Challenges & Opportunities

risky-business-inline-top-photo-433569-s-originalVW group has gained considerable market share worldwide to become the 3rd largest automobile manufacturer. It aim to become the leader by 2018. It seems thing are going into VW favor and it has been able to achieve its yearly sales target without making losses and turning up a profit. It would be a challenge to continue this momentum in the coming years. VW group plans to invest $114 billion through 2018 worldwide. VW is the market leaders in European market, it recently edged pass GM in China to become the sales leader of 2013. It is in a dominating position in the Latin American market. Competition for different quarters is becoming fierce whereas the overall demand in the European market is shrinking. VW focus on German engineering values & economies have been strong factors in achieving this sales success. The competition and customer are now showing keep interest in vehicle Infotainment systems which is presently a grey area for VW and is trying to catch up rival like Ford and GM in this area.

The recently introduced MQB architecture would theatrical given VW huge advantage over its rival it matter of manufacturing, R&D as well as cost saving over the entire production process. The cause of concern about the MQB platform sharing falling flat would be in a case if there are any quality concerns. The number of vehicles to be recalled would be huge and would make a big dent on the financial earning.

VW along with it other sister brands Sokda, Audi, Seat have been able to differentiate pretty well and align their product without cannibalizing each other’s product.  But with few recently model launches by Audi would certainly infiltrate the high end VW model territory. Many of the Skoda and SEAT models are essential rebadged cheaper version on VW.

Electric cars currently have a niche market and the sales are rather not that large, but they certainly help in building the brand image and in effect do help in the overall sales. Toyota has cleverly leveraged good publicity from its hybrid model. Most of the larger automobile manufacturers have now showed keen interest in electric and hybrid technologies.  VW up until recently had only showcased a few concept but there was no production models. VW now is very much interested in introducing electric automobile and it target a sales of one million electric cars by 2018, that would make them the largest manufacturer of alternate powered vehicle.

In the coming years VW plan to introduce a couple of SUVs into its model lineup which should help them gain sales in the North American as well as the Chinese markets.

VW has long enjoyed a dominating position in the South American markets which now seems threatened by the sudden rush of automobile companies to manufacture car locally. Rivals are now offering more advanced vehicle at about the same or lower cost. VW with is dated model line is getting jitters with all the latest car being introduced. VW might have to look beyond the popular Gol and Fox model range to now compete in the Latin American market.

China has about 90 different mostly local but many global manufactures. It has had good years of sales growth but now local manufactures are gaining with technological advance product. Chinese companies are becoming up-to-date with their model lineup and encroaching into the territory occupied by VW. VW on its part in investing heavily in its Chinese operation and increasing the number of model it offers.

 

Reference

http://www.boston.com/cars/news-and-reviews/2013/09/07/volkswagen-ramps-its-push-for-market-share/M7fv1ZBMQ8DnVdZUornjWL/story-1.html

http://www.economist.com/node/21558269

http://www.forbes.com/sites/joannmuller/2013/04/17/volkswagens-mission-to-dominate-global-auto-industry-gets-noticeably-harder/

http://www.ft.com/cms/s/0/10ede0a8-5a58-11e2-a02e-00144feab49a.html#axzz2rEZ0GT00

http://www.caranddriver.com/reviews/volkswagens-big-game-of-risk-the-ambitious-plan-for-world-domination-feature

http://www.autonews.com/article/20130421/GLOBAL03/130429991/gm-vw-china-rivalry-heats-up-as-both-see-3-million-auto-sales#axzz2rEK3a1bf

http://www.ceibs.edu/images/bmt/research/2012/02/08/4F25743E1D989EC60C4CE797F833670B.pdf

Image

http://www.caranddriver.com/reviews/volkswagens-big-game-of-risk-the-ambitious-plan-for-world-domination-feature

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: