Volkswagen AG (German: ['f?lks?va:gn?]), known internationally as Volkswagen Group, is a German multinational automotive manufacturing company headquartered in Wolfsburg, Lower Saxony, Germany. It designs, manufactures and distributes passenger and commercial vehicles, motorcycles, engines, and turbomachinery and offers related services including financing, leasing and fleet management. In 2016, it was the world's largest automaker by sales, overtaking Toyota and keeping this title in 2017, selling 10.7 millions vehicles. It has maintained the largest market share in Europe for over two decades. It ranked sixth in the 2017 Fortune Global 500 list of the world's largest companies. Volkswagen Group sells passenger cars under the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, ?koda and Volkswagen marques; motorcycles under the Ducati brand; and commercial vehicles under the marques MAN, Scania, and Volkswagen Commercial Vehicles. It is divided into two primary divisions, the Automotive Division and the Financial Services Division, and as of 2008 had approximately 342 subsidiary companies. VW also has two major joint-ventures in China (FAW-Volkswagen and SAIC Volkswagen). The company has operations in approximately 150 countries and operates 100 production facilities across 27 countries.
Volkswagen was founded in 1937, to manufacture the car which would become known as the Beetle. The company's production grew rapidly in the 1950s and 1960s, and in 1965 it acquired Auto Union, which subsequently produced the first post-war Audi models. Volkswagen launched a new generation of front-wheel drive vehicles in the 1970s, including the Passat, Polo and Golf; the latter became its bestseller. Volkswagen acquired a controlling stake in SEAT in 1986, making it the first non-German marque of the company, and acquired control of ?koda in 1994, of Bentley, Lamborghini and Bugatti in 1998, Scania in 2008 and of Ducati, MAN and Porsche in 2012. The company's operations in China have grown rapidly in the past decade with the country becoming its largest market.
Volkswagen Aktiengesellschaft is a public company and has a primary listing on the Frankfurt Stock Exchange, where it is a constituent of the Euro Stoxx 50 stock market index, and secondary listings on the Luxembourg Stock Exchange, SIX Swiss Exchange. It has been traded in the United States via American depositary receipts since 1988, currently on the OTC Marketplace. Volkswagen delisted from the London Stock Exchange in 2013. The state of Lower Saxony holds 12.7% of the company's shares, granting it 20% of the voting rights.
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History
1937 to 1945
Volkswagen was founded on 28 May 1937 in Berlin as the Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH ("Limited Liability Company for the preparation of the German People's Car", abbreviated to Gezuvor) by the National Socialist Deutsche Arbeitsfront (German Labour Front). The purpose of the company was to manufacture the Volkswagen car, originally referred to as the Porsche Type 60, then the Volkswagen Type 1, and commonly called the Volkswagen Beetle. This vehicle was designed by Ferdinand Porsche's consulting firm, and the company was backed by the support of Adolf Hitler. On 16 September 1938, Gezuvor was renamed Volkswagenwerk GmbH ("Volkswagen Factory limited liability company").
Shortly after the factory near Fallersleben was completed, World War II started and the plant primarily manufactured the military Kübelwagen (Porsche Type 82) and the related amphibious Schwimmwagen (Type 166), both of which were derived from the Volkswagen. Only a small number of Type 60 Volkswagens were made during this time. The Fallersleben plant also manufactured the V-1 flying bomb, making the plant a major bombing target for the Allied forces.
1945 to 1970
After the war in Europe, in June 1945, Major Ivan Hirst of the British Army Royal Electrical and Mechanical Engineers (REME) took control of the bomb-shattered factory, and restarted production, pending the expected disposal of the plant as war reparations. However, no British car manufacturer was interested; "the vehicle does not meet the fundamental technical requirement of a motor-car ... it is quite unattractive to the average buyer ... To build the car commercially would be a completely uneconomic enterprise". In 1948, the Ford Motor Company of USA was offered Volkswagen, but Ernest Breech, a Ford executive vice president said he didn't think either the plant or the car was "worth a damn." Breech later said that he would have considered merging Ford of Germany and Volkswagen, but after the war, ownership of the company was in such dispute that nobody could possibly hope to be able to take it over. As part of the Industrial plans for Germany, large parts of German industry, including Volkswagen, were to be dismantled. Total German car production was set at a maximum of 10% of the 1936 car production numbers. The company survived by producing cars for the British Army, and in 1948 the British Government handed the company back over to the German state, and it was managed by former Opel chief Heinrich Nordhoff.
Production of the Type 60 Volkswagen (re-designated Type 1) started slowly after the war due to the need to rebuild the plant and because of the lack of raw materials, but production grew rapidly in the 1950s and 1960s. The company began introducing new models based on the Type 1, all with the same basic air-cooled, rear-engine, rear-drive platform. These included the Volkswagen Type 2 in 1950, the Volkswagen Karmann Ghia in 1955, the Volkswagen Type 3 in 1961, the Volkswagen Type 4 in 1968, and the Volkswagen Type 181 in 1969.
In 1960, upon the flotation of part of the German federal government's stake in the company on the German stock market, its name became Volkswagenwerk Aktiengesellschaft (usually abbreviated to Volkswagenwerk AG).
On 1 January 1965, Volkswagenwerk acquired Auto Union GmbH from its parent company Daimler-Benz. The new subsidiary went on to produce the first post-war Audi models, the Audi F103 series, shortly afterwards.
Another German manufacturer, NSU Motorenwerke AG, was merged into Auto Union on 26 August 1969, creating a new company, Audi NSU Auto Union AG (later renamed AUDI AG in 1985).
1970 to 2000
From the late 1970s to 1992, the acronym V.A.G was used by Volkswagen AG as a brand for group-wide activities, such as distribution and leasing. Contrary to popular belief, "V.A.G" had no official meaning, and was never the name of the Volkswagen Group.
On 30 September 1982, Volkswagenwerk made its first step expanding outside Germany by signing a co-operation agreement with the Spanish car manufacturer SEAT, S.A.
In order to reflect the company's increasing global diversification from its headquarters and main plant (the Volkswagenwerk in Wolfsburg), on 4 July 1985, the company name was changed again - to Volkswagen Aktiengesellschaft (Volkswagen AG).
On 18 June 1986, Volkswagen AG acquired a 51% controlling stake in SEAT, making it the first non-German subsidiary of the Volkswagen Group. On 23 December the same year, it became the Spanish company's major shareholder by increasing its share up to 75%.
In 1990 - after purchasing its entire equity - Volkswagen AG took over the full ownership of SEAT, making the company a wholly owned subsidiary, and on 28 March 1991 another step to the expansion of the group's activities was made through the signing of a joint venture partnership agreement with ?koda automobilová a.s. of Czechoslovakia, accompanied with the acquisition of a 30% stake in the Czech car manufacturer, raised later on 19 December 1994 to 60.3% and the year after, on 11 December 1995, to 70% of its shares.
Three prestige automotive marques were added to the Volkswagen portfolio in 1998: Bentley, Lamborghini and Bugatti.
2000 to present
On 30 May 2000, Volkswagen AG, after having gradually raised its equity share, turned ?koda Auto into a wholly owned subsidiary.
From 2002 up to 2007, the Volkswagen Group's automotive division was restructured so that two major Brand Groups with differentiated profile would be formed, the Audi Brand Group focused on more sporty values - consisted of Audi, SEAT and Lamborghini - and the Volkswagen Brand Group on the field of classic values - consisted of Volkswagen, Skoda, Bentley and Bugatti - with each Brand Group's product vehicles and performance being respectively under the higher responsibility of Audi and Volkswagen brands.
Volkswagen Group revealed on 24 October 2009 that it had made an offer to acquire long-time partner and German niche automotive manufacturer Wilhelm Karmann GmbH out of bankruptcy protection. In November 2009, the Supervisory Board of Volkswagen AG approved the acquisition of assets of Karmann, and planned to restart vehicle production at their Osnabrück plant in 2012.
In December 2009, Volkswagen AG bought a 49.9% stake in Dr. Ing. h.c. F. Porsche AG (more commonly known as Porsche AG) in a first step towards an 'integrated automotive group' with Porsche. The merger of Volkswagen AG and Porsche SE was scheduled to take place during the course of 2011. On 8 September 2011, it was announced that the planned merger "cannot be implemented within the time frame provided for in the Comprehensive Agreement." As reasons, unquantifiable legal risks, including a criminal probe into the holding's former management team were given. Both parties "remain committed to the goal of creating an integrated automotive group with Porsche and are convinced that this will take place." On 4 July 2012 Volkswagen group announced they would wrap up the remaining half of Porsche shares for 4.46 billion euros ($5.58 billion) on 1 August 2012 to avoid taxes of as much as 1.5 billion euros, which would have to be paid if the wrap up happened after 31 July 2014. Volkswagen AG purchased the remaining stake in Porsche AG equaling 100% of the shares in Porsche Zwischenholding GmbH, effectively becoming its parent company as of 1 August 2012.
Volkswagen AG completed the purchase of 19.9% of Suzuki Motor Corporation's issued shares on 15 January 2010. Suzuki invested part of the amount received from Volkswagen into 1.49% percent of Volkswagen. In 2011, Suzuki filed a lawsuit at an arbitration court in London requesting that Volkswagen return the 19.9% stake.
On 25 May 2010, it was announced that Volkswagen Group, through it subsidiary Lamborghini Holding S.p.A., had acquired a 90.1% stake in the Italian automotive design house Italdesign Giugiaro. In only less than three months, the transaction had been completed making the Italian firm a member of the Volkswagen Group.
In 2015 research showed a security flaw in the keyless ignition of Volkswagen and other carmakers' vehicles. Vokswagen spent two years trying to keep the research from the public domain.
On 3 August 2015, Nokia announced that it had reached a deal to sell its Here digital maps division to a consortium of three German automakers--BMW, Daimler AG, and Volkswagen Group, for EUR2.8 billion. This was seen as an indication that the automakers were interested in automated cars.
Volkswagen held a 19.9% non-controlling shareholding in Suzuki between 2009 and 2015. An international arbitration court ordered Volkswagen to sell the stake back to Suzuki. Suzuki paid $3.8bn to complete the stock buy-back just hours prior to a major scandal about emissions violations engulfing Volkswagen. Suzuki had wished to buy Fiat diesel engines. On 17 September 2015, Suzuki paid $3.8bn to complete a stock buy-back just hours prior to news broke out regarding the Volkswagen common-rail TDI engine emissions scandal which engulfed Volkswagen.
Emissions scandal
On 18 September 2015, The US EPA announced that Volkswagen had installed a "defeat device" software code in the diesel models sold in the US from 2009-15. The code was intended to detect when an emissions test was being conducted, and altered emissions controls for better compliance. Off the test stand, the controls were relaxed, and emissions jumped 35 to 40 times regulatory levels according to investigators at West Virginia University and the California Air Resources Board. 482,000 vehicles are under the recall order, a potential $18 billion ($37,500 per violation) in fines are pending, and news accounts speculate a criminal indictment for the deception is certain. The VW Group CEO, Martin Winterkorn, said he was "deeply sorry" and ordered an external investigation. The software code was only revealed when the EPA refused to certify VW's 2016 models for sale in the US unless the corporation provided full disclosure. On Sunday, 20 September 2015, VW Group announced it was halting the sale of its four-cylinder diesel models in the US. The US EPA press release on its Notice of Violation, and the California Air Resources Board letter dated 18 September 2015 contain significant chronological detail of the agencies interaction with VW on the issue.
On 22 September 2015, VW AG admitted that 11 million cars worldwide had been fitted with software intended to deceive emissions testing. The company issued a profit warning, saying it had set aside 7.3 billion dollars to fix the fraud. On 23 September 2015, Martin Winterkorn announced his resignation from the CEO position after a crisis meeting of the company board;. On 25 September 2015 Matthias Müller was named CEO. Mr. Müller was the head of the Porsche marque within the VW corporate umbrella.
On April 21, 2017, a US federal judge ordered Volkswagen "to pay a $2.8 billion criminal fine for rigging diesel-powered vehicles to cheat on government emissions tests." The "unprecedented" plea deal formalized a punishment that Volkswagen AG agreed to earlier in 2017.
Electrification strategy 2025
In 2016, Volkswagen Group announced a corporate "Strategy 2025" that aims to offer 20 new electric cars or plug-in hybrid models by 2020 and 30 all-electric models by 2025. The electric cars will utilize the Volkswagen Group MEB platform chassis for all forms and types of cars and light utility vehicles across several VW Group marques due to its flexibility and floor-mounted battery.
In June 2016, it was apparent that Deutsche Post/DHL Express - which operates a fleet of approximately 70,000 vehicles worldwide -- would be replacing many of the Volkswagen Caddy vehicles with electric StreetScooter vans made by their own subsidiary over the subsequent years. The company had also begun to market the StreetScooter to other potential customers. VW Chief Executive Matthias Mueller admitted annoyance. "I, of course, ask myself why Post did not talk to our VW Commercial vehicles division about doing something similar. Let's see if we can still get a foot in the door there."
Volkswagen Brands Owned Video
Operations
Rooted in Europe, the Volkswagen Group operates in 153 countries. Volkswagen Passenger Cars is the Group's original marque, and the other major subsidiaries include passenger car marques such as Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, and ?koda. Volkswagen AG also has operations in commercial vehicles, owning Volkswagen Commercial Vehicles, along with controlling stakes in truck, bus and diesel engine manufacturers Scania AB and MAN SE.
Subsidiaries and marques
The Volkswagen Group comprises 12 principal vehicle manufacturers and their corresponding marques:
- AUDI AG, the Audi Group, and the Audi marque: ~99.55% ownership; formed through the acquisitions of Auto Union from Daimler-Benz on 30 December 1964, and NSU Motorenwerke on 9 March 1969 - Audi being the sole surviving marque from the Auto Union combine. Audi Sport GmbH is Audi's performance engineering and manufacturing subsidiary.
- Automobili Lamborghini S.p.A., and the Lamborghini marque: 100% ownership. AUDI AG acquired Lamborghini S.p.A. in September 1998.
- Bentley Motors Ltd including the Bentley marque: 100% ownership by Volkswagen AG. Volkswagen purchased Rolls-Royce & Bentley from Vickers on 28 July 1998, however the purchase did not include the license to use the Rolls-Royce trademark on automobiles, which is controlled by Rolls-Royce Plc. BMW outmaneuvered Volkswagen, succeeding in obtaining the rights to use the Rolls-Royce trademark on automobiles. From July 1998 until December 2002, BMW continued to supply engines for the Rolls-Royce Silver Seraph and the Bentley division sold cars under both the Bentley and Rolls-Royce marques, under an agreement with BMW.
- Bugatti Automobiles S.A.S., and the Bugatti marque: 100% ownership. Bugatti Automobiles S.A.S. is a wholly owned subsidiary of Groupe VOLKSWAGEN France s.a. Volkswagen acquired Bugatti International S.A. Holding in July 1998.
- Dr. Ing. h.c. F. Porsche AG, and the Porsche marque: Volkswagen AG purchased 49.9% of the shares in Porsche Zwischenholding GmbH (the holding company of Porsche AG) in December 2009. Volkswagen AG purchased the remaining stake in Porsche AG equaling 100% of the shares in Porsche Zwischenholding GmbH, effectively becoming its parent company as of 1 August 2012.
- Ducati Motor Holding S.p.A. 100% ownership by Automobili Lamborghini S.p.A.; company was bought on 19 July 2012.
- MAN SE, and the MAN marque (controlling shareholder) Acquired a controlling stake in July 2011, making MAN the 10th marque of the Volkswagen Group. 75.03% ownership since as of 6 June 2012.
- Scania AB and the Scania marque: Acquired controlling stake in July 2008, making Scania the 9th marque of the Volkswagen Group. 100% ownership since 15 January 2015.
- SEAT, S.A. and the SEAT marque: 100% ownership; initially in 1982 a co-operation agreement with AUDI AG; 51% and 75% ownership in 1986, and full ownership in 1990. SEAT was the first non-German subsidiary of the Volkswagen Group.
- ?koda auto a.s., ?koda Auto, and the ?koda marque: 100% ownership. initially in 1991 a co-operation agreement and 30% ownership; 60.3% and 70% ownership on 1994 and 1995 respectively, 100% ownership since 2000
- Volkswagen Commercial Vehicles (VWCV), or German: Volkswagen Nutzfahrzeuge (VWN): 100% ownership; started operations as an independent entity in 1995.
- Volkswagen Passenger Cars, and the Volkswagen marque: the founding and flagship marque of the company, 100% ownership.
The Group also owns five defunct marques which are managed through the companies Auto Union GmbH and NSU GmbH, both of which are 100% owned by AUDI AG:
- Auto Union (the Auto Union company, together with NSU Motorenwerke AG (NSU), were merged into "Audi NSU Auto-Union AG" in 1969. The name was shortened to "AUDI AG" in 1985, and the interlocked four-ring badge from Auto Union is still used by AUDI AG).
- Dampf-Kraft-Wagen (DKW)
- Horch
- NSU Motorenwerke AG (NSU) - bought in 1969 by Volkswagen AG, and merged into "Audi NSU Auto-Union AG"; the NSU brand has not been used since 1977, while the former NSU manufacturing plant at Neckarsulm is still used for Audi assembly. However, the current AUDI AG shares trade under the ticker symbol "NSU".
- Wanderer
Other subsidiaries:
- IAV, 50% ownership
- MOIA, new mobility services company, 100% ownership
- Navistar International, 16.6% ownership since February 2017
Corporate affairs
Ownership
Under the Volkswagen Law, no shareholder in Volkswagen AG could exercise more than 20 percent of the firm's voting rights, regardless of their level of stock holding. This law was supposed to protect Volkswagen Group from takeovers. In October 2005, Porsche acquired an 18.53 percent stake in the business, and in July 2006, Porsche increased that ownership to more than 25 percent. Analysts disagreed as to whether the investment was a good fit for Porsche's strategy.
On 26 March 2007, after the European Union moved against the Volkswagen law, Porsche took its holding to 30.9 percent, triggering a takeover bid under German law. Porsche formally announced in a press statement that it did not intend to take over Volkswagen Group, setting its offer price at the lowest possible legal value, but intended the move to avoid a competitor taking a large stake, or to stop hedge funds dismantling Volkswagen Group, which is Porsche's most important partner. On 16 September 2008, Porsche announced that the company had increased its stake in Volkswagen AG to 35 percent. By October 2008, Porsche held 42.6 percent of Volkswagen AG's ordinary shares, and held stock options on another 31.5 percent. thus, effectively holding over 74 percent; 42.6 percent actual shares, and the rest as convertible options. Volkswagen AG briefly became the world's most valuable company, as the stock price rose to over EUR1,000 per share as short sellers tried to cover their positions The substantial investment in Volkswagen left Porsche with huge financial burden with its debts accumulating up to 13 billion euros by 2009. Porsche would get emergency infusion of about a billion dollars from Volkswagen. In July 2012, Volkswagen completed takeover of Porsche ending the 4 year saga and formed an integrated automotive group with Porsche. Porsche AG would become the 10th brand of Volkswagen. The holding company Porsche SE owns 31 percent shares of Volkswagen AG while maintaining its 50.7 percent of voting rights in the company.
As of 31 December 2016, share ownership of Volkswagen AG is distributed as follows:
Stock market listings
Volkswagen AG shares are primarily traded on the Frankfurt Stock Exchange, and are listed under the 'VOW' and 'VOW3' stock ticker symbols. First listed in August 1961, the shares were issued at a price of DM 350 per DM 100 share, Volkswagen AG shares are now separated into two different types or classes: 'ordinary shares' and 'preference shares'. The ordinary shares are now traded under the WKN 766400 and ISIN DE0007664005 listings, and the preference shares under the WKN 766403 and ISIN DE0007664039 listings.
Volkswagen AG shares are also listed and traded on other major domestic and worldwide stock exchanges. In Germany's domestic exchanges, since 1961 these include those in Berlin, Düsseldorf, Hamburg, Hanover, Munich and Stuttgart. International exchanges include those in Basel (listed in 1967), Geneva (1967), Zürich (1967), Luxembourg (1979), London (1988), and New York (1988).
Since the start of trading in 1961, Volkswagen AG shares have been subjected to two stock splits - the first was on 17 March 1969 when they were split at a ratio of 2:1, from a DM 100 share to a DM 50 share. The second split occurred on 6 July 1998, the DM 50 share being converted into a share of no overall nominal value, at a ratio of 1:10.
From 23 December 2009, Volkswagen AG preferred shares replaced its ordinary shares in the DAX index.
The worldwide ranking of automakers is compiled once per year by the International Organization of Motor Vehicle Manufacturers OICA.
In 2013, Volkswagen Group's largest single country market was China with 3.27 million units delivered, followed by Germany with 1.16 million units. Divided by regions, Western Europe was the largest market of the Volkswagen Group with 3.65 million units in 2013, followed by Asia-Pacific with 3.64 million, and South America with 908,000 units delivered in 2013.
The European ranking of automakers is compiled monthly by the European Auto Manufacturers' Association ACEA. Volkswagen has held the top spot in Europe uninterrupted for more than two decades.
The company narrowly missed being the top global automaker in the first half of 2014, selling 5.07 million vehicles in the six months ending June 30, 2014, just behind Toyota which notched up 5.1 million vehicle sales.
Sponsorships
Volkswagen is heavily involved in sports sponsorship, with investments having included the 2008 Summer Olympics, the 2014 Winter Olympics, as well as the David Beckham Academy. Volkswagen AG wholly owns the Bundesliga football side VfL Wolfsburg; the company is also the shirt sponsor of Major League Soccer club D.C. United, League of Ireland Premier Division Sligo Rovers and top level of the Mexican football league system Liga MX team Puebla F.C.
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