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Volkswagen History

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Since I don’t know too much about the company, I didn’t really feel comfortable putting out all these news reports without having done too much research. So this post will be dedicated to the history of the company.

Volkswagen was originally a political promise made by Adolf Hitler to manufacture an affordable car. Before the first models could be made, World War II broke out and the factory was instead used to make military vehicles. The first VW Beetle was produced in 1945 and the first VW vehicle sold to America was in 1949 (reportedly only two were purchased that year). The VW group of America was opened in 1955 and the first U.S. production facility was opened in Pennsylvania in 1978. It closed 10 years later and Tennessee opened a production facility in 2011.

The Volkswagen Group worldwide headquarters is located in Wolfsburg, Germany. The Volkswagen America headquarters is located in Herndon, Virginia.

Volkswagen also sells cars under the brands Audi, Bentley, Bugatti, Lamborghini, SEAT and Skoda. They also sell motorcycles under the Ducati brand.

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Volkswagen Beetle GSR unveiled at Chicago Auto Show

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On Thursday, February 7, Volkswagen unveiled its new Beetle model. The company designed the GSR after the original which was unveiled in 1972. There were only 3,500 made and they sold out within two months. Like the original, VW has decided to only sell 3,500. This is a smart strategy because it adds a feeling of rarity to the product. In class, we discussed the clothing company, Zara, who deliberately underproduces in order to make customers feel the pressure to buy their products as quickly as possible. VW is implementing a similar strategy by making a defined limited number of produced cars. The company is going even further by having each car numbered 1-3,500. This makes every owner feel special in knowing that he/she received one of the few models made. 

VW claims the car can go from 0-60 mph in 6.6 seconds, while also boasting all the bells and whistles of an impressive Fender audio system, xenon headlights, Bluetooth connectivity and push-button start. It also pays homage to the original with its black and yellow paint with black leather interior and yellow stitching. 

I personally feel that Volkswagen is being quite clever with the release of this car and it will boost profits for the company. It is very sporty and sleek while still being a type of “throwback” to the original. Vintage styles are trendy right now and consumers will most likely be very excited to get their hands on a Beetle modeled after the famous GSR from 1972. VW is being innovative as well as creating a quality product which will be in very high demand among car collectors and Volkswagen fanatics. 

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Controversial VW Superbowl Ad

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This week, it was my turn to present a relevant news story to the class. Since my company is Volkswagen, it was only fitting that I discuss the controversial ad Volkswagen made for the Superbowl which aired this past Sunday. 

The commercial featured a white man in an office walking from co-worker to co-worker saying things in an exaggerated Jamaican accent. The commercial ends with him taking his boss and another employee for a drive in his VW bug and at the end of their ride, these two men are also speaking in a Jamaican accent. The commercial was up on YouTube on January 27th and there was a lot of speculation of how it would be received on Superbowl Sunday. 

Luckily, for Volkswagen, the commercial received a lot of positive feedback. Twitter users tweeted their approval and the Jamaican government backed the spot as positive publicity. Jamaican citizens scolded people for taking the ad so seriously and claiming that it was racist. This quick reaction goes to show the importance of social media in today’s world. People have immediate access to almost all information while also having the ability to promptly report their opinions for all of their friends, family and acquaintances to see.  

It’s too early to tell whether or not this ad will have any effect on Volkswagen’s revenues or profits, but there should be information in the near future. 

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First week of class

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For my final semester of college, one of the classes I am taking is my business capstone. Part of the syllabus is keeping a blog and posting both about musings from the class as well as closely following a company. My company of choice is the car-maker, Volkswagen. I chose this company because I do not know too much about the business of automobiles and I thought it would be really interesting and informative. 

So far class has been far more interesting than I would have initially expected. The first day was just going over the syllabus and then Professor Tuggle spent the last 15-20 minutes delving into the material. The first lecture focused on the importance of competitive advantage. What made the lecture really interesting was the way real life companies and their circumstances were woven in to make the class really understand. This lecture also focused on strategy and how to best outdo other companies and stay relevant. 

The next lecture focused on the external environment and how this might affect a business. What I most took away from this lecture was the importance of understanding the environment surrounding your business while also being very self-aware of which stage your business is in and which sector you are trying to appeal to. The professor stressed the importance of Porter’s 5 forces when we analyze companies and read various cases. The forces are as follows: 

1. Buyers

2. Suppliers

3. Threat of substitutes (not rivals) 

4. Potential competitors

5. Intensity of rivalry

These were all interesting to go through one by one with examples given throughout. What I  mostly took away from this lecture was the importance of competition: companies don’t want competition because they want to be able to control the market without any price wars. Being aware of the external environment can also make you more aware of competition (or potential competition) a company faces. 

All in all I’m understanding the material fairly well. It’s strange for me to take a business class like this because I am an accounting major and I have been focusing so much on that aspect of all companies. It’s really nice and refreshing to look at marketing and management strategies in addition to all of the financial information I learn through accounting courses.