The Success of Volkswagen

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Article Courtesy of Jerome Becaas, MBA, Global Marketing and Presales Executive via Linkedin

Volkswagen recently became the first car manufacturer in the world to sell about 5.2 million vehicles over the first semester 2014.  They also surpassed Toyota, which only sold 5 million units during the same period. 

On the bright side, Volkswagen strategy implemented in the 70s and 80s is paying off. Volkswagen understood a long time ago that expanding its market outside of Germany and Europe was not only a way to grow its customers’ base but also to diversify and minimize risk. China is a perfect example here. Volkswagen was with PSA one of the few which invested early on in the Middle Kingdom. Now VW Group is the first car-maker in China. Beyond China, VW manufactures and sells in all the regions of the world: America, Asia and Africa.

In addition Volkswagen adopted a house of brands strategy by giving a very specific role to each of them: Audi occupying the premium market; Volkswagen being the core brand and focusing on a more general audience interested in the German quality; Seat being the sporty brand for young and dynamic people willing to get a Mediterranean vibe and experience; Skoda targeting price-sensitive customers with the will of German engineering but who are not willing to pay a premium for it. Other brands much more exclusive belongs directly or indirectly to VW such as Porsche, Lamborghini and Bugatti. Basically anyone whatever his/her budget can find the ideal vehicle.

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