Volkswagen Group seized the top spot as the world's biggest auto manufacturer for the first time in 2016, despite the shadow of the diesel emissions scandal which had emerged a year earlier. The company was found to have installed sophisticated software in its diesel engines that was designed specifically to cheat emissions tests, and make its vehicles appear more environmentally friendly than was the case. The repercussions of that scandal were wide-ranging and very expensive, and are still buffeting the group years later, but don't appear to have dented the popularity of Volkswagen's cars. The group controls a broad portfolio of passenger car brands at all price points: VW itself, Audi, Seat, Skoda, Lamborghini, Bentley, Porsche and Ducati motorcycles, as well as, until recently, Bugatti. Towards the end of 2009 Volkswagen agreed to acquire a strategic shareholding in Japanese company Suzuki, but that partnership failed to deliver significant results and was later dismantled. The group has also built a dominant position in trucks through controlling stakes in MAN and Scania. These are now grouped alongside VW Commercial Vehicles under the corporate banner of Traton. It issued an IPO of a minority stake in Traton in 2019. The group also has extensive interests in financial services and property. Yet despite its range, Volkswagen has periodically struggled to combat flat performance in its home market and especially in the US, as well as fierce competition in what is now its biggest market, China. Many of those problems were addressed with an aggressive expansion strategy initially inspired by luxury sports car manufacturer Porsche, which had attempted to engineer an unsuccessful reverse takeover of Volkswagen in 2008. The tables were turned after Porsche suffered the full force of collapsing credit markets, forcing it to concede the upper hand in a merger to Volkswagen. That whole experience awakened a far more dynamic and combative spirit within Volkswagen Group itself. Perhaps, in the light of its cheating over diesel emissions, a little too dynamic. Yet despite billions of dollars in fines and costs, the group remains more or less unscathed, still the #1 by volumes. It sold almost 11m vehicles in 2019, but deliveries have fallen for two consecutive years since then, first because of the pandemic in 2020 (to 9.3m) and then as a result of component shortages in 2021 (to 8.9m). China now accounts for 37% of volumes (3.3m vehicles in 2021). Revenues peaked in 2019 at €252.6bn, with net income of €14.0bn, before falling in 2020 to €222.9bn in 2020. Net income for the latter year fell to €8.8bn. The group has made a firm commitment to shift away from fossil fuels, and plans to convert all brands to all-electric. Though publicly quoted, majority voting control of the group is retained by the Porsche and Piech families.
Capsule checked 1st March 2022
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Historical profile information for Volkswagen Group
Marketer Moves 25th Jul 2022: New CEO at Volkswagen Group. See Marketer Moves (members only).
Adbrands Update 21st Jul 2022: Volkswagen announced a restructuring of its US business, in which the old Scout car brand will be resurrected for a new standalone business under the group umbrella. The Scout model was developed by independent US company International Harvester in the early 1960s as an off-road light truck to compete with Jeep and others. It ceased production in 1980, but Volkswagen acquired rights to the brand last year through the acquisition of truck manufacturer Navistar. It now plans to relaunch the Scout brand for a new line of electric-only SUVs and light trucks. Scout will be a standalone business under the Volkswagen Group umbrella, operating alongside VW itself, Audi and Porsche. The first vehicles are due to launch in 2026.
Adbrands Update 2nd Mar 2022: A stream of companies in the US and Europe have suspended operations in Russia in response to President Putin's unprovoked invasion of Ukraine. Apple has suspended sales of all products in that country as has Dell. US oil giant Exxon followed in the footsteps of BP and Shell in halting production in its joint venture with Rosneft and other companies and said it will exit that business. In Germany, BMW halted exports of new vehicles to Russia and will cease local assembly of cars at its local joint venture. Volkswagen warned that production in Germany would be impacted by its inability to import certain components from suppliers in Ukraine.
Adbrands Update 23rd Feb 2022: Volkswagen confirmed it is in advanced negotiations to issue an IPO of some of its shares in the Porsche automobile division. It requires the agreement of its biggest shareholder, the Porsche family holding company. A partial float of Porsche cars would generate significant additional cash to fund the wider group's continuing push into electric vehicles.
Marketer Moves 9th Dec 2021: Management reshuffle at Volkswagen Passenger Cars. See Marketer Moves (members only).
Marketer Moves 24th Nov 2021: New group head of marketing, brand & marketing strategy at Volkswagen. See Marketer Moves (members only).
Adbrands Daily Update 23rd Nov 2021: Volkswagen announced plans to review its global group media business in 2022. Incumbent PHD took over the business from Mediacom in 2017, with a contract that is set to expire at the end of 2023. The review spans all the group's various brand businesses.
Adbrands Daily Update 21st Sep 2021: A consortium led by Volkswagen has submitted its formal offer to acquire European car rental group Europcar. The offer values Europcar at €2.9bn including debt. Volkswagen already has the support of a majority of Europcar's shareholders. Under the proposed offer, Volkswagen will control two-thirds of newly created parent entity Green Mobility, whose other shareholders include its Dutch dealership partner Pon Holdings. It's a return to a business Volkswagen already knows: Europcar was a joint venture between VW and French hotel and travel company Accor for several years in the 1990s. VW took control at the beginning of 2000, but put the business up for sale again at the end of 2005.
Marketer Moves 20th May 2021: New head of marketing & communications for Europe at Bentley. See Marketer Moves (members only).
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