GROUP NAME
:
RUPEE
ASSIGNMENT NO :
02
COURSE
CODE
:
BM 5101
VOLKSWGEN
CONTENTS
1
ASSIGNMENT NO:02
Q 01.
Study
the current
fiasco at Volkswagen in the US from multiple perspectives and answer the
following questions:
1. Has Volkswagen acted in fairness to its shareholders, customers and consumers? (30 marks)
2. Whose interests did Volkswagen try to promote? (30 marks)
3. Critically examine the current strategy of Volkswagen to extricate itself from the problems it is
facing now. (40 marks)
2
INTRODUCTION
Volkswagen, shortened to VW, is a German automaker founded on May 28, 1937 by the German
Labour Front and headquartered in Wolfsburg. It is the flagship marquee of the Volkswagen Group,
the largest automaker by worldwide sales in 2016
Germany's Volkswagen is the largest car maker in the world, after Toyota. Its 590,000
employees produce nearly 41,000 vehicles daily.
It currently owns 12 subsidiaries including Volkswagen Passenger Cars, Audi, Seat and
Skoda, luxury brands such as Bentley, Bugatti, Lamborghini, Porsche and Ducati - as well as
Volkswagen Commercial Vehicles, Scania and Man.
It is a long way from its origins as part of Nazi leader Adolf Hitler's vision to enable German
families to own their first car. It also owes its post-war existence largely thanks to the
initiative of a British army major, Ivan Hirst, who saved it from being dismantled and sold off
after World War Two as part of war reparations.
3
Here are some of the key points in Volkswagen's 78-year history.
Hitler inspects a prototype of the new car - but no customers would drive one until after 1945
'People's car' and slave labour
1937: The Company is set up by the Nazi trades union organization, the Deutsche
Arbeitsfront. Very few Germans owned cars at the time, and the aim was to create a
"people's car". Hitler decrees that the car should carry two adults and three children at
100km/h (60mph) and that it should be cheap, costing no more than a motorbike to
buy.
Largely designed by Ferdinand Porsche, the KdF-Wagen (Kraft durch Freude, or
"strength through joy") has an air-cooled rear engine, torsion bar suspension, and an
aerodynamic "beetle" shape that is important given its small engine.
1938: The company, initially called the Gesellschaft zur Vorbereitung des Deutschen
Volkswagens mbH, is renamed Volkswagenwerk GmbH.
1938: A factory is built for the company in the new town of KdF-Stadt, now modern-
day Wolfsburg.
Some 336,000 people subscribe to buy the car via a monthly savings plan but by the
outbreak of war only a handful of cars are complete and none are delivered to
customers.
1939-45: During World War Two civilian car production ceases and the firm switches
to making vehicles for the German army, using more than 15,000 slave laborers from
nearby concentration camps. It is a practice that is widespread among German firms
4
during the war. In 1998, survivors file a lawsuit against VW, which sets up a
restitution fund.
