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Volkswagen Case Study

Essay by   •  March 13, 2012  •  Case Study  •  1,931 Words (8 Pages)  •  1,615 Views

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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 second's 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 Ferrari's competitor, Porsche. The group controls also the truck's 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 %

G.M 8 476 192 10.9%

Volkswagen 7 341 065 9.4%

(International Organization of Motor Vehicle Manufacturers, 2011)

Vehicles sales (*1000) Sales revenue

(million €)

2010 2009 2010 2009

Europe 3617 3414 83804 75203

North America 554 451 15193 11396

South America 922 841 13468 9606

Asia Pacific 2185 1604 14409 8982

Volkswagen AG 7278 6310 126875 105187

(Volkswagen annual report, 2011)

Financial performances

€ million 2010 2009

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

1 944 701

Finance costs -2 144 -2 268

Other financial result

2 053 972

Financial result 1 852 -595

Profit before tax 8 994 1 261

Income tax income/expense

-1 767 -349

current -2 963 -1 145

deferred 1 196 796

Profit after tax 7 226 911

Noncontrolling interests

392 -49

Profit attributable to shareholders of Volkswagen AG

6 835 960

Basic earnings per ordinary share in €*

15,17 2,37

Diluted earnings per ordinary share in €*

15,17 2,37

Basic earnings per preferred share in €*

15,23 2,43

Diluted earnings per preferred share in €*

15,23 2,43

(Volkswagen annual report, 2011)

Dividends 2009 2010

Ordinary share 1.60 2.20

Preferred share 1.66 2.26

(Volkswagen annual report, 2011)

Vehicles sales

2009 2010 %

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. Europe's leading vehicle manufacturer has launched the introduction of this technology in its central logistics hall at the Group

headquarters

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