In about 500 words, analyse how Social, Economic, Political and Technological factors might affect Volkswagen Group. Define each factor with examples in context.
In about 500 words, analyse how Social, Economic, Political and Technological factors might affect Volkswagen Group. Define each factor with examples in context.
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Volkswagen Group Volkswagen Group is the world’s second largest automotive manufacturer. In addition to their eponymous passenger car brand, Volkswagen Group is responsible for eleven other major cars, motorcycle, and commercial vehicle brands, including Audi, Seat, Skoda, Ducati, and Scania. While the global company has continued to post impressive numbers for both profit and market share, it appears to be facing a mixed outlook for the future. Both the United States and the United Kingdom are major markets for Volkswagen Group’s many vehicles. Unfortunately, there are serious doubts about the future of trade regulations between Germany the company’s home base and those countries. Throughout 2018 and 2019, the United States has repeatedly shown its willingness to place tariffs on goods imported from the European Union. Until now, the automotive industry has not been subject to these tariffs, but there’s a very real risk that might change. On the plus side, consumer spending is growing across all corners of the globe. This means that consumers are more willing than ever to purchase consumer goods such as electronics and, to an extent, automobiles. Increased consumer spending is especially significant for automotive brands in poorer markets, where consumers may have previously purchased no vehicles whatsoever. In wealthier markets, increasing consumer spending is still beneficial as it results in more expensive model choices and the purchase of various extras. At present, the most promising green technologies for the automotive industry include electric motors, batteries, and hydrogen fuel cells. Volkswagen Group has already shown its ability to produce battery-powered electric cars with various Audi and Porsche models. While consumer spending is growing, consumers’ desire to drive isn’t. For reasons both financial and environmental, many individuals are choosing to give up car ownership and travel with bicycles, scooters, buses, trains, and ride-sharing apps such as Uber or Lyft. This could present a major downturn in sales both for Volkswagen Group and the industry.
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