Volkswagen AG
Volkswagen AG, commonly known as Volkswagen or VW, is a prominent German automotive manufacturer headquartered in Wolfsburg, Lower Saxony. Founded on May 28, 1937, by the German Labour Front, the company was initially established to produce an affordable "people's car" as envisioned by Adolf Hitler. The iconic Volkswagen Beetle emerged as its first major model, gaining immense popularity and contributing significantly to the company's success. Over the decades, Volkswagen expanded its portfolio by acquiring various luxury brands, including Audi, Porsche, Bentley, and Lamborghini, which helped solidify its position as one of the largest automakers globally.
Despite facing significant challenges, including a major emissions scandal in 2015 that led to a loss of consumer trust and financial repercussions, Volkswagen has made strides in recovering its reputation. The company has shifted its focus toward electric vehicles, with plans to introduce multiple new electric models by 2026, aiming for 70% of its sales in Europe to be electric. By 2023, Volkswagen operated in 140 markets, employed over 680,000 people, and delivered nearly 5 million vehicles annually. As a result, Volkswagen continues to play a vital role in the automotive industry while navigating its complex historical legacy.
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Volkswagen AG
- Company Information
- Date Founded: May 28, 1937
- Industry: Automotive
- Corporate Headquarters: Wolfsburg, Germany
- Type: Public
Overview
Volkswagen AG, known simply as Volkswagen or VW, is a publicly traded German automotive company headquartered in Wolfsburg, Lower Saxony, Germany. It is noted for its famous Beetle car, as well as for its luxury brands such as Audi, Porsche, and Bentley. In the early twenty-first century, Volkswagen was one of the largest automotive corporations in the world.
Volkswagen was founded in 1937 by the German Labour Front, a trade union controlled by Adolf Hitler, the leader of Germany's Nazi Party. Hitler wanted to produce an efficient and affordable car for average German citizens—a volkswagen, or "people's car," which is how the company got its name. Hitler commissioned Austrian engineer Ferdinand Porsche to design the company's first vehicle, the Kraft durch Freude wagen, or "Strength through Joy" car, the predecessor to the eventual Volkswagen Beetle.
Volkswagen manufactured war supplies during World War II but returned to civilian German control after the conflict. The company thrived for decades almost entirely because of the global sales of its Beetle, but by the 1970s, the public demanded greater diversity.
Over the years, Volkswagen expanded its own models into more modern cars, trucks, and sports-utility vehicles (SUVs) while also acquiring a number of other auto manufacturers. Companies such as Audi, Porsche, Ducati, and Bentley eventually came under Volkswagen's control. Sales from these vehicles made Volkswagen one of the largest automakers in the world.
History
The origins of Volkswagen are linked inextricably to the rise of the Nazi Party in Germany in the early 1930s. Hitler wanted every German family to be able to afford a car. To this end, he turned to Austrian engineer Ferdinand Porsche to design a small and efficient "people's car," or volkswagen. Porsche eventually developed a small aerodynamic car that became the prototype of the Volkswagen Beetle.
The Nazis established the Volkswagenwerk, or "The People's Car Company," in 1937. The company produced the "Strength through Joy" car soon thereafter, but the outbreak of World War II in 1939 forced Volkswagen to cease all vehicle production in favor of manufacturing war supplies for the German army. Over the next six years, Volkswagen used thousands of slaves from German concentration camps to make these supplies.
The British army controlled Volkswagen for several years after the war ended in 1945, but the company passed into German control in 1949. From its headquarters in Wolfsburg, in the democratic state of West Germany, Volkswagen began devoting almost all its efforts to mass-producing its primary vehicle, the future Beetle, which at this point was known only as the Volkswagen.
Volkswagen leased the rights to the car's design from Ferdinand Porsche's design company, which later became the Porsche company. The Volkswagen car sold particularly well throughout Western Europe, with one million units sold by 1955. A 1959 advertising campaign in the United States ultimately earned the car the name Beetle.
Volkswagen automobiles became the most successful imported vehicles in the United States in the early 1960s. The company expanded in 1964 when it acquired Auto Union, the German automotive corporation that owned the Audi brand. Five years later, Volkswagen purchased NSU Motorenwerke, which it merged with Auto Union to create what would become the independent subsidiary Audi AG.
Into the 1970s, Volkswagen came to rely on the more advanced technology of the luxury Audi brand as the global public became tired of the Beetle, the design of which had remained nearly unchanged since the 1930s. Poor Beetle sales in the early 1970s forced Volkswagen to produce several new cars that featured front-wheel drive and more modern designs—the Passat, Golf, Scirocco, and Polo.
In 1975, Volkswagen created Volkswagen Group as a holding company for its growing resources. The 1980s and 1990s saw Volkswagen greatly expand its assets by acquiring numerous smaller automotive companies. In 1982, it began cooperating with the Spanish company Seat; it acquired a majority share of Seat in 1986 and bought the company in 1990. Volkswagen signed a cooperation agreement with the Czech motor company Skoda in 1991 and continued to increase its equity share in the firm into the mid-1990s. In 1998, Volkswagen bought the British luxury car company Bentley, the French company Bugatti, and the Italian Lamborghini.
Volkswagen and the German automotive company Porsche disputed for many years over ownership stakes in each other's assets, with each company attempting to acquire the other fully. Ultimately, Volkswagen bought half of Porsche in 2009 and the other half in 2012. That year, Volkswagen also purchased the Italian motorcycle manufacturer Ducati. By 2014, Volkswagen had become one of the largest automobile companies in the world, selling its vehicles in more than 150 countries. From 2016 to 2019, it was the world's largest automaker.
Controversy
In late 2015, the US Environmental Protection Agency (EPA) reported that hundreds of thousands of Volkswagen vehicles with diesel engines in the United States had been intentionally installed with "defeat devices" designed to circumvent emissions-standards testing. The devices' internal software detected when a vehicle was being tested for environmentally harmful gas emissions and changed the vehicle's performance to meet emissions standards. After passing the tests and being sold to consumers, the vehicles began emitting gases significantly above legal limits.
About eleven million Volkswagen vehicles worldwide were later confirmed to have been installed with defeat devices. These included the diesel models of the Audi E3, Jetta, Beetle, Golf, and Passat.
Volkswagen admitted to cheating the emissions tests after the information was publicized. The company then recalled millions of affected vehicles from around the world. Martin Winterkorn, the company's chief executive officer, acknowledged that Volkswagen had broken its customers' trust and soon resigned from his position. Volkswagen's stock prices decreased significantly following the scandal.
In the years immediately after the scandal, the company reported that it would be shifting its focus in an attempt to win back some of its damaged reputation. Shifting away from the models reliant upon diesel engines that it had been selling for years, Volkswagen would be concentrating most of its efforts on manufacturing electric cars to become a top player in that market. At the same time, it continued to face financial consequences for the diesel scandal, including pleading guilty to criminal charges and agreeing to pay $4.3 billion as a settlement with the US Department of Justice in 2017.
Other than a dip in revenue in 2020, Volkswagen continually recovered from the 2015 saga. In 2023, the Volkswagen brand was sold in 140 markets with 29 vehicle production locations in 12 countries. More than 680,000 employees worked with the company, delivering 4.9 million vehicles in 2021, 4.6 million in 2022, and 4.9 million in 2023. By 2026, the company vowed to produce ten new electric vehicles as part of their goal to reach 70 percent electric sales in Europe.
Impact
Volkswagen began in the 1930s as the state car company of Nazi Germany and, within two decades, had become one of the most popular auto manufacturers in the free Western world. The company's classic Beetle became a symbol of Volkswagen and was still being sold in the twenty-first century. With its numerous high-end vehicle brands such as Audi and Porsche, Volkswagen remains one of the largest and most successful automotive companies in the world.
Bibliography
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