Company Analysis : Volkswagen Ag Essay

987 Words Jul 14th, 2016 4 Pages
Volkswagen AG operates in the automobile industry. It’s subsidiaries include Audi AG, Lamborghini S.p.A, Bentley Motors Ltd, Porsche AG, Bugatti S.A.S, and Volkswagen Passenger Cars. Although they are a multinational company, My 5 forces analysis will focus more on the U.S market.
At the time of the scandal, Volkswagen was the market leader amongst car manufacturers that offer diesel automobiles. That was until 2014 when a group of scientist at West Virginia University discovered that VW cars were actually 40% above the legal limit of the permitted pollution level. VW has installed a cheating software that could deceive the emissions test. Facing the pressuring trends from consumers who demand environmentally friendly and fuel efficient cars at competitive prices VW saw that in order to stay competitive the only way they could actually afford to sell these high performing cars without having to alter their mechanical composition was through cheating. As a result, 11 million VW vehicles that should not have passed the emissions tests were legally driving in countries around the world.
In 2015 and currently, the auto industry in the U.S is one of the most important industries. It accounts for about 3.5% of the GDP. The automotive industry employs about 1 million people in the U.S. Despite the many challenges the industry has faced, there constantly exists a big push for innovation which creates a highly competitive environment for VW and other automakers. According to the Auto…

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