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Volkswagen AG
Type Marque of Volkswagen Group
( ISIN: DE0007664005)
Founded 1937 by German Auto Association
Headquarters Flag of Germany Wolfsburg, Germany
Key people Flag of Germany Martin Winterkorn, Chairman of the Board of Management
Industry Automotive
Products Automobile
Revenue 104.875 billion (2006)
Net income 2.75 billion (2006)
Employees 324,900 (2006)
Website Volkswagen International

Volkswagen AG ( ISIN: DE0007664005), or VW AG, is an automobile manufacturer based in Wolfsburg, Germany. It forms the core of Volkswagen Group, which is the world's fourth largest car producer after Toyota, GM and Ford, respectively.

The name means "people's car" in German, in which it is pronounced [ˈfolksvagən]. Its tagline is "Volkswagen - Das Auto" or "Volkswagen - The Car". Its previous German tagline was "Aus Liebe zum Automobil", which is translated as "Out of love for the car" - or, "For Love of the Automobile", as translated by VW in other languages.


For timeline table: Volkswagen (timeline)

Origins in 1930s Germany

Ferdinand Porsche's Type 12 from 1931
Ferdinand Porsche's Type 12 from 1931

Adolf Hitler had a keen interest in cars even though he did not drive. In 1933, he asked Ferdinand Porsche to make changes to his original 1931 design to make it more suited for the working man. Hans Ledwinka discussed his ideas with Ferdinand Porsche who used many Tatra design features in the 1938 Kdf-Wagen, later known as the VW Käfer - or Beetle.

Changes included better fuel efficiency, reliability, ease-of-use, and economically efficient repairs and parts. The intention was that ordinary Germans would buy the car by means of a savings scheme ("Fünf Mark die Woche musst Du sparen, willst Du im eigenen Wagen fahren" — "Save five Marks a week, if you want to drive your own car") which around 336,000 people eventually paid into. Volkswagen honoured its savings agreements in West Germany (but not in East Germany) after World War II. Prototypes of the car called the " Kdf-Wagen" (German: Kraft durch Freude -- "strength through joy"), appeared from 1936 onwards (the first cars had been produced in Stuttgart). The car already had its distinctive round shape and air-cooled, flat-four, rear-mounted engine. The VW car was just one of many KdF programmes which included things such as tours and outings. The prefix "Volks" ("People's") was not just applied to cars, but also to other products in Nazi Germany; the " Volksempfänger" radio receiver for instance.

VW Type 83
VW Type 83

Erwin Komenda, the longstanding AUTO UNION chief designer, developed the car body of the prototype, which was recognizably the Beetle we know today. It was one of the first to be designed with the aid of a wind tunnel; unlike the Chrysler Airflow, it would be a success.

The new factory in the new town of KdF-Stadt, now called Wolfsburg, purpose-built for the factory workers, only produced a handful of cars by the time war started in 1939. None were actually delivered to holders of the completed saving stamp books, though one Type 1 Cabriolet was presented to Hitler on his birthday in 1938.

War meant production changed to military vehicles, the Type 81 Kübelwagen ("Bucket car") utility vehicle (VW's most common wartime model) and the amphibious Schwimmwagen which were used to equip the German forces.

Volkswagen factory with its own power plant
Volkswagen factory with its own power plant

1945: British Army and Ivan Hirst, unclear future

The company owes its postwar existence largely to one man, British Army officer Major Ivan Hirst REME. In April 1945, KdF-Stadt and its heavily bombed factory were captured by the Americans, and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factory was placed under the control of Oldham-born Hirst. At first, the plan was to use it for military vehicle maintenance. Since it had been used for military production, and had been in Hirst's words a "political animal" rather than a commercial enterprise, the equipment was in time intended to be salvaged as war reparations. Hirst painted one of the factory's cars green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000. The first few hundred cars went to personnel from the occupying forces, and to the German Post Office.

Some UK service personnel were allowed to take their Beetles back to the UK when they were demobilized, and one of the very first Beetles brought back in that way (UK registration index JLT 420) is still owned by Peter Colborne-Baber, the son of the original proprietor of the UK's first official VW Importer, Colborne Carages of Ripley in Surrey. By 1946 the factory was producing 1,000 cars a month, a remarkable feat considering it was still in disrepair: the damaged roof and windows meant rain stopped production and steel to make the cars had to be bartered for new vehicles.

The car and its town changed their Second World War-era names to Volkswagen and Wolfsburg respectively, and production was increasing. It was still unclear what was to become of the factory. It was offered to representatives from the British, American and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "is quite unattractive to the average motorcar buyer, is too ugly and too noisy ... If you think you're going to build cars in this place, you're a bloody fool, young man." (In a bizarre twist of fate, Volkswagen would manufacture a locally built version of Rootes' Hillman Avenger in Argentina in the 1980s, long after Rootes went bust at the hands of Chrysler in 1978—the Beetle outliving the Avenger by over 30 years)

Ford representatives were equally critical: the car was "not worth a damn." Henry Ford II, the son of Edsel Ford, did reportedly look at the possibility of taking over the VW factory but dismissed the idea as soon as he looked up Wolfsburg on the map and found it to be too close for comfort to the East German border. In France, Citroën started the 2CV on a similar marketing concept. In Italy, it was the Fiat 500 "Topolino".

1948–1974: icon for German regeneration

1949 Volkswagen Sedan
1949 Volkswagen Sedan
1958 Volkswagen Pickup
1958 Volkswagen Pickup
An original 1300 Deluxe, circa 1966.
An original 1300 Deluxe, circa 1966.
Rear, restored 1967 VW Beetle in Sri Lanka.
Rear, restored 1967 VW Beetle in Sri Lanka.
Volkswagen Beetle found in Torreon, Coahuila, Mexico
Volkswagen Beetle found in Torreon, Coahuila, Mexico

From 1948, Volkswagen became a very important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff (1899–1968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949 Hirst left the company, now re-formed as a trust controlled by the West German government. Apart from the introduction of the Type 2 commercial vehicle (van, pickup and camper) and the Karmann Ghia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968.

Volkswagens were first exhibited and sold in the United States in 1949, but only sold two units in America that first year. On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to standardize sales and service in the U.S. Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955.

Sales soared — due in part to the famous advertising campaigns by New York advertising agency, Doyle, Dane Bernbach. Led by art director Helmut Krone and copywriters Julian Koenig and Bob Levinson, Volkswagen ads became as popular as the car, using crisp layouts and witty copy to lure the younger, sophisticated consumers with whom the car became associated. Despite the fact it was almost universally known as the Beetle (or the Bug), it was never officially labeled as such by the manufacturer, instead referred to as the Type 1. The first reference to the name Beetle occurred in U.S. advertising in 1968, but not until 1998 and the Golf-based New Beetle would the name be adopted by Wolfsburg.

During the 1960s and early 1970s, although the car was becoming outdated, American exports, innovative advertising and a growing reputation for reliability helped production figures to surpass the levels of the previous record holder, the Ford Model T. By 1973, total production was over 16 million.

An original and unmodified 1963 VW Notchback.
An original and unmodified 1963 VW Notchback.

VW expanded its product line in 1961 with the introduction of several Type 3 models, which were essentially body style variations (Fastback, Notchback, Squareback) based on Type 1 mechanical underpinnings, and again in 1969 with the larger Type 4 (also known as the 411 and 412) models, which differed substantially from previous vehicles with the notable introduction of unibody construction, the option of a fully automatic transmission, electronic fuel injection, and a sturdier powerplant. Volkswagen added a "Super Beetle" (the Type 113) to its lineup in 1971. The Type 113 differed from the standard Beetle in its use of a McPherson strut front suspension instead of the usual torsion bars. Also the nose of the car was stretched 2 inches (51 mm) to allow the spare tyre to lie flat, and the combination of these two features significantly increased the usable front luggage space. Despite the Super Beetle's (marketed outside North America as the VW 1302, later 1303) popularity with Volkswagen customers, purists preferred the standard Beetle with its less pronounced nose and its original torsion bar suspension. In 1973, Volkswagen introduced the military-themed Type 181 or Trekker in Europe and the UK - Thing in America, recalling the wartime Type 81. The military version was produced for the NATO-era German army (Bundeswehr) during the cold war years of 1970 to 1979. The US Thing version only sold for two years, 1973 and 1974, due at least in part to Ralph Nader's automobile safety campaigns.

1974: from Beetle to Golf/Rabbit

Volkswagen was in serious trouble by the end of the 1960s. The Type 3 and Type 4 models had sold in much smaller numbers than the Beetle and the NSU-based K70 also failed to woo buyers. The company knew that Beetle production had to end one day, but the conundrum of replacing it had been a never-ending nightmare. The key to the solution was the 1964 acquisition of Audi/Auto Union. The Ingolstadt-based firm had the necessary expertise in front wheel drive and water-cooled engines that Volkswagen so desperately needed to produce a credible Beetle successor. Audi influences paved the way for this new generation of Volkswagens, known as the Polo, Golf and Passat.

The VW Polo was in fact simply a re-badging of the short-lived Audi 50, which had been hastily developed from a sedan design, the Audi 60, which never reached production as an Audi vehicle. However, VW produced it shortly after the introduction of the Polo as the VW Derby. In the rear of the car can plainly be seen that panels are added to the Polo structure to make a "three-box" design of sedan or sedan with a boot or trunk.

A 1975 American advertisement for the Volkswagen Golf, sold as the Rabbit in the U.S. and Canada.

The Passat ( Dasher in the U.S.), introduced in 1973, was again simply a fastback (available as either a hatchback or with separate boot) version of the Audi 80, using identical body and mechanical parts, and the Audi 80 was later produced on the same line in Wolfsburg as the VW Passat. Wagon versions were offered for overseas markets, however, for two years, if British and South African customers wanted an estate or wagon version, they had to go considerably up-market and buy the Audi 80 GL estate.

Production of the Beetle at the Wolfsburg factory switched to the VW Golf in 1974, marketed in the United States and Canada as the Volkswagen Rabbit until 1985 and as the Golf until 2006, when the Rabbit name was re-introduced. This was a car unlike its predecessor in most significant ways, both mechanically as well as visually (its angular styling was designed by the Italian Giorgetto Giugiaro). Its design followed trends for small family cars set by the 1959 Mini and 1972 Renault 5—the Golf had a transversely mounted, water-cooled engine in the front, driving the front wheels, and had a hatchback, a format that has dominated the market segment ever since. Beetle production continued in smaller numbers at other German factories (Hanover and Emden) until 1978, but mainstream production shifted to Brazil and Mexico.

Volkswagen from 1974 to 1990

Volkswagen Polo, 1990
Volkswagen Polo, 1990

While Volkswagen's range of cars soon became similar to that of other large European automakers, the Golf has been the mainstay of the Volkswagen lineup since its introduction, and the mechanical basis for several other cars of the company. There have been five generations of the Volkswagen Golf, the first of which was produced from the summer of 1974 until the end of 1983, sold as the Rabbit in the United States and Canada and as the Caribe in Latin America. Its chassis also spawned the Scirocco sport coupe, Jetta sedan, Cabriolet convertible, and Caddy pickup. North American production of the Rabbit commenced at a factory in New Stanton, Pennsylvania in 1978. The production numbers of the first-generation Golf has continued to grow annually in South Africa with only slight modifications to the interior, engine and chassis. It would be produced in the United States as the Rabbit until the spring of 1984. The second-generation Golf hatchback/Jetta sedan ran from late 1983 to late 1991, and a North American version produced in Pennsylvania went on sale at the start of the 1985 model year.

In the 1980s, Volkswagen's sales in the United States and Canada fell dramatically, despite the success of models like the Golf elsewhere. The problems had stemmed from the Rabbit, which had developed a reputation for bad electrical systems and oil burning. The Japanese and the Americans were able to compete with similar products at lower prices. Sales in the United States were 293,595 in 1980, but by 1984 they were down to 177,709. The introduction of the second-generation Golf, GTI and Jetta models helped Volkswagen briefly in North America. Motor Trend named the GTI its Car of the Year for 1985, and Volkswagen rose in the J.D. Power buyer satisfaction ratings to eighth place in 1985, up from 22nd a year earlier. VW's American sales broke 200,000 in 1985 and 1986 before resuming the downward trend from earlier in the decade. Chairman Carl Hahn decided to expand the company elsewhere, and the New Stanton, Pennsylvania factory closed on July 14, 1988. Meanwhile, Hahn expanded the company by purchasing a greater share of the Spanish car maker SEAT, which VW bought outright in 1990; the Czech car maker Skoda was acquired the following year.

Volkswagen had entered the supermini market in 1976 with the Polo, a stylish and spacious three-door hatchback designed by Bertone. It was a strong seller in West Germany and most of the rest of Western Europe, being one of the first foreign small cars to prove popular in Britain. The second generation model, launched in 1981 and sold as a hatchback and "coupe" (with the hatchback resembling a small estate car and the coupe being similar to a conventional hatchback), was an even greater success for Volkswagen. It was facelifted in 1990 and was still selling well after 13 years, when it was replaced by the third generation Polo in 1994.

Volkswagen from 1991 to 2000

The 2000 Volkswagen Golf GL, in North American form.
The 2000 Volkswagen Golf GL, in North American form.

In 1991, Volkswagen launched the third-generation Golf, which was European Car of the Year for 1992 (the previous two generations were nominated but lost to the Citroën CX in 1975 and the Fiat Uno in 1984). The Mark 3 Golf and Jetta arrived in North America just before the start of 1994 model year, first appearing in southern California in the late spring of 1993. The sedan version of the Golf was badged Vento in Europe (but remained Jetta in the USA, where its popularity eventually outstripped the Golf).

The late 1990s saw a gradual change in perception of the company's products - with Audi having elevated itself into same league as BMW and Mercedes-Benz, Volkswagen moved upmarket to fill the void left by Audi; with Seat and Skoda now occupying what was once VW's core market. The first tangible evidence of this was the fifth-generation Passat in 1996 with its high-quality interior trim and standards of build quality which were demonstrably a cut above the run-of-the-mill Ford Mondeo, Vauxhall/Opel Vectra and Peugeot 406.

This move upmarket was continued with the Golf MK4, introduced at the end of 1997 (and in North America in 1999), its chassis spawned a host of other cars within the Volkswagen group—the Volkswagen Bora (the sedan, still called Jetta in the USA), NewBeetle, SEAT Toledo, SEAT León, Audi A3, Audi TT and Skoda Octavia. However, it was beaten into third place for the 1998 European Car of the Year award by the winning Alfa Romeo 156 and runner-up Audi A6.

The other main models have been the Polo, a smaller car than the Golf, and the larger Passat for the segment above the Golf. The Scirocco and the later Corrado were both Golf-based coupés.

By the early 1990s, Volkswagen's annual sales in the United States were below 100,000, and many car buyers found the company's products to be lacking in value. Some automotive journalists believed that Volkswagen would have to quit the North American market altogether. VW eventually realized that the Beetle was the heart and soul of the brand in North America, and the firm quickly set about creating a new Beetle for American and Canadian showrooms.

In 1994, Volkswagen unveiled the J Mays-designed Concept One, a "retro"-themed car with a resemblance to the original Beetle but based on the Polo sub-frame. Its genesis was secret and in opposition to VW management, who felt it was too backward-looking. Management could not deny the positive public response to the concept car and gave the green-light to its development as the New Beetle. The production car would be based on the Golf rather than the Polo, because the Polo frame was too small for the car to pass crash test standards in the U.S. It has been quite popular in the North America and is now gaining in the EU.

Volkswagen's fortunes in North America improved once the third-generation Golf and Jetta models became available there. Sharp advertising and savvy promotional stunts, like including Trek bicycles and accompanying bike racks with a limited edition of the 1996 Jetta sedan, were credited for the firm's recovery in the U.S. and Canada, but the introductions of the New Beetle and the fifth-generation Passat were a major boost to the brand.

In the UK, Volkswagen's market share grew throughout the 1990s. In 1990, the Golf was Britain's 12th most popular car with nearly 50,000 units sold. The MK3 Polo achieved similar success in the mid 1990s, but in 1999 the MK4 Golf was Volkswagen's first-ever entrant in Britain's top 10 list of most popular new cars. Its success continued into the 2000s, while the Polo and Passat were never far outside the top 10. Bad news for Volkswagen during this era was a dip in customer satisfaction. A brand which had built its reputation on reliability was now being overtaken by marques whose reputations had been damaged by quality problems. This bad press took several years to eradicate.

Volkswagen in the 21st century

2006 Volkswagen Phaeton
2006 Volkswagen Phaeton

Volkswagen began introducing an array of new models after Bernd Pischetsrieder became Volkswagen Group CEO (responsible for all Group brands) in 2002. The fifth generation Volkswagen Golf was launched in 2004, came runner-up to the Fiat Panda in the 2004 European Car of the Year, and has spawned several cousins: SEAT Toledo, Skoda Octavia and Audi A3 hatchback ranges as well as a new mini- MPV, the SEAT Altea. The GTI, a "hot hatchback" performance version of the Golf, boasts a 2.0 L Turbocharged direct injection engine. VW began marketing the Golf under the Rabbit name once again in the U.S. and Canada in June 2006. (The GTI had arrived to North America four months earlier.) The fifth-generation Jetta, and the performance version, the GLI, are also available in the United States and Canada. The sixth-generation Passat and the fifth-generation Jetta both debuted in 2005, and VW has announced plans to expand its lineup further by bringing back the Scirocco by 2008. Other models in Wolfgang Bernhard's (Volkswagen brand CEO) "product offensive" include the Tiguan mid-sized SUV in 2008 and a Passat Coupé. In November 2006 Bernd Pischetsrieder announced his resignation as Volkswagen Group CEO and was replaced by Audi worldwide CEO Martin Winterkorn at the beginning of 2007. Winterkorn is credited with making Audi a challenger to the dominance of BMW and Mercedes and his design-led strategy has led to Audi being considered one of the most important brands in the world. It remains to be seen how Winterkorn's focus on design shapes the Volkswagen brand's future. Nevertheless, Volkswagen continues to have complicated relations with both unions and shareholders. The German state of Lower Saxony owns significant stock in VW, as does sportscar manufacturer Porsche. Recently Porsche has announced to buy the majority of Volkswagen's stock, thus becoming the new owner of Volkswagen.

The fifth-generation Passat, from 2001.5 to 2005 features a facelift from the 98-01 model.
The fifth-generation Passat, from 2001.5 to 2005 features a facelift from the 98-01 model.

In North America, VW faced many challenges. After rising significantly between 1998 and 2001, VW's North American sales began to fall sharply leading to a 2005 loss of roughly $1 billion (U.S.) for its operations in the U.S. and Canada. Profitablility has not been strong, and the lack of reliability of the company's South American and Latin American-produced cars appears to bear some of the responsibility for this situation. By 2005, its models sat near the bottom of Consumer Reports reliability ratings, and J.D. Power and Associates ranked VW 35th out of 37 bands in its initial quality survey. Attempts to enter a new market segment also compromised Volkswagen's standing in North America. In 2002, Volkswagen announced the debut of its Phaeton luxury car, which was critically acclaimed but not well received in the marketplace. VW announced its discontinuance in the U.S. market for the 2007 model year due to the disappointing sales.

The 2006 Jetta
The 2006 Jetta

Volkswagen in 2005, despite challenges, still maintained North American sales of 224,195 -- a dramatic increase from the low in 1993 when US sales totaled only 49,533 vehicles. Momentum continued for fiscal 2006, as VW's North American sales for the year were 235,140 vehicles, a 4.9 percent increase over 2005, despite a slump in domestic North American manufacturer's sales. VW plans to close out the decade with the release on several new vehicles worldwide and a barrage of advertising. In conjunction with the introduction of new models, production location of Volkswagen vehicles also underwent great change. The 2007 Eos, a hardtop convertible, is produced in a new facility in Portugal. All Golf/Rabbit and GTIs as of 2006 are manufactured in Wolfsburg, Germany rather than VW's Mexican factory in Puebla, where Golfs and GTIs for the North American market were produced from 1989 to 1998, and the Brazilian factory in Curitiba where Golfs and GTIs were produced from 1999 to 2006 (The Jetta has principally been made in Mexico since 1989). VW is also in the process of reconfiguring an automotive assembly plant in Belgium. The new models and investments in manufacturing improvements were noticed immediately by automotive critics. Favorable reviews for VW's newest cars include the GTI being named by Consumer Reports as the top sporty car under $25,000, one of Car and Driver magazines "10 Best" for 2007, and Automobile Magazine's 2007 Car of the Year. J.D. Power and Associates 2006 Automotive Performance, Execution and Layout (APEAL) Study scored Volkswagen fourteenth overall with strong performances by its new Jetta and Passat models.

The fifth-generation Golf, sold in North America as the Rabbit.
The fifth-generation Golf, sold in North America as the Rabbit.

Volkswagen is recognized as one of the leading small diesel engine manufacturers, and is partnering with Mercedes and other companies to market BlueTec clean diesel technology. Volkswagen has offered a number of its vehicles with a TDI (Turbo Direct Injection) engine, which lends class-leading fuel economy to several models. According to the United States Environmental Protection Agency, four of the ten most fuel efficient vehicles available for sale in the U.S. in 2004 were powered by Volkswagen diesel engines. They were a three-way tie for 8th (TDI Beetle, TDI Golf, TDI Jetta) and ninth, the TDI Jetta Wagon. As of 2007, VW has not yet offered a gas-electric hybrid powertrain such as that in the Toyota Prius (though a diesel-electric hybrid 5th generation Jetta was produced as a test vehicle). In addition, all Volkswagen TDI diesel engines produced since 1996 can be driven on 100% biodiesel fuel. For the 2007 model year, however, strict U.S. government emissions regulations have forced VW to drop most diesels from their U.S. engine lineup, but a new lineup of diesel engines compatible to U.S. standards are due for 2008.

The 2006 Eos hardtop convertible.
The 2006 Eos hardtop convertible.

Volkswagen long resisted adding an utility vehicle to its lineup, but it finally relented with the introduction of the Touareg in the early 2000s, sharing major components with the Porsche Cayenne sport utility vehicle. Though acclaimed as a fine handling vehicle, the Touareg has been a modest seller at best. Some automotive analysts blame the Touraeg's absence of a third-row seat, the relatively poor fuel economy, and the high vehicle mass. VW plans to add a compact SUV with styling influences from its "Concept A" concept vehicle. On July 20, 2006, VW announced that the new vehicle would be called the Tiguan. One major irony of Volkswagen's current North American lineup is the absence of a minivan, considering that VW is credited for inventing the minivan with its original Transporter, but the firm is currently developing just such a vehicle for the U.S. and Canadian markets with DaimlerChrysler, with current plans to introduce it in 2008. Volkswagen is also considering a new entry-level model for the North American lineup. A venture with DaimlerChrysler to produce such a vehicle was considered but dropped as of September 2006. Due to technical difficulty adapting the Polo to meet North American vehicle regulations, VW presented in 2006 the "Iroc" as a concept of the proposed 2009 Scirocco as a potential new small model.

In September 2006, Volkswagen began offering the City Golf and City Jetta only for the Canadian market. Both models were originally the Mk.IV Golf and Jetta but were later replaced with the Brazilian versions of the Golf and Bora. The City Golf and City Jetta were introduced to compete with the Toyota Yaris and Honda Fit. Volkswagen's introduction of such models is seen as a test of the market for a subcompact and, if successful, may be the beginnings of a thriving subcompact market for Volkswagen.

When Martin Winterkorn became the eighth postwar CEO of Volkswagen, the company made several personnel changes in Wolfsburg. Other key personnel changes were made at Volkswagen of America in Auburn Hills, Michigan, as VW tries to continue increasing U.S. sales while trying to return the American operations to profitability. In 2007 Volkswagen of America declared it would relocate its headquarters from Auburn Hills, Michigan to Herndon, Virginia, located in the Washington DC metropolitan area.

Though the VW Group already had their presence in India with Škoda Auto, Volkswagen introduced the Passat and Touareg with TDi engine to India's automobile market in September 2007.

Relationship with Porsche, and the "Volkswagen Law"

The company has always had a close relationship with Porsche, with the first Porsche car the Porsche 64 of 1938, using many components from the Volkswagen Beetle.

The two companies collaborated in 1969 to make the VW-Porsche 914 and 914-6 whereby the 914-6 had a 6-cylinder Porsche engine and the standard 914 had a 4-cylinder Volkswagen engine, in 1976 with the Porsche 912E (USA only) and the Porsche 924, which used many Audi components and was built at an Audi Neckarsulm factory. Most 944s also were built there although they used far fewer VW components.

The Porsche Cayenne, introduced in 2002, shares its entire chassis with VW Touareg, which is built at the Volkswagen factory in Bratislava. In late 2005, Porsche took an 18.65% stake in VW, further cementing their relationship and preventing a takeover of Volkswagen, which was rumored at the time. Speculated suitors included DaimlerChrysler, BMW, and Renault.

On March 26, 2007 Porsche took its holding of Volkswagen shares to 30.9%, triggering a takeover bid under German law. Porsche formally announced in a press statement that it did not intend to take over Volkswagen (it would set 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 VW, which is Porsche's most important partner. Porsche's move comes after the European Union moved against a German law that protected VW from takeovers. Under the so-called "Volkswagen Law", any shareholder in VW cannot exercise more than 20% of the firm's voting rights, regardless of their level of stock holding. The European Court of Justice has already indicated that the law probably breaks EU rules, and a full judgement to that effect is expected later in 2007.

As of July 2007, Porsche has borrowed 10 billion euros ($13.6 billion), in an intention to buy Volkswagen, and doesn't seem to be letting up on its acquisition of VW. The Stuttgart car-maker has tapped into a network of 37 lenders for a $13.7 billion loan to finance its purchase of VW shares. The money will go to pay for outstanding Volkswagen shares, since VW shareholders only offered up less than one-percent of their shares when Porsche offered them below-market-value sale prices. Earlier this year it was reported that of Porsche's 1.14 billion euro ($1.55 billion) fiscal profit in the first fiscal half of 2007, more than one billion ($1.36 billion) of it came from VW. In which case it would make sense to many observers that Porsche would do whatever possible to keep the two siblings together..

Hybrid vehicles

Volkswagen and Sanyo team up to develop hybrid vehicle battery system.

Volkswagen boss Martin Winterkorn has confirmed the company plans to build compact hybrid vehicles. There will definitely be compact hybrid models, such as Polo and Golf, and without any great delay", with gasoline and diesel engines. Also underway at Volkswagen's Braunschweig R&D facilities in Northern Germany is a hybrid version of the next-generation Touareg, due in 2010.

All future VW models to have hybrid option . “Future VW models will fundamentally also be constructed with hybrid concepts,” VW head of development Ulrich Hackenberg told Automobilwoche in an interview. Hackenberg mentioned that the car based on the Up! concept seen at Frankfurt motorshow , as well as all future models, could be offered with either full or partial hybrid options. The rear-engine Up! will go into production in 2011. Nothing has been said about plug-in hybrid option.

VW´s Chief of research, Dr. Jurgen Leohold, said the company's concluded hydrogen fuel-cell cars are a non-starter.

Current Volkswagen models


Golf Plus
New Beetle
  • Caddy
  • California
  • Caravelle
  • Crafter
  • Eos
  • Fox
  • Golf V
  • Golf Plus
  • Golf Variant
  • Jetta
  • Polo
  • Multivan
  • Passat
  • Passat Variant
  • Phaeton
  • Sharan
  • Touran
  • Touareg
  • Transporter

North America

Model MSRP (Cost in USD)
Rabbit ( Official site) $14,990 (excluding destination)
GTI ( Official site) $21,990 (excluding destination)
Jetta ( Official site) $16,990 (excluding destination)
New Beetle ( Official site)/
New Beetle Convertible ( Official site)
$17,180/$22,120 (excluding destination)
Passat ( Official site)/
Passat Wagon ( Official site)
$22,950/$25,225 (excluding destination)
Touareg ( Official site) $37,410 (excluding destination)
Tiguan TBD
Eos ( Official site) $28,480/$35,265 (excluding destination)


  • Gol
  • Polo
  • Golf/Golf Plus/Golf Variant
  • Jetta
  • Bora
  • Bora HS
  • Sagitar
  • New Beetle/New Beetle Cabriolet
  • Passat Lingyu
  • Santana
  • Santana 3000
  • Passat/Passat Variant
  • Magotan
  • Touran
  • Sharan
  • Touareg
  • Phaeton
  • Caddy
  • Transporter
  • Multivan
  • Crafter

South America

  • Fox/CrossFox/Suran (SpaceFox)
  • Gol/Parati/Saveiro/Voyage (Pointer)
  • Polo/Polo sedan
  • Derby
  • Golf
  • Jetta
  • Vento
  • Bora
  • New Beetle/New Beetle Cabriolet
  • Passat/Passat Variant
  • Touran
  • Sharan
  • Touareg
  • Phaeton
  • Caddy
  • Transporter
  • Delivery
  • Worker
  • Constellation
  • Volksbus

South Africa

  • CitiGolf
  • Polo
  • Golf/Golf Variant/Golf Plus
  • Jetta
  • New Beetle/New Beetle Cabriolet
  • Passat/Passat Variant
  • Touran
  • Sharan
  • Touareg
  • Caddy
  • Transporter
  • Multivan
  • Crafter

Cult status of the Beetle

Beetles used as taxis in Mexico City
Beetles used as taxis in Mexico City

Like its competitors, the Mini and the Citroën 2CV, the original-shape Beetle long outlasted predictions of its lifespan. It maintains a very strong following worldwide, being regarded as something of a "cult" car owing to its 1960s association with the hippie movement. Currently, there is a wide array of clubs that are concerned with the Beetle. The fans are quite diverse. Looks include the resto-look, Cal Look, German-look, resto-Cal Look, buggies, Baja bugs, old school, Disney's Herbie the Love Bug replicas, ratlook, etc. Part of their cult status is attributed to being one of a few cars with an air-cooled, horizontally-opposed engine design and the consequent ease of repair and modification as opposed to the more conventional and technically complex watercooled engine design. The original flat-four boxer design had less than 200 moving parts.

In the late 1990s, a group of Volkswagen enthusiasts formed Volkswagenism, a satirical religion based off of owners devoted loyalty to the Beetle, and the company. Under the leadership of founder Jason Gaudet, this "religion" has gained notoriety through radio, television and print coverage from around the world...turning ordinary fans of the car into Volkswagenists.

By 2002, over 21 million Type 1s had been produced.

Unfortunately on July 30, 2003, the last Type 1 rolled off the production line in Puebla, Puebla, Mexico. It was car number 21,529,464, and was immediately shipped off to the company's museum in Wolfsburg, Germany. In true Mexican fashion, a mariachi band serenaded the last car in the 68-year-old history. The last car was nicknamed El Rey, which is Spanish for "The King". The last 3000 type 1s were called the "Ultima Edición" or the last edition.

In the United States, Volkswagen enthusiasts frequent large Volkswagen-themed car shows, especially in the summer months. Many of these shows feature camping, a car show called a "show 'n' shine", drag racing, parts swap meet, raffles, burnout contests, and other events. Die-hard and loyal "VW-heads" attend these shows regularly, often traveling 500 miles (800 km) or more (even abroad) to attend their favorite event.

In the winter, a group of drivers of the "split window" bus model (1951-1967 Microbuses, trucks, campers, and panel vans) drive from Willits, CA, to Mt. Shasta CA, largely on unpaved back roads. This event is called the "Mt. Shasta Snow Trip Challenge" and is a good example of VW enthusiasts' trust in the durability of their 40-plus-year-old cars.

Relationships and investments


The company has had a close relationship with Porsche, the Zuffenhausen-based sports car manufacturer founded in 1931 by Ferdinand Porsche, the original Volkswagen designer. The first Porsche cars, the 1948 Porsche 356, used many Volkswagen components including a tuned engine, gearbox and suspension. Later collaborations include the 1969/1970 VW-Porsche 914, the 1976 Porsche 924 (which used many Audi components and was built at an Audi factory), and the 2002 Porsche Cayenne (which shares engineering with the VW Touareg).

In September 2005, Porsche announced it was buying a 20% stake in Volkswagen at a cost of €3 billion, with the intention that the combined stakes of Porsche, Volkswagen and the government of Lower Saxony ensure that any hostile takeover by foreign investors would be impossible . In July Porsche increased their ownership to 25.1% and in March 2007 to 30.9%.

Heavy trucks

  • The Wallenberg family began divesting its interests in various Swedish companies, but as a result of Volvo's aborted takeover of Scania AB, it agreed to hold a "significant share holding" in only one of Sweden's heavy truck manufacturers. This resulted in Volkswagen securing an 18% capital stake and 34% voting stake in Scania
  • Volkswagen has a 29.9% stake in German truck manufacturer MAN AG, who recently in 2006 launched a takeover bid for the Swedish truck maker Scania, in which VW holds 20.3% of company and 35.31% of the voting stock. VW has announced that it would like to see MAN and Scania merge together along with VW's Truck & Bus operations and form a new company in which VW has a blocking minority stake. A merged MAN-Scania would become the largest European Truck maker, leapfrogging both Volvo AB and DaimlerChrysler AG. However, DaimlerChrysler will still be the largest truck maker, as it has operations in the US where MAN and Scania do not.


  • In 1966 Volkswagen left the racing starting grid when Formula Vee — circuit racing with cars built from easily available VW Beetle parts — took off in Europe. It proved very popular as a low-cost route into formula racing.
  • In 1971 Volkswagen moved on to the more powerful Formula Super Vee, which became famous for hothousing new talent. In the 11 years it ran, until 1982, it produced a stable of world-famous Formula One drivers — names like Niki Lauda, Jochen Mass, Nelson Piquet, Jochen Rindt and Keke Rosberg. Volkswagen also notched up several victories and the championship in Formula Three.
  • In 1976 Volkswagen enter the under 2000 cc Trans Am class with the Scirocco and they won their class outright. Scirocco Trans Am Article/Advert
  • In 1981, now based in Hanover and renamed Volkswagen Motorsport, VW took a new direction into rallying with the launch of the first generation Golf, and Sweden's Per Eklund, Frenchman Jean-Luc Therier and the Finn Pentti Airikkala. The final chapters in Volkswagen Racing UK's rallying story were the 'one-make' Castrol Polo Challenge, and the Polo GTI 'Super 1600' in 2001.
  • In 2000 Volkswagen started a one make racing cup with the newly released to Europe New Beetle called the ADAC New Beetle Cup. Beside that the ADAC Volkswagen Lupo Cup, founded in 1998, is continued to support young talents on the way to the top.
  • In 2001 the department was renamed Volkswagen Racing and since then has concentrated all its efforts on developing its circuit racing championship, the Volkswagen Racing Cup.
  • In 2003 VW replace the ADAC Volkswagen Lupo Cup with the newly released Polo to become the ADAC Volkswagen Polo Cup.
  • In 2004 VW Commercial vehicles enter the European Truck racing series with the Titan series truck it became Back to Back champion for the 2004 and 2005 series.

The Dakar

  • In 1980 Volkswagen competed in the Paris-Dakar Rally with the Audi-developed Iltis, placing 1st, 2nd, 4th and 9th overall.
  • Volkswagen enlists Dakar Champion Jutta Kleinschmidt, the first female to win the Dakar in 2001, to help design and compete a Dakar Racer.
  • In 2003 the Hannover based team starts with a 2WD buggy named Tarek. It places 6th outright but took 1st in the 2WD and Diesel class.
  • In 2004 VW enters the newly developed Race-Touareg T2, finishing 6th overall and 2nd in the Diesel class.
  • In 2005 a updated Race-Touareg with slightly more power is entered with driver Bruno Saby, finishing in 3rd overall and 1st in the Diesel class.
  • In 2006 Volkswagen released the most powerful Race-Touareg yet: the Race Touareg 2. Five vehicles enter, with driver Giniel de Villers finishing in 2nd place overall and 1st in the Diesel class.

Volkswagen motorsport: around the world

Below are Official or Dealership sponsored Volkswagen Racing activities outside Germany.

  • China rally participation: Shanghai-VW Santana, Shanghai-VW Polo, FAW-VW Jetta and Shanghai-VW supported the 1st Shanghai F1 Grand Prix with a Polo Cup support series.
  • South Africa rally participation: Polo, SEAT Ibiza based Polo Playa, CitiGolf & Golf. Circuit participation: SEAT Ibiza based Polo Derby/Classic, A3 engined series which supports the A1 Racing series & the GTI engined F3 style racing series.
  • France: A French Volkswagen team entered the 2000 and 2001 Le Mans series with there 2.0 Turbo racer which produced around 356 kW/485 hp.
  • Brazil rally participation: Gol and Voyage and heavy trucks. Circuit participation: Brasilia, Karmann Ghia and Gol, Voyage. The Bora used nowadays in Stock Car is actually a plastic body around a tubular chassis with Chevrolet V8 engine.
  • Peru: VW Peru Rally the Fox in the S1600 class.
  • Japan circuit participation: Golf, Lupo and Polo Cup's.
  • Poland circuit participation: Golf with TDI Cup.
  • United Kingdom circuit participation: Lupo, Polo, Golf, Jetta (Vento/Bora), Scirocco, Corrado,Beetle, Type 3 & Caddy. Rally entries: Beetle, Type 3, Polo & Golf. VW Racing UK now have there own cup they also have had Rallyed a Polo 1600 class and Golf TDI.
  • Australia: VW has a very close relationship with Motorsport it was the REDeX and Mobil Trials of the 1950s that propelled VW to be a sales success in Australia. In 1999 and 2000 VW won the F2 Australian Rally Championship with the Golf GTI. In 2001 and 2002 VW raced the New Beetle RSI in the GT Performance series, it was close to the top of the board both seasons. In 2003 VW Aust. was the first to race and develop the R32 Golf in the 2004 GT Performance series and came 2nd overall.
  • Finland: In 2002 VW won the Finnish Rally Championship in a7/(F2) with a Golf IV KitCar with Mikko Hirvonen. In 1999 and 2000 VW won the Finnish Rally Championship in a7/(F2) with a Golf III KitCar. In 2000,2001 and 2002 VW won the Finnish Racing Championship in Sport 2000 with a Golf IV DTC.

Corporate structure

Schematic of Volkswagen's extended financial relationships.
Schematic of Volkswagen's extended financial relationships.

Volkswagen is part of the Volkswagen group, along with:

  • Audi — the one remaining brand from the former Auto Union group —bought from Daimler-Benz in 1964.
  • NSU — bought in 1969 by Volkswagen and merged into the Audi division, a brand not used since 1977
  • SEAT — majority owned since 1987
  • Škoda — bought in 1991
  • Volkswagen Commercial Vehicles — started operations in 1995, VWCV is in charge of all Commercial Vehicle developments within the group.
  • Bentley — bought in 1998 from Vickers along with Rolls-Royce -cannot produce cars using the Rolls-Royce marque because the trademarks went to BMW
  • Bugatti — name bought in 1998
  • Lamborghini — bought on June 12, 1998

From July 1998 until December 2002, Volkswagen's Bentley division also sold cars under the Rolls-Royce name under an agreement with BMW, which had bought the rights to that name. From 2003, only BMW may make cars called Rolls-Royce.

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