In June and December 2016 as well as January 2017 the VW automobile the AUDI AG

In june and december 2016 as well as january 2017 the

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In June and December 2016, as well as January 2017, the VW automobile, the AUDI AG and the VW group of America acknowledged on reached settlement agreements with the DOI on behalf of the EPA and the Californian Attorney. The settlement agreement will resolve part of the civil claims for approximately 475,000 VW cars and many other car brands, which are using VW engines. As result of the emission discovery, the company needed to get approvals in certain markets (Australia, Turkey, Switzerland, and South Korea) to put back into the circulation the infected cars and their new products into the market after finding a solution for their pollution level. In addition to the settlement agreement, VW agreed to support an environmental programs with a cost of $2.7 billion dollars. Overall in 2016 VW group has reduced its profits in $16.2 billion dollars due to legal risks and higher provisions. As mentioned above, the Diesel scandal did not stop Volkswagen, the scandal might hurt the brand name but did not prevent for VW automobile to become the largest car manufacturing company worldwide. (VW, 2017b).
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3 Demand Demand is the intensity of desire. Effective Demand is when a person not only possesses the desire to purchase and consume, but also most importantly, the will and ability to buy. In this instance, ability refers to monetary resources to purchase, such as income and wealth. Determinants of Demand 3.1 Price Theory The price of the good itself is the most important factor in determining demand. The Law of Demand states very simply that people will tend to buy large quantities of a given good at a lower price, other things being equal. In other words, when the price is lowered, people will tend to buy more goods and services, other things being equal. When price is increased, people will tend to buy less goods and services, other things being equal. Of course there are always exceptions to this rule, such as “luxury brands.” VW automobiles within the EU have a price range between 10,290 € and 51,490 €. Volkswagen cars are considered to be in middle price range within the automobile market. Volkswagen cars are not considered cheap nor particularly expensive. VW automobiles are affordable for a wide range of customers. Within the VW cars, the cheapest option is the “up!” model for as low as 10,290 €. Volkswagen’s most expensive option is the “Tourareg” model for 51,490 €. Volkswagen cars are considered to have a good price/ performance ratio; a good quality car for a reasonable price. Within the VW automobile market, a relatively small change in price does not highly influence the demand, the automobile market is rather inelastic. (VW, 2017) 3.2 Substitutes The price of related goods, such as substitutes, also play a vital role within the determinants of demand. A substitute is a different product or service, having the ability to do the same thing. Price of substitute goods plays an important role. When there is a product that is
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considered easily substituted, it is vital to convince your customer that your product is different by focusing on the brand. Also, a danger within substitutes is the potential emergence of
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  • Winter '18
  • Renault, Volkswagen, Porsche, Volkswagen Group, Scania

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