Indian car market is the 10th largest car market with annual sales of around 1.4 million cars. y The market size is expected to increase to 4 million cars by 2015. y Volkswagen aims to increase its market share from a meager 1% presently to 10 % in next 5 years. y VW picked up 19.9 per cent stake in the Suzuki Motor Corp (SMC) for USD 2.5 billion last year. y Maruti Suzuki India is the crown jewel of the Japanese car maker. y Volkswagen is open to jointly developing products with Maruti Suzuki India, as part of its efforts to achieve synergy with Suzuki Motor Corp at the global level.

Business Strategy
Skoda Auto India Launched its first product, the OCTAVIA, in India in 2001. It Was the only possible step to enter India. Skoda adopted a Focus Strategy approach relying on differentiation as a luxury car maker.

Audi India Audi is one of the worlds leading premium brands. Basis of its success comprises pioneering concepts in the domains of advanced technology and design. Audi has been selling its products in Indian market since 2004. For this Audi AG has earmarked investments of up to 30 million (Rs174 crore) by 2015 in its local operations. Also Audi India plans to come up with a car in corporate entry level i.e.Toyota Camry following the lead of BMW.