Business Project V
David Guidi
MGT/101
April Solomon, Instructor
Baker College (Allen Park)
December 7, 2015

Business Project V
Abstract
Volkswagen is the 2nd largest automobile manufacturer in the world (Rieger, 2013). They have attained this position by providing a wide range of vehicles and services to fit all consumer needs. Their main competition (Toyota) targets the same customer base which makes it important for VW to find new ways of reaching new customers while at the same time maintaining their loyal customer base. The company is currently at a cross road. They are currently facing the worst crisis in its history. Solutions will need to be made in regards to lowering CO2 emission levels in their engines (Gardner, 2015). These solutions will be a huge financial investment by the company. Initially, this investment will set them back as a company. But, if done correctly, it will allow the company to flourish over the next 50 years with the new expansion opportunities in India and Brazil.
Three Things That I Did Not Know About Volkswagen
Over the course of this ten week Business class, I have learned so much in regards to Volkswagen. The three specific topics that I was not aware of before completing research are as follows: * Over the years, Volkswagen has shown to have a very aggressive promotional campaign. This has been attained by image based advertising. They have found that when customers see the “VW” logo, it signifies character and reliability. Because of this, Volkswagen has developed a strong customer loyalty base, which has been one of the main reasons that the company has grown so much over the last 100 years (Murphy, 2015). * Currently, Volkswagen’s main focus is for a new, expanding place of production is India. India has the fastest growing population and economy in the world. It is important that Volkswagen find the most efficient way to produce vehicles that the Indian public is looking for. If done correctly, this would significantly grow the company for years to come (Murphy, 2015). * Volkswagen Group offers a wide range of products and services. The company owns 13 vehicle brands. These include Audi, Volkswagen, Bentley, Porsche, Skoda, Lamborghini, MAN, Scania and motorcycle brand Ducati. They also offer related services including financing, leasing and fleet management. They are divided into two divisions, the Automotive Division and the Financial Services Division, and they have approximately 340 subsidiary companies (Murphy, 2015).
Critical Thinking/Problem Statement Volkswagen’s global environmental goal has always been to go ‘green’ by producing clean diesel vehicles. This concept fell flat on its face earlier this year when the EPA caught them cheating on emissions tests. Volkswagen became the target of regulatory investigations in multiple countries and Volkswagen’s stock price plunged by a third in the days immediately after the news. Volkswagen announced plans to spend $7.3 billion on fixing the emissions issues and have planned to recall 11 million vehicles in various countries throughout the world (Harder, 2015). This plan includes installing a retool kit that will be installed into each diesel engine that has been affected by this scandal. Although this would solve the emissions problem, the retool kit was not designed for the original diesel engine, therefore analysts believe that when the retool kits are installed, the engines could become “sluggish” and not run properly. This would compound the problem and could spell doom for Volkswagen. As stated earlier, I would choose the second possible solution. I would purchase all the affected vehicles back from the consumers. The consequence of this would spending more than $50 billion to re-design a new energy efficient diesel engine not to mention the cost involved in purchasing the vehicles. What Volkswagen needs is a fresh start and that begins with a new energy efficient product that will slowly but surely make people forget about the worst scandal in the history of Volkswagen (Sapienza, 2015).

References
Gardner, Timothy; Lienert, Paul; Morgan, David (2015, September 18) “After Year of Stonewalling, VW Stunned US Regulators With Confession” Retrieved Decemeber 7, 2015
Murphy, A. (2015, January 15) “2015 Global 2000 – The World’s Biggest Auto Companies” Retrieved December 7, 2015
Rieger, B. (2013, April 19) “The Peoples Car” Retrieved December 7, 2015
Sapienza, J. (2015, September 20) “Volkswagen Scandal: What Needs To Be Done To Fix” Retrieved December 7, 2015