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Group No:

I S P E

SEMINAR REPORT

ON

VOLKSWAGEN MARKETING STRATERGY IN INDIA

Submitted in partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

2010-11

Under The Guidance of

Dr. T.V.G.Sarma

M.A; M.Phil; Ph.D (Eco)

Mr. P.Naresh Kumar

M.Sc (Quan.Eco); M.Sc (Stat); M.Phil

Submitted by

Sr. No. Name Roll. No Exam. No

1 SWETA . GAIKWAD

2 PRIYANKA P. PATIL

3 SURAJ S. PATIL 177

Chh. Shahu Institute of Business Education & Research

University Road, Kolhapur-416 004

06


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CONTENTS

1. INTRODUCTION

2. HISTORY OF COMPANY

3. CHAKAN PLANT OF VOLKSWAGEN

4. MARKETING STRATERGY IN INDIA

5. FINANCIAL HIGHLIGHT

6.

PROMOTION, AIMS & CHALLENGES7. MODELS OF VOLKSWAGEN

8. INNOVATION

9. AWARDS IN INDIA

10.CONCLUSION


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INTRODUCTION

The world headquarters of Volkswagenare located in its home country inWolfsburg,Germany.

Volkswagen is currently Europe's largest automaker. Volkswagen is now largest car

manufacturing company inEuropes which is one of the proud feeling to company.

Volkswagenhas had a market share over 20 percent. It means if total car market produced 100

car in that 20 car produced by Volkswagen company.

Volkswagen officially ranks as the 3rd largest manufactureras measured by OICA in 2009.

(Organisation Internationale des Constructeurs d 'Automobiles)

In 2010, Volkswagen posted record sales of 6.29 million vehicles, with its global market shareat

11.4%.that means Volkswagenheld 11.4% global market share of total market share.


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HISTORY OF COMPANY

In 1930 Ferdinand Porsche madehis company.

The word "Volkswagen" means "people's car. It means all type of people can use Volkswagen

company car because it haveall levels of car for different level like middle level,high level

people thats why it called as people car.

Before the 1930's, therehad been mucheffort to create simple cars that everyone could afford,

but none met with profound success.

After theend of theSecond World War, in mid June 1945, responsibility for Volkswagenwerk is

placed in thehands of the BritishMilitary Government. mass production of the Volkswagen

Beetle is started.

In 1952 dealership opened doors inEngland which was the first there. In 1951 deluxe version of

the Beetle was exported. In 1952 theAmerican deluxe Beetles got hydraulic brakes.

One special thingabout beetle car is use by Alfred Hitler in second world war thats why it got

very important as compare to other car.

OnMarch 8th, 1953 theType 2 goes into production. The Volkswagen Bus, still today known to

many as the "VW Bully


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EXPERTOPINION ABOUT VOLKSWAGEN IN INDIA

Weare fairly new inIndian market. The brand awareness of Volkswagen is low. We

have to raiseawareness, createand improved the brand

(Lutz Kothe,ChiefGeneral Manager,Marketingand Public Relations, VolkswagenIndia)

He is saying that Volkswagen company new inIndian car market there is not much

awareness in brand they are want to improve brand awareness by various way

Volkswagen is committed to theIndian market, the proof of which is constant investment and growth thatwe provide through various project. India is one of our key markets and we know that the futureharbors a

huge potential.

(Jochem Heizmann, member of the management board, VolkswagenIndia)

He is saying that Volkswagen company make moreefforts and Indian car market

committed for that , the proof of which is constant investment in in various project.

India is one of the key market , whichhelp to improve of our brand not only inIndia but

all over world.


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JOINT VENTURE

y Volkswagenentered theIndian passenger car market in 2001 by launching its car brand koda.

the Skoda brand is launchOctavia car inIndian car market.

y In 2007, two of its other brands AUDI & VOKSWOGEN launch inIndia.

y Volkswagengroup Indiaemphasized onall aspect of marketing mix including 4P

1. Product- That concept which may be sold.

The word product qualifies a marketing concept. A product is more than a person,

place or thing. Nothing is more important to a marketing strategy than the "product

concept".

2. Price- To sell in a market

A market price has nothing to do with you or your company. Its incredible how few

people fail to appreciate this simple truth3. place - A gathering where people buy and sell

Place can mean geographic and demographic, or in others words, where and who. It

can also be the way you take your product to the market (distribution).

4. promotion. - The process of trading in a market

Ultimately, you will be ready to promote your product: to find new prospects and

draw them in. The types of promotion that are available to the strategic marketer

have not changed much since the invention of the telephone (telemarketing).

y Volkswagengroup mainly catered to the luxury segment ofIndian car market.


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CHAKANPLANPUNE

The Volkswagen plant inChakan occupies a total area of over 2.3million square meters (575

Acres),Chakan is one of the biggest car plant of Volkswagen inIndia which occupy largearea of

land near inPune

The plant has a production capacity of 1, 10,000 vehicles a year. In this plant every year

produced 1,10,000 vehicles .

. The plant was built withan investment commitment ofINR3800 Cores. this plant invested very

bigamount which is approximate three thousand eight hundred cores rupee.

SkodaFabia & VWPolo made in this plant.


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OWNERSHIP

Volkswagen is a publicly traded company, which issued

1. Ordinary shares - Ordinary shares are the most common kind of shares. An ordinarysharegives theholder voting rights in the company and entitles the person to all dividenddistributions as a part-owner of the company.

2. Preference shares- Preference shares allow holders to be paid dividends before ordinaryshareholders and they also have priority over asset claims if the company goes bust. Thedownside is that preference shareholders havea fixed dividend and only limited voting rightswith respect to company affairs

The ownership structure is complex.

The following table shows the current shareholder structure

Shares Held by

50.76% as of 30 Jan 2009 Porsche Automobile Holding

2.37% as of 30 Jan 2009 Porsche Holding GmbH

20.26% as of 16 Feb 2009 State of LowerSaxony

17% as of 18. Dec 2009 Emirate of Qatar

9.61% widely held


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VOLKSWAGENMARKETING STRTERGY IN INDIA

y Volkswagenentered the Indianmarketin 2001-

Volkswagenentered theIndian passenger car market in 2001 by launching its car brand

Skoda. TheSkoda brand is launchOctavia car inIndian car market.

y Volkswagengroup Indiahad twogroupcompanies:

1. Volkswagen India- VolkswagenGroup India is a part of VolkswagenAG, which is

globally represented by 9 brands- Audi, Bentley, Bugatti,Lamborghini,Scania,Seat,

Skoda, VolkswagenCommercial Vehicles (VolkswagenNutzfahrzeuge)and Volkswagen

PassengerCars. The product rangeextends from low-consumption small cars to luxury

class vehicles and trucks. TheGroup operates 60 production plants around the world. In

total more than 370,000 employees produce more than 26,600 vehicles orare involved in

vehicle-related services each working day.

2. VGSIPL- Volkswagen Group Sales India Private Limitedoperates a manufacturing plant at

Chakan,nearPune,Maharashtra withaannual capacity of 110,000 vehicles for production

of Volkswagen branded vehicles and also operates a manufacturing/assembly plant in

Aurangabad,Maharashtra which is also shared by kodaAuto IndiaPrivateLimited for

production ofAudi branded vehicles. Thenew plant at Chakan will also be used by SAIPL

to assemble the kodaFabia.


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MEANING MARKETING STRATGY

Marketing strategy is a process that canallow an organization to concentrate its limited resources on the

greatest opportunities to increase sales and achievea sustainable

Marketing strategies serveas the fundamental underpinning of marketing plans designed to fill

market needs and reach marketing objectives. Plans and objectives aregenerally tested for measurable

results. Commonly, marketing strategies are developed as multi-year plans, witha tactical plan detailing

specific actions to beaccomplished in the current year. Timehorizons covered by the marketing plan vary

by company, by industry,and by nation,however, timehorizons are becoming shorteras the speed of

change in theenvironment increases. Marketing strategies are dynamic and interactive. They are partially

planned and partially unplanned. See strategy dynamics.

Volkswagengroup Indiaemphasized onall aspect of marketing mix including 4P

1. Product-That concept which may be sold.

The word product qualifies a marketing concept. A product is more thana person, place

or thing. Nothing is more important to a marketing strategy than the "product concept".

2. Price-To sell ina market

A market pricehas nothing to do with you or your company. Its incrediblehow few

people fail to appreciate this simple truth

3. place -Agathering where people buy and sell

Place can meangeographic and demographic, or in others words, whereand who. It can

also be the way you take your product to the market (distribution).

4. Promotion. -The process of trading ina market

Ultimately, you will be ready to promote your product: to find new prospects and draw

them in. The types of promotion that areavailable to the strategic marketerhavenot

changed much since the invention of the telephone (telemarketing).


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PRODUCTLAUNCH

y Skodaauto Indiaentered Indian car market in 2001 by setting up a plant at Shendra.

KODA AUTO INDIA PRIVATELIMITED, more commonly referred to as SKODA AUTO

INDIA,establishedNovember 2001, is a fully owned subsidiary of theCzechautomotive

manufacturerSkodaAuto

y InMarch 2007,AUDI INDIA was set up as division ofVGSIPL.

AUDI INDIA is the wholly owned subsidiary ofGermanautomobile manufacturerAudi. Audi's

main competitors in theLuxury vehicles segment in theIndianAutomobileIndustry are

Mercedes-Benz, BMW, Jaguar, Bentley and Volvo.

Audi has been sellingLuxury cars inIndia since 2004,however theAudi India was established inMarch 2007 as a division of VolkswagenGroup Sales India

Audi India uses KODA AUTO INDIA PRIVATELIMITED manufacturing facilities in

Aurangabad,Maharashtra to assemble theAudi A4 and Audi A6 models locally.

InMarch 2009,VOLKSWAGEN INDIA & SKODA AUTO INDIA started a joint

manufacturing plant at Chakan,nearPune.

In mid 2009,Audi Indiaassembled only two model A4 & A6 inIndia

In late 2009, VolkswagenGroup India was marketing three different brands including :

Audi,Skoda & Volkswagen.


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VolkswagenFinancialHighlights (2007-09) (inRupee)

2009 2008 2007

Salesrevenue 1,13,808 1,08,897 1,04,875

Operatingprofit 6,333 6,151 2,009

Profitbeforetax 6,608 6,543 1,793

Profitaftertax 4,688 4,122 1,955

Netcashflow -2,679 7,109 5,631

Netliquidityon

Dec 31

8,039 13,478 7,133


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VolkswagenThird QuartileResults (inmillions)

Q3 2009 Q3 2008 % change

SalesRevenue 25,956 28,932 -10.3

OperatingProfit 278 1,485 -81.3

Profitbeforetax 262 1,481 -82.3

Profitaftertax 161 1,161 -86.1

Netcashflow 791 -2,408 -

Netliquidityon

Sept 30

13,391 11,767 + 13.8


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PRICE

LUXURYSEGMENT- Luxury vehicle is a marketing term fora vehicle that provides luxury pleasant

or desirable features beyond strict necessityat increased expense. The term suggests a vehicle with

greaterequipment, performance, construction precision, comfort, design ingenuity, technological

innovation, or features that convey brand image, cachet, status, or prestigeorany other discretionary

feature or combination of features.

CARS PRICERANGE

POLO 4.57 to 7.06 lacks

VENTO 6.99 to 9.24 lacks

JETTA 12.99 to 15.92 lacks

PASSAT 19.21 lacks

BEETLE 21.23 lacks


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AIMS & CHALLENGES

AIMS - Ouraim has been to breakaway from the communication clutter by being innovative &

refreshing with the way wenarrate our brand story to the customer.

Volkswagen, one of the largest car manufacturers inEurope, is betting big onIndia with its small car

portfolio. ThoughIndia contributes a mere 0.3% to theglobal sales of Volkswagengroup, the company is

planning to increase its market share in the country by 8 to 10% in thenext four-to-six years from 1.35%

now on the back of its highest sellingSkodaFabiaand soon to be launched Polo.

VolkswagenGroup is banking onIndia ina big way for theirgrowth in the future. Experts predict ahuge

increase in the overall demand for cars inIndia from 1.4 million units in 2009 to more than 2 million carsper year by 2014. As a part of the market development VolkswagenGroup aims to increase their market

share by 8-10% within thenext four to six years, Kurt Rippholz, spokesperson, Volkswagengroup said.

Germanauto maker said that it aims to sell one lakh units in theIndian market by 2014, largely on the

back of mass-market model Polo which it plans to launchnext year.

The company said the launch ofPolo in bothhatchbackand sedan models in 2010 will help it move

beyond thenarrow confines of being viewed as a brand cateringexclusively for the upper segment.

Polo will be manufactured in the companys Chakan plant nearPuneand the company is now undertaking

pre-production testing,Garg said. TheRs 3,800 CroreChakan plant, which opened inMarch this year,

has anannual capacity of 1.10 lakh units.

Volkswagenhad sold 1,566 units inIndia during 2008. The company currently sells its sedan Jettaand

Passat in the country, bothassembled at theChakan plant.


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CHALLENGES

Preparingforglobalchallenges

Today more thanever,global challenges suchas climate changeand scarce resources demand sustainable

solutions from industry and society that go beyond the usual boundaries of sectors and segments. As a

globally activeGroup, Volkswagen is addressing these challenges witha commitment to using them as an

opportunity to develop convincing solutions and use the findings in its strategic positioning

For many years now the VolkswagenGroup has beenemploying various methods to envisage the future

and thereby enhance its competitive position. These includeearly warning systems, trend researchand

future research,as well as drawing up scenarios and forecasts. The timely identification of impending

challenges and theassessment of risks and opportunities provide the basis for strategic decision-making.

Inall of this, the VolkswagenGroup brings to the tablea corporate culture that has evolved and been

proven over decades: a culture marked by sustainability, responsibility and far-sighted strategic

management,as currently reflected in the recently modified Group strategy "18plus".

Thefinancialand structuralcrisis

Particularly at a time like this, in the midst ofan unparalleled global financial and economic crisis,

commercial success can only beachieved througha far-sighted approach coupled with far-reaching

solutions. In our view, the dramatic developments unfolding worldwideare first and foremost a crisis of

trust, which leaves theauto industry as a whole facing thegreatest challenge in its history. The

VolkswagenGroup has adapted its "Strategy 2018" to the current circumstances and believes it has every

chance ofemerging from the crisis stronger thanever.

To this end we will be driving forward our strategic measures with theaim of further improving our

competitive positionat brand, regional and divisional levels. The key to this lies in the core topic of the

future: "GreenMobility". And by investing in state-of-the-art green technologies, the VolkswagenGroup

will become the most environmentally friendly automaker in the world.


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Globalisationand safeguardinglocalproduction

The dense web of international links that characterises globalised economic and trading relations

leaves the VolkswagenGroup facing particularly demanding challenges,aboveall in times ofglobal

financial and economic crisis. But while our presence inall of the world's main marketplaces does

involveahigher level of risk, it also offers better prospects for growth.

Healthand safety

The topic ofhealthand safety has been on the corporate social responsibility agenda ofautomakers

since well before the climate debate began. For decades now, Volkswagenhas beena role model of

active safety in terms of both occupational and road safety. But as a manufacturer, theGroup has only

a limited influence on issues suchas infrastructure, regulations and road conditions.

What we can do,however, is step up ourefforts to enhance both theactiveand passive safety of ourvehicles. Measures hereextend from vehicle-related safety systems that help to avoid accidents,all

the way to effective means of mitigating the consequences ofanaccident not least through the

targeted use of bodywork deformation orairbag systems. No less challengingand essential is the

global deployment of occupational safety standards that weare progressively tightening up at our

plants in the various regions.

Demographicchangeand employment

Then there is theglobal challenge of demographic change: while birth rates continue to rise in

threshold and developing countries, the proportion of olderand elderly people in industrialised

nations is growing, while birth rates are falling. This has far-reaching consequences for theeconomic

and social development of these countries from consumer behaviour patterns, via theavailable pool

of labourand the training of youngergenerations,all the way to provision for old ageand social

security systems


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TECHNIQUES

Electronicinjectionsystem.-

Fuelinjection is a system for mixing fuel withair inan internal combustionengine. It has become theprimary fuel delivery system used inautomotive petrol engines,havingalmost completely replaced

carburetors in the late 1980s.A fuel injection system is designed and calibrated specifically for the type(s)

of fuel it will handle. Most fuel injection systems are forgasoline or diesel applications. With theadvent

ofelectronic fuel injection (EFI), the diesel and gasolinehardwarehas become similar. EFI's

programmable firmwarehas permitted commonhardware to be used with different fuels.Carburetors were

the predominant method used to meter fuel ongasolineengines before the widespread use of fuel

injection. A variety of injection systems haveexisted since theearliest usage of the internal combustion

engine.

Multipointfuelinjectionsystem (MPFI).

Multi point fuel injection orMPFI uses several injectors,normally respective to thenumber ofengine

cylinders and placed in the inlet port ofeach cylinders.It is to benoted that fuel spaying is taking

place out side of the cylinderat the correct timeaccording to the piston position inside the

cylinder.There will beelectronic control unit orECU which will be receiving feed back from several

sensors likeengine speed sensor, fly wheel position sensor, vehicle speed sensor,atmospheric temp.

sensor,accelerator pedal position sensor intakeairflow sensor. This ECU will control the correct

amount of fuel to be injected and the proper timeat which the fuel will be injected at any speed and

load condition. This will ensure maximum power output at minimum fuel.

Electronic control system.

Inautomotiveelectronics,electroniccontrolunit (ECU) is ageneric term forany embedded

system that controls one or more of theelectrical systems or subsystems ina motor vehicle.Other

terms forECU includeelectronic control module (ECM), central control module (CCM), control

unit, or control module. Taken together, these systems are sometimes referred to as the car's

computer. (Technically there is no single computer but multiple ones.)Some modern motor

vehicles have up to 80 ECUs. Embedded software inECUs continue to increase in line count,

complexity,and sophistication. Managing the increasing complexity and number ofECUs ina

vehiclehas becomea key challenge for original equipment manufacturers (OEMs).


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Commonrailfuelinjectionsystem.

Common rail direct fuel injection is a modern variant of direct fuel injection system for petrol and diesel

engines

Common rail fuel injector

On diesel engines, it features ahigh-pressure (over 1,000 bar/15,000 psi) fuel rail feeding individual

solenoid valves,as opposed to low-pressure fuel pump feeding unit injectors (Pumpe/Dse or pump

nozzles). Third-generation common rail diesels now feature piezoelectric injectors for increased

precision, with fuel pressures up to 1,800 bar/26,000 psi.

Enginemanagementsystem.

TheEngineManagement System (EMS) is responsible for controlling theamount of fuel being injected

and foradjusting the ignition timing. Optimum functioning of theEMSassures maximum engine power,

with the lowest amount ofexhaust emissions and the lowest fuel consumption. TheOmnitekEMS offers

self diagnostic capabilities (OBD)and CAN communication.

TheEMS is comprised of sensors for intakeairand coolant temperature, intake manifold absolute

pressure (MAP)and throttle position (TPS),as well as sensors forengine speed and signals for the

required injectionand ignition sparkevents,and a sensor for informationabout the oxygen content in the

exhaust (4-WireOxygenSensor orWideband UEGOSensor). Furthermore, there is an idle speed motor

foradjustingand stabilizing the idle speed, oranelectronic throttle body and finally a fuel pressure

regulatorand fuel injector(s). The supplied high-energy ignition coils are controlled by the integrated

ignition module. Foralternative fuel applications fuel rail pressureand temperature sensors arealso

utilized.

TheECU calculates the correct amount of fuel and ignition timing by "reading" the information supplied

by various sensors and compares these values with theappropriate points in fuel and ignition-map of the

ECU.

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