The Indian subsidiary of German automobile manufacturer, Volkswagen AG (Volkswagen).

Volkswagen entered the Indian passenger car market in 2001 by launching its car brand - Skoda.
In 2007, two of its other brands Audi and Volkswagen, were also launched in India. Volkswagen
Group India emphasized on all aspects of marketing mix including product, price, place and
promotion. The company offered three brands including Audi, Skoda and Volkswagen that
together comprised of 15 different models as of late 2009. Volkswagen Group India mainly
catered to the luxury segment of the Indian car market. The company had established presence
in India through separate distribution channels for each of its brands.

In its initial years, Volkswagen Group India primarily used the print media to promote its
products. However, considering the growth potential of India's automobile market, the
company started using electronic, digital and out of home media along with print media. In
November 2009, the company launched an integrated marketing campaign to strengthen its
brand image.

Evaluation of Volkswagen in its marketing strategies in India:

Branding:

A brand is product that is distinguished by its personality & the major element that
distinguishes a brand is its tagline. In case of modern Volkswagen it simply reads ͞Volkswagen ʹ
Das Auto͟ in English ʹ The Car. It is short, its catchy & it simply says what it produces.

As fas as Volkswagen is concerned its size is huge, its popularity is quite restricted to Skoda &
Audi. Both of these brands have very well established themselves as reliable, luxurious &
quality car companies. This was achieved by both of these car companies when they organized
the ͞Pre Monsoon Campaign͟ which enabled their customers across its 61 dealerships a 20
point free check-up of the car which included cleaning of the plenum chamber, inspecting the
tire pressure & the wheel alignment, brake pads, wiper functions, all the interior & exterior
lighting, among other things. This was mainly done to ensure safe & hassle free driving.

On the other hand, Volkswagen had failed to capture the benefits of branding in the initial
stages of their own launch, but in recent times, with their new advertisements & slogans they
have been in a position to establish themselves with the likes of Toyota India & Maruti-Suzuki.

Today Volkswagen has a very good grasp of the Indian Automobile Market. This was shown
when they launched their best seller Polo in India at a very competitive price in 2010 thereby
beating the competition from Honda (with their car model of the Jazz). But they could not
duplicate this strategy for Skoda & Audi as those are luxurious car brands. Also they have an
established car market for their mid-segment cars namely the Skoda Octavia & the Audi A4
series.
The focus marketing strategy has been extensively used by Volkswagen in India with their 3 car
brands where Audi cars such as the A4, A6 and the Q7 cars have been targeted for the high-end
customers with a price ranging from 30 lakhs onwards; Skoda cars with their models of the
Octavia, Laura, Superb & Fabia have been targeted for the middle segment customers with the
prices ranging from 6 lakhs till 20 lakhs; and finally their own set of cars such as the the Polo,
Jetta, etc.

It͛s not that Volkswagen does not manufacture luxurious cars which are aimed at the high end
customers. In fact Volkswagen had first launched the Passat in India ad is now aiming to launch
another premium segment car which is targeted to compete with the Audi A6 & the Mercedes S
Class; the Volkswagen Phaeton. Overall Volkswagen caters to three different segments in India
with three different car companies.

Brand Positioning

Volkswagen, since its launch has come a long way in the Indian Car Market. It has positioned its
brands for every segment of the market in the minds of the consumers. Volkswagens brands of
Skoda, Audi and Volkswagen (VW) itself are all managed separately. Hence it͛s the brands
themselves that have created the market image. Audi the group͛s most expensive brand is a
high-end car maker which exclusively designs luxury SUVs & saloons. Whereas Skoda is a mix of
luxury and affordability, and Skoda has spent a lot of money on this research & postioning of
this image in the minds of the consumers. And lastly, VW is a mass segment car maker
developing and designing cars for the masses.

Marketing Mix relating to Volkswagen:

Product

The Volkswagen Touareg which is sold across India is made up of engine, seating, braking
technology, etc. which is jointly developed with Porsche (which is another car company
Volkswagen acquired in the year 2009). But earlier the Touareg was developed as a business
venture between the 2 car companies; also the Touareg was fully serviced and given warranty
by Volkswagen. This enabled the customer loyalty towards Volkswagen.

Price

In its 61 dealerships across India VW offers a high price for their cars as compared to their
competitors Ford & Honda. But it makes up for those high prices by giving their customers an
interest rate of a mere 4.5% to 5% as compared to 8% interest rates on the car loans given by
banks to other car makers. This can be attributed to Volkswagen͛s Financial Services, which it
operates solely to support its car sales to its customers.
The Volkswagen Group with its headquarters in Wolfsburg is a
a
a

 
aa 
 
 

a 
 Europe. In Western Europe, the
largest car market in the world, nearly every fifth new car came from the Volkswagen Group.
The company attained a global market share of 12.1 percent.

The Group operates a  a   in eleven European countries and seven countries in
the Americas, Asia and Africa. Around the world more than 320,000 employees produce over
21,500 vehicles or are involved in vehicle-related services on every working day. The
Volkswagen Group sells its vehicles in more than 150 countries. It is the goal of the Group to
offer attractive, safe and environmentally friendly vehicles which are competitive on an
increasingly tough market and which set world standards in their respective classes.

The Group's passenger car business is divided into a a. Under the leadership of
the Group, the Audi and Volkswagen brands are responsible for the results of their respective
Brand Group worldwide.
  a is made up of the Audi,
 and a brands and places an
emphasis on sporty values. The Volkswagen Brand Group is made up of the Volkswagen, Škoda
Auto, Bentley and Bugatti brands and stands for more classic values. Each brand retains
its 

 
  
and operates as an independent entity on the market. Together,
the product ranges extend from the low-consumption 3 litre vehicle to luxury class vehicles.
The Group͛s commercial vehicle products are the responsibility of the Volkswagen Commercial
Vehicles brand. Across all its brands, the brand group responded to declining markets with
flexible adjustments of production.

 !! "#"!. The aim of all business activity is to identify and exploit
opportunities to enhance the value of the business. In this, Volkswagen ʹ as a Group of
companies operating on a worldwide scale ʹ is also exposed to risk. The responsible handling of
global uncertainty forms part of the risk management system operated by Volkswagen. The
object of this system is to identify business risk in a timely manner and to limit it to such an
extent that the economic benefit of the relevant business activities outweighs the risk.

Alongside the existing reporting and early warning system, the risk situation is routinely
assessed on the basis of written and verbal surveys. The risk management system is an integral
part of Group management practice, and has been assessed by the Company͛s external
auditors. Accordingly, it conforms to the requirements of the German Law governing controls
and transparency in business (KonTraG).

$ !%"&"!

In close collaboration with its suppliers, Volkswagen has progressed its e-Business activities
begun in 2001 from a B2B marketplace to a B2B supplier platform. The portal at
www.vwgroupsupply.com optimizes the information flow between the Volkswagen Group and
its partners while at the same time creating a stronger link between supplier and Group
processes.
The core of the system is the new ͞VWGroupSupply͟ supplier database, which in future ʹ
containing, as it does, all the suppliers to the Volkswagen Group ʹ will represent one of the
largest component supplier listings in the automotive industry. In it, all suppliers will be able to
record their individual calling cards ʹ that is, the range of products and services they offer to
the Volkswagen Group.

The virtual applications, including the "Electronic Supplier Link (ESL)" online inquiry facility
online negotiating online catalogue purchasing "eCAP" capacity management online standard
texts will save time, cut costs and so boost the competitiveness of the Volkswagen Group. This
communications platform now also integrates other processes, such as technical modifications
and invoice processing, online.

The Volkswagen Group already manages nearly its complete procurement volume of more than
Φ 50 billion via the Internet.

The internet platform started in early summer of 2000 is up and running. Under the domain
"VW Group Supply.com" the most important components Online Catalogs, Online Inquiries,
Online Negotiations and Capacity Management have already been introduced to all brands and
regions of the Volkswagen Group.
cEurope's largest carmaker,Volkswagen agreed to buy a 19.9 percent stake in Suzuki Motor
Corp. for 222.5 billion yen ($2.5 billion) and jointly develop vehicles for emerging markets to
challenge global leader Toyota Motor.

VW and Suzuki plan to develop hybrids and electric vehicles under both car brands, Suzuki Chief
Executive Officer Osamu Suzuki said today at a joint press conference with VW in Tokyo. Suzuki
will buy as much as 50 billion yen in Wolfsburg, Germany- based VW's ordinary shares, while
VW will become the top shareholder in Hamamatsu, Japan-based Suzuki.

Suzuki controls Maruti Suzuki India Ltd., the maker of half of all cars sold in India, and VW is the
second-biggest overseas automaker in China, which is set to surpass the U.S. as the world's
largest car market this year. Combined annual worldwide sales of the two manufacturers will
exceed 8 million cars, accelerating VW CEO Martin Winterkorn's goal of toppling Toyota City,
Japan-based Toyota in deliveries by 2018.

&quo;The automobile industry is going through a fundamental shift,&quo; Winterkorn told

reporters. &quo;Alliances are at the top of the agenda and they are indispensable for
competition. The global crisis has speeded up this reorganization.&quo;

Volkswagen rose 86 cents, or 1.1 percent, to 79.75 euros at 3:28 p.m. in Frankfurt, valuing the
automaker at 30.3 billion euros ($44.6 billion). Suzuki added 3.5 percent to close at 2,370 yen in
Tokyo before the announcement. Maruti Suzuki, the carmaker 54.2 percent owned by Suzuki
Motor, gained 2.7 percent to 1611.1 rupees in Mumbai.

' %!
A decline in worldwide auto sales this year is prompting carmakers to form alliances and shift
investment to emerging markets, which have withstood the slump amid economic growth and
government subsidies.

PSA Peugeot Citroen, Europe's second-biggest carmaker, and Japan's Mitsubishi Motors Corp.
are in talks to deepen a strategic partnership that may involve an equity investment, the
companies said last week. Fiat SpA, Italy's top automaker, acquired a 20 percent stake in
Chrysler Group LLC in June.

Suzuki, Japan's fourth-largest carmaker, forecasts global sales of 2.3 million vehicles in the fiscal
year ending March 31. Volkswagen's Winterkorn said Nov. 25 that 2009 deliveries may
&quo;slightly&quo; surpass last year's record 6.23 million vehicles. The combined figure
exceeds Toyota's sales estimate of 7 million for the current fiscal year.
Volkswagen and Suzuki have been discussing a partnership since June, a person familiar with
the matter has said. Serious talks began in September, and Winterkorn visited Suzuki's
headquarters and factories last month, Osamu Suzuki said today. The transaction is subject to
regulatory approval and will probably be completed by January, the companies said.

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The carmakers plan to set up offices at each other's headquarters. Detlef Wittig, a 36-year
Volkswagen veteran who is in charge of sales, will be VW's representative at Suzuki.

&quo;This is clearly the next step in going head to head with Toyota,&quo; said Christoph
Stuermer, a Frankfurt-based automotive analyst with IHS Global Insight. The cross shareholding
is a &quo;very wise choice&quo; because it allows Suzuki to &quo;keep its face&quo; while
opening the door to Volkswagen, he said.

Based on VW's market value, a 50 billion-yen investment would give Suzuki a 1.3 percent stake
in the German carmaker.

Volkswagen Supervisory Board Chairman Ferdinand Piech has said he wants to bolster the
company with additional brands. The company this week completed the purchase of a 49.9
percent stake in Porsche Automobil Holding SE's carmaking unit, adding the maker of 911
sports cars as its 10th brand. Among Volkswagen's other marques are Skoda, Audi, Seat and
Bentley.

)!ß"! ""'!
&quo;Volkswagen is like a department store carrying everything from luxury brands to
truckmakers,&quo; Koji Endo, managing director of Advanced Research Japan in Tokyo.
&quo;What they're missing is any presence in India and Southeast Asia. The point of partnering
with Suzuki is to grab India.&quo;

Passenger-car sales in India rose 61 percent last month, the biggest gain in more than five
years. Car sales in China surged 42 percent in the first 11 months of this year to 12.2 million.

&quo;A Suzuki deal would be a bit more game-changing than Porsche,&quo; said Philippe
Houchois, an analyst with UBS AG in London. In the Porsche transaction, &quo;Volkswagen is
paying full price in an area where it's already strong Ͷ Europe and luxury cars.&quo;

VW CEO Winterkorn has a 10-year goal of increasing VW-brand deliveries by 80 percent to 6.6
million vehicles by 2018. As part of the Porsche transaction, VW has received shareholder
authorization to sell as many as 135 million preferred shares, valued at 8.7 billion euros at
market price.

„' *+ #
Suzuki is known for its minicar models, including the WagonR and Carry vehicles, which are sold
mainly in Japan, as well as for its Swift hatchback and Jimny small sport-utility vehicle.

The company began making cars in India in 1983 through a partnership with the government.
Suzuki took a majority stake two decades later, just before the venture, now called Maruti
Suzuki India, was listed in Mumbai.

Suzuki has been cutting ties with General Motors Co., which owned a 20 percent stake in the
Japanese carmaker until 2006. Suzuki said Dec. 4 that it will sell its 50 percent stake in a
Canadian joint venture to the Detroit auto company. GM first invested in Suzuki in 1981 and
Suzuki completed a purchase of its own shares from GM last year.

The Japanese company said it plans to use 100 billion yen of the proceeds from VW to repay
debt, and 122.5 billion yen for research and development.