SWOT Analysis of Volkswagen – Volkswagen SWOT Analysis [Explained]

This article presents a detailed SWOT Analysis of Volkswagen. SWOT Analysis of Volkswagen focuses on Strength, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses are internal factors and Opportunities and Threats are external factors. SWOT Analysis provides a well-tested management methodology that enables Volkswagen to assess its business performance in comparison with its competitors and industry.

Volkswagen is one of the world’s largest car manufacturer. Volkswagen was established in the year 1937. Audi, Bugatti, Skoda, Bentley, Lamborghini, and Porsche are subsidiaries of Volkswagen Group. Volkswagen is trying to attract a large number of customers with its cars. The product line of Volkswagen includes Hatchbacks, Crossovers/SUVs, and Hybrid Vehicles.

Volkswagen is one of the leading manufacturers of cars and in this article, we have analyzed the business performance of Volkswagen. Volkswagen is known for strategic acquisitions, and the company has acquired brands like Audi, Bentley, Porsche, and others.

swot analysis of volkswagen

Strengths in the SWOT Analysis of Volkswagen

  • Volkswagen is a very well-structured organization. Volkswagen produces highly engineered luxury cars as well as passenger cars and buses. The product line of Volkswagen includes Hatchbacks, Crossovers/SUVs, and Hybrid Vehicles. And manufacturing units of all the products are well structured.
  • Volkswagen has highly trained employees. Company is giving special emphasis on the training and development of employees. Trained employees not only work efficiently but also help in the growth of the organization.
  • Volkswagen has a very efficient track record for mergers & acquisitions. Over the last few years, it has effectively incorporated a range of technology providers to streamline its activities and create a stable supply chain.
  • Volkswagen has invested in developing a strong portfolio of brands over the years. SWOT analysis of Volkswagen just underlines this fact. When the organization wishes to broaden into new product categories, these brands will be incredibly helpful.
  • The company, with its committed customer relationship management staff, has the opportunity to achieve a high degree of customer loyalty among current customers and strong brand value among prospective customers.
  • Volkswagen after-sales services and support are very good. The company not only identify problems faced by the customers but try to resolve them quickly. Charges for Paid services are also good. Spare Part Prices of Volkswagen Cars is also good.
  • Volkswagen has manufacturing units in most of the countries in the world Some of the manufacturing units are located in Germany, Mexico, Slovakia, the United States, India, China, Malaysia, Russia, Brazil, Portugal, Argentina, Poland, Spain, Bosnia, the Czech Republic, Herzegovina, South Africa, and Kenya.
  • Volkswagen is a company that has a capacity of manufacturing around 26,600 vehicles in one day. Volkswagen is growing its business at a rapid pace.
  • Volkswagen vehicles are known to have incorporated high technology and are trusted for their efficiency. Volkswagen has recently ventured into the portfolio to add hybrid cars and motorcycles. In addition, the R&D of all sub-brands provides goods beyond expectations.
  • Volkswagen is generating most of its income from the US. But it has very good sales from other countries also.

Weaknesses in the SWOT Analysis of Volkswagen

  • Volkswagen has to face some allegations like US Diesel emission frauds, Canadian emissions charges, Collaboration with dictatorship, Racist Commercial and CEO Use of Nazi slogans. All these allegations ruin the image of Volkswagen.
  • There is very tough competition between car manufacturing companies. Companies are trying to launch new vehicles at competitive prices. Due to this price competition margins of the companies are decreasing.
  • Volkswagen is not able to create a mark by its car in India. People have many options in India when they are planning to purchase a car. Recently KIA has entered into the Indian market and is able to create a good brand image.
  • Volkswagen is spending a lot of dollars on advertising its car brands. But in India Volkswagen was not able to earn more even by spending a lot on advertising.

Opportunities in the SWOT Analysis of Volkswagen

  • Due to the rise in income levels, people are purchasing new cars. This can be a great opportunity for the company to attract new buyers. Volkswagen can offer schemes like loyalty programs, finance schemes, loan schemes, free service schemes, etc to its customers.
  • Demand will only increase with rising GDP and the product’s increasing need. There are a number of developing nations. Volkswagen attempts to tap these emerging countries and can expand worldwide. Volkswagen also needs to analyze the need and demands of people and manufacture cars depending on these needs.
  • Car Exteriors and Interiors always attract customers. Volkswagen must launch new cars or improve the interiors and exteriors of cars. Volkswagen must improve the performance of its cars and try to make maintenance free cars.
  • Volkswagen must try to launch new Hybrid cars, Fuel-efficient cars. Due to increasing fuel prices, there is an opportunity for Volkswagen to capture the hybrid car market or the electric car market.

Threats in the SWOT Analysis of Volkswagen

  • Competition is constantly growing. Competition is not going to back down soon and it is constantly growing. On this front, there’ll be no relaxation.
  • Governments Rules and regulations can directly or indirectly affect the manufacturing and sales of Volkswagen Cars.
  • Brand reputation was ruined due to the emission scandals More than 5 million cars, including Audi, Volkswagen, and several others, had to be recalled. They were not confident that they would get another Volkswagen car again once people had to return their cars. In order to regain its brand strength, Volkswagen will have to invest a lot of money in brand building.
  • There is a threat due to intense competition with National and International Players. Volkswagen is facing competition from car manufacturers like Tesla, Maruti Suzuki, Changing Emission Norms can also directly or indirectly affect the manufacturing of Volkswagen Cars.

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