Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

The Volkswagen Group with its headquarters in Wolfsburg is one of the world‘s leading automobile manufacturers and the largest carmaker in Europe. The Volkswagen Group consists of two divisions: the Automotive Division and the Financial Services Division. The activities of the Automotive Division are centred on the development of vehicles and engines, the production and sale of passenger cars, commercial vehicles, trucks and buses, and the genuine parts business. These include the brands of VW, Audi, Skoda, Seat, Bentley, Scania, Lamborghini, Bugatti, and Porsche. The Financial Services Division’s portfolio of services combines dealer and customer financing, leasing, banking and insurance activities, and fleet management.

Since January 2007, Martin Winterkorn represents the company as CEO. After succeeding his predecessor Bernd Pischetsrieder, his first task had been to strengthen the brand’s position both on a national and international level whilst recovering the company’s profitability. Indeed, in 2010 for instance, the Volkswagen Group managed to increase vehicle sales by 13.7% to 7.2 million units and thus achieve a new delivery record. The group recorded revenues of €126,875 million during the financial year 2010, an increase of 20.6% over FY2009. The operating profit of the group was €7,141 million in FY2010, an increase of 384% over FY2009. Its net profit was €7,226 million in FY2010, compared to net profit of €911 million in FY2009.

Supported by its strong financial performance in 2010, Volkswagen’s brand and enterprise value rose over the year to US$14,230 million and $111,052million respectively, a 12.0% and 34.7% increase over 2010.  However, the brand lost its AA+ rating and is now rated with A+.

Positive Aspects

Long-term thinking with Strategy 2018

Volkswagen defined four goals that are designed to support the group becoming the most successful and fascinating automaker by 2018:

1. Leading in customer satisfaction and quality
2. Top employer
3. Volkswagen group profit before tax margin >8%
4. Volumes >10 million units p.a.

 To achieve these targets we have identified the following six areas to focus on:

1. Growth market focus through increased market penetration, a balanced global footprint, as well as through expansion in emerging markets.
2. Following a modular toolkit strategy by reducing development and unit costs, as well as time to market.
3. Capital discipline with an >16% ROI target in the automotive business, as well as 20% ROE in Financial Services.
4. Operating profit measures through strong cost control, process/product optimisation and regional scale effects.
5. Synergy potential through leveraging best practices across the group.
6. Potential upside through product portfolio extension, expansion and market recovery in North America, commercial vehicle strategy and market recovery, as well as through strengthening the automotive chain within the Financial Services.

A technology portfolio for eco-friendly mobility

Integrating a wide range of innovations into fuel-efficient, low emission mobility solutions, Volkswagen’s “green labels” offer technologies and products that are geared to significantly reduced fuel consumption and CO2 emissions in accordance with EU and global emission regulations. Implementing its forward-looking power train strategy has enabled the brand to reduce the fleet’s average CO2 emissions by 22 g/km in the past five years, i.e. by around 15%.

Volkswagen is electrifying drivetrains step by step and is on the way to launch the first series e-vehicle for everyone, the Up! blue-e-motion. Volkswagen‘s aim is not to be the fastest, but the best and safest for our customers. With these models – offered worldwide – Volkswagen will build a solid bridge to the era of electric mobility. In parallel with the introduction of new hybrid models, Volkswagen is working on its electric vehicle offensive.

Negative Aspects

Bribery and sex scandals devastated Volkswagen

In the early 2000s, Volkswagen’s former Chief of Personnel, Peter Hartz paid $2.5 million dollars in illegal bribes for over nine years to the company’s labour boss to have the support of the management plans. The alleged illicit payments were used by Volkswagen’s Works’ Council Chief Klaus Volkert to finance lavish foreign trips, parties, prostitutes, and luxury hotels in Brazil and Lisbon at VW’s expense. The scandal went around the world and heavily impacted the image of the German car manufacturer

 

 

Last changed December 7, 2011

League tables

Volkswagen appears in the following brand league tables:

Rank 35 in the Global 500 2012.
Rank 3 in the Germany 30 2012.
Rank 63 in the Global 500 2011.
Rank 63 in the Global 500 2011.
Rank 5 in the Germany 30 2011.
Rank 62 in the Global 500 2010.
Rank 44 in the Global 500 2009.
Rank 95 in the Global 500 2008.
Rank 96 in the Global 250 2007.