Monday, December 30, 2013

Volkswagen Becoming More Popular Amid Record Profits

This first quarter of 2012 Volkswagen has seen its profits jump massively with them nearly doubling to 3.2bn Euros ($4.2bn; £2.6bn) compared with a year ago. This can be put down to many external factors however with brands such as Audi, Skoda, Seat and Bentley under their belt it is hard not to see why Volkswagen cars appeal to the masses.

On the profit announcements Volkswagen also said that they were performing incredibly well in all markets, and outperforming the competition in all regions much to the dismay of brands such as BMW, Citroen and Peugeot.

Why the sudden rise in popularity?

Volkswagen's record profits for Q1 2012 are quite surprising amid the economic outlook however as a brand Volkswagen has always been extremely popular in Germany its native country, the UK and other countries within the EU alike.

When shopping for a car whether on the lookout for a sporty hot hatch, economic diesel for business or even a supercar, Volkswagen is now a leading brand within the car market and the reason for this is simple; Volkswagen has a history behind it and also a great product portfolio.

Volkswagen has always been seen as a premium brand and some of their cars are seen as iconic. On the premium front, Volkswagen's are priced at the higher end of the scale in all markets they attack which has led to a brand awareness which attracts those with a higher disposable income and businesses alike. In the case of their Audi brand, cars sporting the four ring branding are seen as luxury and are highly sought after by many purely because of the persona that they carry.

It isn't all premium brands and high price tags, though.

Volkswagen owns Seat and Skoda, two car brands which appeal to completely different markets compared to Volkswagen and Audi.

Seat is the sporty youthful brand and Skoda is the underdog brand which carries a super low price tag. When you combine four car badges (VW, Audi, Seat Skoda) which appeal to those with a high income, those who are younger and want something cool and those looking for a genuine bargain, it is easy to see why Volkswagen cars are so popular and it is also easy to see why Volkswagen's quote above of outperforming the competition in all regions is feasible.

Aside from history, heritage, brand awareness and a large vehicle portfolio though, there are other reasons that Volkswagen is so popular within the markets they operate.

Resell value

Volkswagen cars hold their value notoriously well and in cases it is not rare to see a 4 year olf Volkswagen Golf GT 140 TDI with 100,000 miles on the clock sell for upwards of 8K, practically half the cost of when new whilst other competitors in the same segment (Renault Megane, Toyota Auris) drop like a stone above a certain mileage.

Reliability

VAG group cars have always scored well in reliability tests and this can be put down to a) lots of practice and years worth of experience and b) German engineering.

Throughout car history the saying 'German engineering' has been used a lot for a lot of different car brands to portray a sense of skill and craftsmanship, however it is hard to argue with that saying when all German manufacturers create extremely reliable cars.