Volkswagen Case Study
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What the company makes or provides?
Volkswagen AG is a German multinational automotive manufacturing group headquartered in Wolfsburg but representing 61 production plants in 21 countries. Although Volkswagen operates in financial services and insurance, I will focus my work on Cars. Founded the 28th may 1937; this group is nowadays considered as the seconds largest car manufacturer in the world behind Toyota in units sold. In units produced Volkswagen is preceded by G.M and Toyota as well (Volkswagen annual report, 2011)
Volkswagen group is composed of Audi, the ex Spanish Seat, the former Czech Skoda, the famous and historical Italian Lamborghini, inaccessible Bugatti, and Bentley representing the English premium style and forever Ferraris competitor, Porsche. The group controls also the trucks manufacturer MAN after having managed an Initial public offer in July 2011. Then the group holds part of the capital of Scania, and Suzuki at 19.9 %.
The German giant develops vehicles and components for all marques of the whole group, and also manufactures complete vehicles for the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles marques.
Facing economical problems, lack of competitiveness and catastrophic results with a loss of 250 million Euros and a drop of 30% in net income of the company; the group was forced to propose an austerity plan in 2004. The automotive division was totally restructured, dividing responsibility between Volkswagen and Audi. The Audi group will focus on more sporty value with Lamborghini, Seat and Audi as well. Volkswagen will defend classic values with Volkswagen, Skoda, Bentley and Bugatti. More than 20000 employments were cut and part of the production was closed and relocated to foster economies of scale.
As mentioned above, Volkswagen group tends of diverging activities, proposing Financial and insurances services. It recently started to produce boat and industrial engines. Besides to complete its original activity it associated in 2004 with Leaseplan, European leader in long term rent.
Sales and Market share
(global 2010)
Groups
Units produced
Share
Toyota
8 557 351
11.0 %
8 476 192
10.9%
Volkswagen
7 341 065
(International Organization of Motor Vehicle Manufacturers, 2011)
Vehicles sales (*1000)
Sales revenue
(million €)
Europe
83804
75203
North America
15193
11396
South America
13468
Asia Pacific
14409
Volkswagen AG
126875
105187
(Volkswagen annual report, 2011)
Financial performances
€ million
Sales revenue
126 875
105 187
Cost of sales
-105 431
-91 608
Gross profit
21 444
13 579
Distribution expenses
-12 213
-10 537
Administrative expenses
-3 287
-2 739
Other operating income
7 648
7 904
Other operating expenses
-6 450
-6 352
Operating profit
7 141
1 855
Share of profits and losses of
equity-accounted investments
1 944
Finance costs
-2 144
-2 268
Other financial result
2 053
Financial result
1 852
Profit before tax
8 994
1 261
Income tax income/expense
-1 767
current
-2 963
-1 145
deferred
1 196
Profit after tax
7 226
Noncontrolling interests
Profit attributable to shareholders of Volkswagen AG
6 835
Basic earnings per ordinary share in €*
15,17
Diluted earnings per ordinary share in €*
15,17
Basic earnings per preferred share in €*
15,23
Diluted earnings per preferred share in €*
15,23
(Volkswagen annual report, 2011)
Dividends
Ordinary share
Preferred share
(Volkswagen annual report, 2011)
Vehicles sales
6 309 743
7 278 440
+15.4%
(Volkswagen annual report, 2011)
Role within the information system
The concept of Volkswagen bank was already a great technological advance in Logistics, it allows Cars dealers to establish contact with the manufacture and the logistics base to manage their orders and the delivering of vehicles, facilitating payment with direct bank levy over the bank account of the subscriber (car dealer). The Volkswagen Group has recently gone further introducing in 2009 the most up-to-date form of information technology in the area of Material Logistics. It reduces manual effort by up to 80 percent at the goods-receiving stage alone. Europes leading vehicle manufacturer has launched the introduction of this technology in its central logistics hall at the Group
headquarters