The present day Volkswagen AG was established as Volkswagenwerk in 1936 by the German government with the sole purpose of manufacturing to be released ‘People’s Car’. The outbreak of WW2 saw the manufacturing plant being taken over for military purpose. After the war the factory came under the control of the British Army, manufacturing of the Kdf wagen was restarted and in 1949 returned back to the State of Lower Saxony under the supervision of federal German government.

Volkswagen AG is now the third largest manufacturer in the world and largest European   manufacturer. The Volkswagen Group consists of a total of 12 brands: Audi, SEAT, SKODA, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania, MAN and the Volkswagen Passenger Cars.  The group has presence in 153 countries over the world and it sold 9.276 million vehicle in the year 2012, translating into a share of 12.8 percent of the world passenger car market.

Volkswagen Passenger Car division is the largest among all VW brands having total sales share of approximately 62% of the overall sales of the entire group.  Volkswagen Passenger Car division is whole owned the Volkswagen AG having it’s headquarter in Wolfsburg, Germany.


A controversial ‘VW law’ protected Volkswagen AG from takeover bid by any other foreign business and gave the State of Lower Saxony a ability to veto major decision.  The law prevented shareholder from getting more than 20% voting rights on the VW board irrespective of a majority holding. The law was successfully challenged in the EU court in 2007. The Germany government has since abolished the object able clauses.

In the year 2008 the much smaller sports car manufacture Porsche attempted to buy a majority stake of 75% share in Volkswagen but due the prevailing economic condition failed to raise the required capital and rake in a debt of 10 billion euro. Volkswagen turned the table on Porsche and brought a 49.5% in the following year. Volkswagen agreed to buy the remaining 51.5% share for 4.46 billion euro in the year 2012 making Porsche a wholly owned subsidy of Volkswagen AG.

The current shareholding structure is as follows, Porsche Automobil Holding SE Stuttgart   32.2%, Foreign institutional Investors 24.9%, Qatar Holding LLC 16.4%, State of lower Saxony 12.7%, Private Shareholders 9.3%, German Institutional Holders 3.0%, Porsche Gmbh, Salzburg 1.5%.

The Volkswagen Passenger Car division is the most important brand under Volkswagen AG. Many of the product sold by brands like SEAT and Sokda are rebadged VW or happen to share the same platform and share a lot of components in between them. Volkswagen AG has a policy of jointly developing cars across different brands for reason of saving on development and manufacturing cost. Sokda is more value for money brand. The SEAT with its sporty looks appeals to the young customers whereas Volkswagen passenger car is more for the mainstream market.

Rahil Rupawla


  1. Volkswagen (2014) Shareholder Stricture [online] available from http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/share/Shareholder_Structure.html  [16th January 2014]
  1. Volkswagen (2014) The Group. [online] available from http://www.volkswagenag.com/content/vwcorp/content/en/the_group.html [16th January 2014]
  2. Volkswagen (2014) The Volkswagen Timeline [online] available from http://www.volkswagen.co.uk/timeline/index?decade=1930&q=&#list [16th January 2014]
  3. The Guardian  (2012) Volkswagen swallows Porsche by Gwyn Topham [online] available from http://www.theguardian.com/business/2012/jul/05/volkswagen-buys-porsche [16th January 2014]
  4. BBC (2012) Volkswagen agrees to buy Porsche for  5.6 bn [online]  available from http://www.bbc.co.uk/news/business-18718087 [16th January 2014]
  5. Volkswagen (2013) Financial Sustainability on core strengths [online] available from http://www.volkswagenag.com/content/vwcorp/info_center/en/talks_and_presentations/2013/09/Investor_Day_Mr_Poetsch.bin.html/binarystorageitem/file/2013-09-09+Volkswagen+Investor+Day_P%C3%B6tsch_WEBSITE_final.pdf [16th January 2014 ]
  6. Bloomberg News (2013) Germany wins EU court battle over VW law, escapes fines by  Stephaine Bodoni [online] available on http://www.bloomberg.com/news/2013-10-22/germany-wins-eu-court-fight-over-vw-law-legality-escapes-fines.html
  7. Reuters (2013) EU court: Germany has compiled with ‘Volkswagen Law ‘ ruling [online] available from http://www.reuters.com/article/2013/10/22/us-court-germany-volkswagen-idUSBRE99L09Q20131022 (16th January 2014)

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