Universidad de La Sabana

Pedro López and Natalia Gómez

Volkswagen Electric cars

1. Analyze Volkswagen´s mission and vision.

Mission:

“We offer tailor made mobility solutions to our customers.

We serve our customer’s diverse needs with a portfolio of strong brands

We assume responsibility regarding the environment, safety and social issues.

We act with integrity and build on reliability, quality and passion as the foundation for our
work.”

VW mission, links directly the company and products offered with many factors that
constitute the model of sustainability. This means, while offering a great quality product that
can satisfy almost anybody’s needs, the company is well aware of social and environmental
consequences.

These 4 sentences establish clearly the commitment and priorities VW has, in terms of their
product. As a first point, the possibility of allowing its customers to mobilize in an almost
personalized individual way. Second, a large variety of options that can almost satisfy every
imaginable need of any customer. Third, the sustainable factor that shows VW is committed
to their social and environmental responsibility, they work and offer products in order to
satisfy the present needs of their customers while reducing or preventing the general
social/environmental consequences the product itself or its manufacture might cause in a near
future. And finally, the corporate values that assure the customer, the product is trustworthy.

Vision:

“We are a globally leading provider of sustainable mobility”

VW vision clearly establishes the final goal the company is headed towards. As the article
“Bet everything on electric” states, VW eagers to become the leader on electric cars, and the
company will make a huge investment in order to achieve this goal.

2. Does the change to electric cars affects the mission and vision statement?

In terms of VW’s mission, the company is assuming in a very conscious way the effects
their products are causing environmentally. Also, in the corporate values their refer to,
there are working towards real ecologic results that customers can rely on a 100% while
reducing CO2 emissions, which means in the change to electric cars the company will
improve its search an tests to avoid another social scandal that judges them as cheaters.

In terms of VW’s vision, electric cars affect completely this aspect of the company, as all
their money, technology development and hard work will be an effort focused on
achieving more rentable electric vehicles. The company establishes a complete
sustainable approach. Perhaps, this strategy is a marketing idea to overcome the low
social legitimacy perspective due to the cheat emissions scandal, or because the vehicle
market has a void on new ecofriendly transportations that customers are asking for.

3. What motivated Volkswagen to change its strategic plan?

According to the article “Bet everything on electric” there are several factors that lead to
this final choice.

First, the company’s emission cheating, these was a social scandal when it was revealed
that the stated diesel emissions contamination was 20% higher than those presented in
the VW’s tests. This scandal deeply damaged and harmed the company’s name and
image.

Second, the void in market. There is no vehicle company fully dedicated to sustainable
vehicles, many offer diesel cars and motors, others offer hybrid vehicles, and other offer
electric but for a very expensive price only few are able and willing to spend. Another
factor is the difficulty found with recharging these types of vehicles and finally the last
problem is the distance these cars are able to function, which is not much. Taking all
these limitations into account, no company is targeting this type of market and customers,
but the environmental concern and consciousness is an issue growing globally, which
means that if the company succeeds it could be the global provide of electric vehicles.

Third, meet clean air rules. New laws are being created in order to control and reduce
CO2 emissions. The European Union will be charging 95 euros for each excessive gram
of CO2 pollution, this means that by 2021 VW is estimated to a 1,4-billion-euro penalty
for its gas emissions. In order, to meet the clean air rules stated, the company has to
change their normal functioning because combustible motors are not the solution. By
developing, fully electric cars, the penalty could be reduced and the future contamination
prevented.

4. What are the pros and cons of electric cars?

Pros Cons
 Lower environmental impact  Price in production
 Cheaper to function (electricity  Price for customers
prices vs gasoline prices)  Limited travel distances
 Social health benefits (less  Difficulty to charge
pollution)  Low popularity
 EV’s are safer to drive  Not very comfortable (tend to
 Have more silent engines have two seats only)

5. What are the challenges that VW will face transitioning from a conventional car
maker to an electric car maker?
The transition between convectional car and electric car will required a huge
investment, it must change all the engine process in every factory, also the
introduction of a new kind of product in the market. Affordable electrics vehicles,
must be shown to the people and created a bounding, have to convince costumer that
this type of engine is the future, that all must have it, because it will cheaper,
environmental friendly and in some cases accord to the law of CO2 emission.
Volkswagen have a good relation with the customer, so they have to keep this relation
and exceed all the expectations that may surge around this new line of product.
 6. Analyze the marketing mix of VW (4P’s). Does anything needs to change with
the strategical turn?

Product: For the purpose of changing from combustion to electric doesn’t affect the
sales they have to maintaining the quality of their products, trying to keep engine
performance, with all the facilities for the customer needs, besides fulfill the goal of
100% free of CO2 emission.
Price: Volkswagen will have to offer a range of electric vehicles that can please all
type of customer, from the economic line to the luxury line in order to maintain the
clients that already has.
Promotion: This brand may keep the way has been done until now. Volkswagen
have invest a lot of money in advertising not only for car models, also invest in the
guaranty of the brand its self, selling it as a high quality, durable product.
Additionally, make promotion in social media networks, in order to people know
more about this new line of products.
Place: As they have planned, they must insert this electrics affordable cars in several
places to get in the market, targeting countries with environmental laws, that may
help the in reception of this new type of vehicles.
7. Analyze the VW business portfolio
Volkswagen offer all kind of vehicles, like hatchback, sedan, SUV, coupe, small pick-
up, pick-up and even trucks. In order to change all the portfolio to electric have to do
a big investment to supply all the needs in the market that the already have. The plan
is to make 3 million electrics cars, in different models, before 2025, starting in China
and Europe, this to satisfy all the needs of the costumes. With this amount of vehicles
will have leaders in the market share of the electric cars, and if they delivered a quality
product will maintain the costumers and make them loyal to the brand.
8. Choose at least an example from a VW product to illustrate a BCG Matrix
Star Question mark
Tiguan ID BUZZ
Cash Cow Dog
Jetta Crossfox