| Volkswagen just seems to go from strength to | | | | steel supply from there. Wolfsburg was built near the |
| strength. In recent times it has quietly risen through the | | | | town of Braunschweig, which enabled VW to recruit a |
| ranks of the motor industry to appear as the third | | | | skilled local workforce. |
| largest car manufacturer in the world today. It has | | | | Once the production aspect was completed, Ferdinand |
| done this by a combination of sheer business acumen, | | | | Porsche facilitated the manufacturing process and |
| some clever acquisitions and a certain amount of good | | | | introduced flow production. He based this on the same |
| fortune. | | | | principles of flow production at Henry Ford's production |
| Volkswagen Group, or VW AG, as it is now known | | | | lines in Detroit/USA. The disadvantage of flow |
| from its previously ill-advised acronym VAG is | | | | production was the limited variety and flexibility within |
| Europe's biggest car manufacturer, with its | | | | the production line, which was overcome through the |
| headquarters located in Wolfsburg in central Germany. | | | | production of just one model - the Beetle. |
| VW AG not only owns the brand VW, but also owns | | | | Through continuous re-investment of profits into |
| Audi, Bentley, Bugatti, Lamborghini, Seat and Skoda | | | | research and development, VW grew in importance |
| which is an enviable portfolio by anyone's reckoning. | | | | through the 70s, 80s and 90s. However, in the early |
| To give a brief history lesson, it was in the year 1933 | | | | 90s, VW was facing a dilemma regarding their position |
| that Adolf Hitler decided that the German public | | | | in the market. It seemed that the luxury car market |
| deserved a "people's car"; in essence it should have | | | | was growing extensively, leaving VW exposed with |
| four seats to accommodate the average German | | | | their medium range vehicles. |
| family, be able to drive up to 60mph but most | | | | VW's CEO was keen to be involved with high-class |
| importantly to be purchased by means of a saving | | | | brands like Bentley, who had serious financial problems |
| scheme whereby people saved five German marks a | | | | at the time and were in need of backing. VW |
| week in order to purchase a car. Many paid into the | | | | embarked on a number of high profile acquisitions and |
| savings scheme but the outbreak of war ultimately | | | | with each one introduced the same business |
| meant that few actually received their car with the | | | | philosophies that had worked for them. By the late 90s |
| notable exception of Hitler who although couldn't drive | | | | all of the brands were competing successfully in their |
| received a Beetle for his 49th Birthday! The later | | | | markets, improving VW's overall position. By 2000 VW |
| success of the Beetle and ultimately the success of | | | | was operating in nearly every sector of the market |
| Volkswagen arose from these humble beginnings. | | | | including Trucks, leaving them less exposed to risk |
| The manufacture of the Beetle was a key factor to | | | | should one particular market encounter difficulties. |
| its success. The main aim was to keep the production | | | | VW's move to production in Eastern Europe was |
| cost per unit as low as possible. Since this was the | | | | criticised as it led to job cuts in Germany. However, this |
| most challenging part of the equation, an entire city, | | | | was deemed necessary to keep VW competitive as |
| Wolfsburg, was built in central Germany to host the | | | | cheaper labour contributed to reducing costs. The |
| production site. Wolfsburg's infrastructure was based | | | | ongoing success of Volkswagen is still largely |
| on the specific needs of Volkswagen. The production | | | | dependent on their well organised infrastructure, not |
| facility benefited from its location in relation to other | | | | only in Germany but also through their supply channels |
| industrial areas of Germany. In addition the railway | | | | around the world, which keeps production costs low |
| connection to the Ruhr-Valley, Germany's largest | | | | whilst still maintaining quality, something which has |
| industrial area, was vital as VW was dependent on the | | | | backfired for other car makers. |