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VOLKSWAGEN

I. BRAND PLANNING
1. HISTORY AND BRAND OVERVIEW
The history of the Volkswagen brand began with the “Käfer”; development work
on this Nazi prestige project began in 1934. On May 28, 1937, the “Gesellschaft
zur Vorbereitung des Deutschen Volkswagens mbH“ (Company for the Preparation
of the German Volkswagen Ltd.) was formally established. The name was changed
to “Volkswagenwerk GmbH” in 1938, and the company built its main plant in what
has become Wolfsburg. However, the outbreak of war and integration in the arms
industry prevented mass production of the Volkswagen (“people’s car”) – instead,
military vehicles and other armaments were produced using forced labor.
After the war, the British instructed Volkswagen to build the Volkswagen saloon at
the end of 1945. With the Type 1 (Käfer) model, and the Type 2 (Transporter)
model added in 1950, Volkswagen became a symbol of Germany’s economic
miracle, above all as a result of the strong export orientation on the part of the
company converted into a joint stock corporation in 1960. Innovative and flexible
manufacturing systems made an appearance in the 1970s and led to the birth of a
new generation of Volkswagens with the Passat, Scirocco, Golf and Polo models.
Growth was boosted in the 1980s through advances in vehicle technology, flexible
production, and forward-looking international cooperation.

Today, VW is Europe's largest carmaker and is globally recognized (second


position worldwide), with a marketshare of almost 10%. As its globalization
advances, Volkswagen is emerging as one of the world’s most successful volume
car manufacturers, and today offers cutting-edge solutions for future issues such as
e-mobility and digitalization.
The Group operates 48 production plants in thirteen European countries and a
further six countries in the Americas, Asia and Africa. Around the world, more
than 660,000 employees produced in 2018 more than 11 million vehicles or are
involved in vehicle-related services each working day. The Volkswagen Group
sells its vehicles in more than 150 countries.
VW Market spread in 2018
VW is currently trying to refresh its brand and to overpass the recent Diesel gate
scandal.
Company was built on solid foundations and with healthy prospects. VW embraces
responsibility for people and the environment. It is a brand which is valuable,
which creates value and stands for values. VW has recently alligned the business to
the following three pillars: digitalization, electrification and an increase in
shareholder value.
With the future program TOGETHER – Strategy 2025 announced in 2016,
Volkswagen aims to become more focused, efficient, innovative, customer-
oriented and sustainable, and systematically geared towards generating profitable
growth. The program creates the framework and lays the cornerstones for them to
achieve their vision of being one of the world’s leading providers of sustainable
mobility. The Volkswagen Passenger Cars vision is “Moving people and driving
them forwards”. The “TRANSFORM 2025+” strategy therefore centers on a global
model initiative through which the brand aims to lead innovation, technology and
quality in the volume segment.
The history of the company - with all its trials and tribulations - is first and
foremost a story of impressive success.

2. BRAND HIERARCHY AND BRAND PORTFOLIO

As we already mentioned, the Volkswagen Group with its headquarters in


Wolfsburg is one of the world’s leading automobile manufacturers (the second
worldwide) and the largest carmaker in Europe. In 2007, the Group increased the
number of vehicles delivered to customers to 6.189 million (2006: 5.734 million),
corresponding to a 9.8 percent share of the world passenger car market. In 2015,
Volkswagen Group overtook Toyota and is now the world’s biggest car
manufacturer in terms of sales. In 2018 they delivered 10.834 million vehicles but
global market share has decreased to 7.38 %.
BRAND ARCHITECTURE
The brand architecture is a marketing tool used to show which brand elements
should be used to represent a company’s products (Keller, 2013). Volkswagen
Group’s brand architecture consists primarily of one corporate brand that oversees
twelve individual brands including SEAT, Skoda, Volkswagen, Audi, Bentley,
Bugatti, Lamborghini, and Porsche (Volkswagen Group Brands and Products). The
corporate brand is divided into two divisions: Automotive and Financial Services.
From the Automotive division, Volkswagen Group incorporates a branding strategy
that creates individual umbrella branding for each of its eight family brands.
Analyzing Volkswagen Group’s overall architecture and hierarchy, the corporation
has implemented a vertical line extension, extending into premium, or prestige
brands like Audi, Bentley, Bugatti, Lamborghini, and Porsche; however, the
corporation also maintains market coverage with mediumrange brands such as
SEAT, Skoda, and upper mediumrange brands such as Volkswagen (Volkswagen
Group Brands and Products).

BRAND PORTFOLIO The company reunites 12 different brands under the


same umbrella:

The Volkswagen Group is committed to maintaining the individual identities and


characters of all these different brands in the portfolio.
Brand portfolio structure
Luxury & Sport: Bugatti, Lamborghini, Bentley, Porsche,
Pemium: Audi
Upper-mid range: Volkswagen
Midrange: Seat, Skoda
Entry level : none

Each brand has its own character and operates as an independent entity on the
market. The product range extends from low-consumption small cars to luxury
class vehicles. In the commercial vehicle sector, the product offering spans pick
ups, busses and heavy trucks.
It is the goal of the Group to offer attractive, safe and environmentally sound
vehicles which are competitive on an increasingly tough market and which set
world standards in their respective classes.

3. BRAND IDENTITY, BRAND ELEMENTS AND THEIR EVOLUTION


(names, logos, symbols, characters, slogans, jingles, packaging)
A brand is the strongest and the most vital asset for any company. However, in the
pressure of generating sales, companies often forget that a brand is much more than
just a tagline, a logo, a positioning statement, a slogan or an advertising campaign.
A brand is those and much more. It is a promise and claim of performance and
distinction. It’s who you are and how you do business. There is so much parity in
the market today making the brand and its communication more important than ever
before. Times are changing and so is the audience. Sensing this, a number of brands
have evolved over time. One such brand that has refocused its communication is
Volkswagen. The brand has a rich legacy. The connection it establishes is uniform
across the young and old. It is classic yet cool. Its brand name means the ‘People’s
Car’ in German and its brand slogan “Das Auto” means ‘The Car’ in English.
The volume brand Volkswagen Passenger Cars was the very first brand in the
portfolio and is now the core brand of the corporation. It stands for innovative,
high-quality and reliable cars and has over 70 different car models in all the major
market segments. With its ‘Think Blue’ product lines, Volkswagen strives for an
environmental friendliness and fuel efficiency, which are significant values of the
brand. The corporation Volkswagen Group has a multifaceted and intricate
corporate brand identity, as it consists of so many brands with different characters
and identities
The corporate brand identity matrix applied to the Volkswagen Group.
In its annual report the corporation states that sustainability and, therefore,
environmental friendliness is one of the central core values of the corporate brand
(Volkswagen Group, 2015). This sustainability aspect is reflected in almost all of
the other elements of the corporate brand identity matrix. It communicates the
sustainability and ethical considerations when doing business to the stakeholders
and customers. This facet is also reflected in the mission and vision, as well as in
the internal culture so that employees will always bear ethics and sustainable
considerations in mind when taking business actions. Other important contents of
the corporate brand identity are the German character, high quality and innovation.
As previously stated, the Volkswagen Passenger Cars brand is one of the world’s
most successful car brands. The “Volkswagen – Das Auto.” slogan embraces the
core messages that distinguish the Volkswagen Passenger Cars brand: innovative,
offering enduring value and responsible. People all over the world associate
quality, reliability and German engineering skill with Volkswagen Passenger Cars.
Thus, the brand has been able to create a significant trust in millions of customers
who have made Volkswagen their first choice.
Volkswagen Passenger Cars Brand Identity Prism (based on Kapferer)
Brand identity shows a high level of consistency within the brand prism: German
quality, environmental responsibility, quality and value dominate most of the prism
THE LOGO

The logo of Volkswagen, as is seen currently, is a simple representation of the


initials of the company. While “Volks” in German stands for people, “Wagen”
stands for car.

Originally, the logo is said to have been designed in 1938. The logo was later
modified in 1996 and then again in 2000. At the time of the last modification,
aspects such as color blend and three-dimensional were introduced, to present the
logo with a unique design.

The origin of the logo design has however been surrounded by controversy. While a
certain group of people believe it to have been created by Franz Xaver Reimspeiss,
an employee of Porsche, there are others who abide by the theory that Martin
Freyer was the one who created the mark and also won a design competition
consequently.

However, despite the uncertainty, the logo is largely recognized as one of the most
remarkable logos to have ever been designed.

The Logo Shape:

The beauty of the logo lies in its simplicity, it contains only two letters (a V over a
W), which seem to be interacting with each other. The letters are held together with
a circle of the same line weight, effort has been made to include just the right
amount of “air” in the spaces around the central image so as not to affect the
legibility of the logo while at the same time, making the logo visually distinct.

The Logo Color:

The logo is a culmination of two colors, blue and white. The blue color represents
class, excellence and reliability while the white outlines charm, nobility and purity.
1937-1939
The first Volkswagen logo reflects its birth as the "people's car" that Adolf Hitler
wanted to motorize the citizens of Nazi Germany. The initial logo comprised of the
‘Nazi’ flag designed in the shape of a swastika symbol. Furthermore this symbol
also signified an ancient Nordic symbol called ‘Ginfaxi’ a binding in ancient rune
that supposedly granted victory in any battles fought.

The initial ads were in sync with the mission of KDF (Kraft durch Freude), ‘strength
through joy’, which showed pictures of family and friends relaxing and going for a
holiday in the car. Also, the print ads show friends and families visiting forests, hill
stations.

1939-1945
The original logo lasted only two years and changed during the period of World
War II. References to the cross disappear, but the cogwheel remains. In this way,
the design composed of the V and the W becomes larger and the proportions
become similar to those of today.
The peculiarity of this logo is that it is found practically only in military vehicles,
given the war conversion of all production during the conflict.
1945-1960
The one that goes from the postwar period to the beginning of the '60s is the
longest-running Volkswagen logo. It lasted 15 years and became famous not only
with the Beetle, but also with the different T1 vans.
The cogwheel disappears and the design of the letters widens. It is an immediately
recognizable logo, simple and very proportionate.
With new zeal and vigor and with the help of the then U.S. Marshall Plan,
Volkswagen became a feasible and flourishing business. The car was given a new
glossy paint job and a luxurious interior. It was made available in pastel green,
medium brown and bordeaux red. According to the general director of Volkswagen,
Mr. Rieger, the new paint job was more than just a visual enhancement, it was
symbolic of peacetime. olkswagen became a corporate powerhouse which helped
Germany in its resurrection from economic uncertainty. The residents of the country
also felt confident while driving the new swankier vehicles, new career
opportunities became a reality resulting in improved living standards.
1960-1967
This logo is the only one in the history of Volkswagen that has a square shape.
In these years, the Wolfsburg firm opened up to international markets, especially
North America, and a new design was necessary to maintain a more global image.

In the 1960s, another plant was added in Mexico as part of international expansion.
Further in 1965, almost a million bugs were sold. In 1968, Disney released its Love
Bug movie, and later the Herbie series, immortalizing the vehicle in screen glitz and
glamor.

The archetypal Volkswagens, the Beetle and the T1 bus, became the four-wheeled
symbols of the “peace and love” movement of the 1960s. From Hitler to hippies, not
many other companies, automobile or otherwise, can lay claim to that sort of
stranger-than-fiction corporate narrative. The brand had become truly iconic.

1967-1978
At the end of the '60s, the logo changed again and the square part was lost... never
to return.
The new design was very similar to the postwar one, but is thinner. In addition, the
colors are no longer black and white; the blue used in this logo appears to this day.
It is the most essential and minimalist logo in the history of Volkswagen. Until
recently, at least.
1978-1989
The '60s passed, the '70s arrived and, with them, the revolution of the K70, Golf,
and Passat. Volkswagen began to grow exponentially and also looked towards
China. A new logo was needed to reaffirm that maturity.
The basic graphic design remains the same and the two-dimensionality does not
change. Instead, the colors are inverted, with blue as the background and white in
the letters, while adopting a double frame.
1989-2000
In the next 11 years, the Volkswagen logo changes three times. The first version,
which lasted until 1995, is the simplest of all: it is practically the same logo used
between 1945 and 1960, but with the light blue color instead of black.
From 1995 to 2000, however, it returned to the graphics of the '70s and '80s, but
with slightly different proportions and colors, which change very little, as
confirmed by the coexistence of two almost equal logos during the last year of the
millennium.
2000-2012
With the third millennium comes three-dimensionality, with a new logo that seems
to rest on a kind of round platform.
The blue becomes a little less intense, especially in the second version, which lasts
only two years, from 2010 to 2012, while the proportions are now fixed.
2012-2019
The next logo, the one now being replaced, is basically an even more three-
dimensional version, and slightly smaller than the previous one.
This is ultimate evolution of a concept that's now changing to accompany
Volkswagen in a new era of electric mobility.
2019 - ?
Here it is, the new Volkswagen logo and the ninth since 1937. It's a marked
departure from the last two logos, eschewing all dimension for a simple, flat, two-
dimensional design. 
VW showed off the new logo design at the 2019 Frankfurt Motor Show, where it
was displayed in this white-on-blue combination, as well as blue-on-white and
black-on-white.

At the start of the 2019 International Motor Show (IAA) in Frankfurt, the
Volkswagen brand presented its new logo and brand design. This world premiere
marks the start of a new era for Volkswagen, accompanied by the presentation of
the full-electric ID.3¹ at the same time. The realignment of Volkswagen’s brand
design is one of the world’s largest rebranding campaigns. Here we explain the
guiding principles of “New Volkswagen” and provide answers to the most
important questions.

“2019 is the year of “New Volkswagen”. The comprehensive rebranding is the


logical consequence of this strategic reorientation. A new era is now beginning
for the brand.”

The main principles of the New brand:


Right from surviving the World War II to moving into diverse upscale sector
altogether to being recognized as the people’s car, it is certain that the brand has
seen a lot and come a long way holding on strongly to its distinctive brand image. It
strives to continuously do so by coming up with environment friendly cars in future.
Volkswagen truly resonates as one brand that constantly upgrades its brand image to
suit the times and changes, making it a one-of-a-kind brand personality!

4. STRATEGIC BRANDING ALLIANCES


Pooling strengths with strategic alliances – as VW mentions in their 2018 Annual
Report.
One of the most important issues to be tackled in VW way towards the accomplish
their strategy to expand in China and USA, to become world leaders in cars driven
by last technology and digitalization and to become recognized as leaders in CSR,
is that of the strategic brand alliances. We will list some of theirs here:
- Great brand strategy – the acquisitions and mergers of high valued brands
under the VW umbrella
- 2019 – newly launched Global Alliance with Ford Motor – to boost
competitiveness and better serve customers in an era of rapid change in the
industry
- MOIA– to enter the ridesharing and ridepooling services market – aims to
explore the driverless vehicle market
- 2019 – with Microsoft – development of VW automotive cloud
- Navistar International – builds commercial trucks, school buses etc
- 2007 – with Proton in Malaysia – gain better access to South-east Asia and
China
- With Varta – battery manufacturer
- With other components and parts producers and other partners along the
supply chain
- With universities and non-profit organizations

5. THE BRAND`S CURRENT POSITIONING IN THE MARKETPLACE


How would you characterize the positioning of your brand? Where are there
the greatest opportunities to further enhance that positioning?.

We can segment car buyers needs similar to Maslow’s ‘hierarchy of needs’


pyramid. Thus, while advertising vehicles, certain levels of needs can be
addressed, depending on segment.

Entry-level segment products satisfy basically first two levels of needs: ability to
transport something safely + some exclusively utilitarian features(e.g. large trunk,).
Mid-price vehicles have to add emotional component to the mix: comfort,
performance, excitement of driving. And premium segment products should
possess certain status-markers, that’ll establish buyers within desired social groups.
So, advertising campaign, promoting different car segments should focus on
addressing specific features, that’ll satisfy respective need levels.

Positioning the car brand may appear somewhat tricky. There are a lot of factors to
take into account, such as desired margin, potential volume and your own
capabilities to support that volume. 

Structure of Car market


VW is covering the midrange , midprice, premium and luxury segments !!
Positioning based on Price
From the perceptual mapping based on price, VW comes under the section of mid
quality and mid price. If the map is viewed correctly, then, Dacia offers low levels
of quality and price as compared to VW. Moreover, the top players like Mercedes
Benz and Lamborghini. However, Toyota and Honda are the better alternatives
which offer cars that have high quality and low cost.

Positioning based on car type

If we look at the perceptual mapping based on the car type, it is seen that VW is
positioned somwhere in the middle, and relates to all attributes such as: sporty,
classy, practical and conservative.
Volkswagen Automotive Group has created a personalized high-end car for a more
of a “wow” statement for the owner when they are driving down the street.
The low-end of Volkswagen Automotive Group cars include the SEAT, Skoda and
Volkswagen passenger car.
Volkswagen Automotive Group also has their commercial vehicles MAN and
Scania. Like the SEAT and Skoda, MAN and Scania are only located in Europe,
because of the little profit they would make trying to compete with the American
made commercial vehicles. Ducati motorcycles are commonly used as a racing
motorcycle and possess a high-end brand image in the motorcycle community.

6. VW MARKETING MIX
Product:
As previously explained, Volkswagen offers several vehicles in different countries.
Its top selling and most popular models include Volkswagen Polo, Volkswagen
Passat, Volkswagen Jetta, Volkswagen Sirocco, Volkswagen Tiguan, Volkswagen
Touran, Phaeton, Eos, and Beetle. All these cars are the product strategy in the
marketing mix of Volkswagen. Depending on the level of localization, features,
comfort, size, seating capacity, options, engine configurations and power several
different trims and variants are offered. The various body types Volkswagen offers
including hatchback, estate, sedan, coupe, convertible, SUV, crossover, coupe and
MPV. It also manufactures and sells Hybrid, Dual fuel and Electric vehicles.
Volkswagen cars, Polo and Gold also won the prestigious European Car of the
Year award, which is 50 years old.
Price:
Volkswagen pricing ranges from affordable to exorbitant. Volkswagen is leading
global automobile manufacturer. With 34500 vehicles sold every day, Volkswagen
prices its products competitively for certain developing nations and slightly more
expensively for economies where it is seen as a brand which can command a higher
premium. Volkswagen banks on its higher quality as a measure for its slightly
expensive prices. Psychological pricing is one of the tactics used by Volkswagen to
further its pricing objectives. Reduction in buyer remorse through perceived and
actual high quality helps them justify the extra money they pay for Volkswagen
cars. Spares too are priced on the expensive side. Hence, he pricing strategy in the
marketing mix of Volkswagen is mostly based on competition, segment, demand,
features offered in the car and the geography being served.

Place:
Following is the distribution strategy of Volkswagen:
Volkswagen cars are available almost everywhere throughout the world. Having
assembling lines and manufacturing facilities in several parts of the world. These
includes Germany, Mexico, USA, China, India, Indonesia, Russia, Czeck Republic,
Portugal, Spain, South Africa, Poland, Slovakia. After recognizing Indonesia as a
top destination for car and van sales, Volkswagen set up a new plant for $140
million towards the manufacturing of large transport vehicles and multivans. As far
as India is concerned Volkswagen to start the assembly of specific export modules
of engines and also local engines to increase localizations levels to 90% from the
current 70%. In its latest venture into Algeria, Volkswagen also launched a new
production plant there to help boost localizations levels and make cars cheaper.
Volkswagen boasts a truly international presence and has its distribution well laid it
out for the countries it operates in. Volkswagen cars are available throughout the
world via company owned dealerships and multi-brand car showrooms.
There are company specified retailers and distributors throughout the world who
are in constant touch with the parent and comply implicitly. Dealers also have
round the clock servicing and repair. Volkswagen also has a used car portal where
one can choose and buy his/her appropriate model. They also have bodyshops in
several parts of the town or cities and an exclusive workshop
Promotion:
Most of the Volkswagen communication takes place through print media in
magazines and newspapers. This is supported by communication through TV
advertisements and point of sales promotion. Now a days a good company has a
state of the art web portal, Volkswagen websites are highly informative, interactive
and a pleasure to watch. One can get any amount of detailed information regarding
the prices, features, retailers, and support services etc.
Volkswagen has always been forceful with its ad campaigns. As a part of its
marketing mix promotion strategy, Volkswagen has used 360 branding to promote
not only the parent company, but all its cars individually. With higher grade of
tensile strength used in its steel, greater depth and shine of paint, higher
craftsmanship of its cabins and better equipment levels has helped Volkswagen
drive ‘higher quality’ as a trait of all of its car and most of its promotions.
Aggressive promotional activities using social media networks and online
platforms including Twitter, Facebook, You Tube and Instagram help Volkswagen
remain at the top of the promotional game as competitors are increasingly heading
into online space. Product differentiation is one marketing tactic used in the
creatives for promotional activities of Volkswagen and safety and German build
quality are two traits used most often in campaigns of its vehicles.
Clever marketing has helped Volkswagen as far back as 1959, when its “Think
Small” campaign was as minimalist as the Beetle it was promoting. That pitch
helped reposition Volkswagen, dogged by its wartime association with Adolf
Hitler, as “something that was warm and friendly and the antithesis of Nazi
Germany.” It absolutely wiped the slate for many people, it was really
revolutionary.
Later campaigns, including “Lemon” and “Drivers Wanted,” kept Volkswagen
fresh. 

SOME OF VOLKSWAGEN CAMPAIGNS, SLOGANS AND TAGLINES

The tagline may also change with the release of a new model of the automobile
company but the vision and the interest of the logo is to allure the interest of
people. So as the Volkswagen, we could spot some taglines as follows:

 Das Auto— which means “The Car” (2007-2015)


 Play or get played.
 Driver wanted.
 Think small. (the 50`s - The “Think Small” campaign focused on high
impact, discrete messages that amplified the simplicity of the car and its
abstract appeal. This tactic helped shift American consumers away from
radical, negative associations and onto a small, family car perfect for the
parents of the Baby Boom.)
 Lemon
 Relieves gas pains.
 It’s not a car. It’s a Volkswagen.
 Small Wonders.
 Small can be powerful
 If only everything in life was as reliable as a Volkswagen
 For the love of the Car (Aus liebe zum Automobil.)

Currently, Volkswagen is rebranding with a new “authentic” strategy as it attempts


to put its 2015 emissions scandal behind it.

The “New Volkswagen” sees the car company “mark the start of a new era” with a
new logo and brand design that it promises will “not show a perfect advertising
world”.

VW is trying to create a new holistic global brand experience on all channels and
across all touchpoints.

“As a general principle, the aim in future will not be to show a perfect advertising
world. In our presentation, we want to become more human and more lively, to
adopt the customer’s perspective to a greater extent and to tell authentic stories.”

VW’s visuals will be bolder and more colourful, and come with a promise to focus
more on people than products. According to the brand, this means “the main
objective will be to present realistic situations that customers can identify with”.

The new logo shows a simplified VW, with changes including a switch to two-
dimensions and reducing it “to its essential elements” to ensure it works well in
digital formats.
“The new brand design marks the start of the new era for Volkswagen,” explains
Jürgen Stackmann, member of the brand board of management responsible for
sales, marketing and after-sales.

He adds: “By formulating new content and with new products, the brand is
undergoing a fundamental transformation towards a future with a neutral emission
balance for everyone. Now is the right time to make the new attitude of our brand
visible to the outside world.”

The ‘New Volkswagen’ strategy will affect both product design and marketing
across both passenger and commercial vehicles. It is accompanied by the launch of
its full-electric car, the ID.301, at the IAA Frankfurt International Motor Show to
highlight that Volkswagen’s future is “electric, fully connected and has a neutral
carbon balance”.

II. BRAND BUILDING ASSESSMENT


a. Resonance - PRODUCT RELATED ATTRIBUTES:

Attributes or benefits that consumers strongly associate with a brand, positively


evaluate, and believe that they could not find to the same extent with
a competitive brand 

 Stylish sleek design


 Quality - for consumers Volkswagen cars are strongly associated with very
good quality. They trust German production and associate it with
performance and innovation.
 Major home producers and German engineering - Volkswagen successfully
uses Germany’s reputation in technological precision and general quality of
goods. Therefore, Volkswagen tends to produce significant amount of
vehicle in motherland. In spite of ever-increasing labor cost in Germany,
Volkswagen still finds that additional gain from “Made in Germany” label
on their cars is worth more than domestic production expenditures.
 Premium and Luxury cars - Volkswagen is known for its top of the range
products. Although, general awareness of the fact that Volkswagen owns
multiple luxury brands is weak, It still bears additional marketing impulse to
core brand.
 Reliability
 Comfort
 Speed
 Safety
 Salience - Volkswagen has very strong brand awareness. It tends to be one
of the first brands to be associated with automotive sector. Although the
general consumer is unaware that the brand portfolio includes brands like
Skoda , Bugatti,and Lamborghini, the company ranks very high in the mind
of consumers thanks to the cognitive associations prompted by brand.
However, there is an interesting trend in volkswagen’s brand awareness
dynamics — it tends to go upwards in segment associations: VW is
increasingly viewed as expensive car, rather than “Volk’s”. 
 Performance - Volkswagen managed to establish one of the most effective
cross-platform systems in the world. You can find the same components in
Skoda, Volkswagen, Audi and Porsche. It means that luxury-segment quality
standards are applied to those components, which contributes to overall
quality of vehicles throughout all classes.
 Imagery - Volkswagen tends to build it’s marketing campaigns around
technical features of vehicles. Even the slogan of company states so: Das
Auto — The Car. So, VW targets those consumers that appreciate mostly
technology, precision and quality.
 Judgements - Volkswagen vehicles are prided for their quality.
 Feelings - Volkswagen products are strongly associated with such feelings
as security and self respect. Quality and upper-mid price targeting
significantly contribute to those feelings. But certain products of
Volkswagen, especially those deep in middle-class segment tend to be
associated with Fun. Various ads for Polo, Golf and Up are built around that
feeling.

It’s hard to hook consumers for long. However, being positioned higher in budget
segmentation, volkswagen cars are more than just commodity and they successfuly
managed to achieve and generate resonance on the brand. Powerful heritage of
models had very strong cultural impact on various societies throughout the world.
Every consumer segment has an unique way of perceiving the messages send by a
particular brand vis-a-vis others. The messages can be either explicit or implicit.  It
aims to reinforce existing information and identify or promotes new ones in the
mind of consumers. Depending of the nature of the product or service, the perceive
message can have a positive and negative effect on the brand. However, brands are
essentially looking to conveying a positive image by creating a durable and
desirable product. By extension of items such as Color, Shape, Slogan , Symbols,
etc. the brand seeks to grow their equity potential by doing their utmost to bring the
message thorough to end users. These adjectives or attributes promotes cognitive
association in consumers mind which leads to a quick recognition of the brand.
Quick mental decisions are formulated by consumers everyday seeking to get a
reward/satisfaction from what the brand has to offer. By responding to basic
consumer needs at the beginning, brands can create or promote communities that
shares the same values or passion. This is the main reason why brands seeks to gain
a strong position inside the consumer mind. Volkswagen is not exception to this. It
strives to send a positive message, in its own way, to reach the market.

b. Key marketing activities which contributed to the success of achieving


its resonance and positioning

In order to accelerate the process and aid the consumers, VW utilizes every mean
of marketing mix  to reach their intended target. From printing ads, TV
commercials, Celebrity Endorsement, Customer Service, Point of Sales, Word of
Mouth, etc. The brand is creating “noise” and “buzz”, to seduce every potential
consumer into becoming a loyal one.  All these ideas and tools are helping the
brand to build ‘equity’ and generate profits.

There are arrays of ideas, concepts, words and symbols that comes to mind when
we talk about VW. The company managed to tap into human emotions, their main
attributes are mainly linked to primordial emotions and basic human needs( safety,
survival, protection, trust,etc.) Thanks to the simple slogans they have used, the
company is able to to connect with their customer instantly. Although some of
them were in German, consumers associated the language, in this particular
context, as a symbol of quality,reliance,  craftsmanship,great engineering and
strength. Further segmentation of the market led to other words associate with the
brand. The car manufacturers brand also come to mind in terms of luxury and
prestige when we look into Porsche, Lamborghini and the Bentley line. These
brands helped the company to further extend their brand ‘equity’ around the world.
What really lies behind this brand “EQUITY”, resulting from humans perception, is
the overall exposure and spread knowledge of the brand. Build on human emotions,
either physical or mental manifestations, brands capitalized on the associations
made by the consumers once exposed to the messages or ideas conveyed by then.

As consumers, we seek to get answers and somehow, a connection with the brand.
We do identify with their culture and readily create an association with a particular
model or message emanating from the brand. It also reflects the right approach that
the brand are doing regarding the target market and the solutions or answers
provided. By differentiating themselves from the competitions ( via jingle, slogan,
symbols,physical shapes, etc.) their are able to hammer and convey the right
information in a short,sweet and concrete way.

VW is looking to capture consumers attention and loyalty by tapping into their


unique ‘personal traits. By “personalizing” the brand, VW is looking to make that
emotional connection in order to appeal to the average consumer. Moreover, the car
maker hardly use celebrities to endorse their vehicles. This approach is more
evident when the vehicle belongs to price point category.

This is the reason why every VW model coming out of the has its own set of
attributes that conveys power, comfort, elegance, prestige, affordable price,
practicality, etc. These attributes helps to make the connection with the consumer
by promoting differentiation or integration of the brand, from a social standpoint.
Further, by responding to the need of each consumer segment, the company
increases its “equity” regarding the competition.

ATTRIBUTES

Volkswagen Automotive Group key marketing activities have contributed to the


success of the positioning in many ways. For their high-end cars by making them
uncommon and almost unavailable in North America they have been able to
maintain a prestigious image. For their low-end cars they have effectively
integrated similar marketing channels to help them compete with other local and
foreign distributors. Their Ducati racing bike has been successful in marketing in
the motorcycle community making it one of the most sought after racing bike in the
North America.
c. How would you suggest that they improve on their brand building activities?
Established since 1937, Volkswagen had a long time to invest in and build the
brand resonance. Volkswagen’s brand resonance is reflected in the following
categories:
1. Brand salience:
It is not difficult to think of Volkswagen when a person wants to purchase a
car. Volkswagen is one the most popular car brand along with Toyota, Ford, and
BMW... American and European people will mostly likely to recognize a
Volkswagen car or its sub-brand one or even when just look at their logos.
However, customers will not think of individual brands of Volkswagen such as
Bentley, Audi, and Lamborghini… These brands are luxurious ones which target at
only wealthy class. So the breadth of the German Corporate is still very limited.
Nevertheless, Volkswagen recently applied its slogan “Das Auto” which means
“the car” in most language. With “Das Auto”, Volkswagen wants to make it name
corresponding to car in general. People would perceive Volkswagen as a word for
car, as Hoover for vacuum. The purpose of this is to make increase both the breadth
and depth of the brand so that whenever anyone mentions a car, they would think
of Volkswagen immediately.
2. Brand imagery: Each brand of Volkswagen has different ways to define its
image:
 Audi: In the premium segment, Audi has become one of the strongest car
brands worldwide under the motif “Vorsprung durch Technik” – Head
start through technology. The brand aims to take over market leadership
in this segment and relies heavily on its sporty, high quality and
progressive image. The success of Audi’s four rings in all markets around
the world, coupled with the numerous honors and awards conferred on
Audi models, is impressive proof of the fact that Audi has evolved into a
premium, high prestige brand. This success is primarily attributable to a
consistent marketing strategy with innovative engineering solutions and
an emotional design language (Volkswagen Annual Report 2012).
 SKODA: With its “Simply clever” slogan ŠKODA has become one of the
fastest emerging brands, particularly in Europe and China. The brand
relies on delivering a strong value proposition and an attractive design,
coupled with intelligent ideas for the use of space that are technically
simple but offer refined and practical solutions. The high recognition for
the brand concept is reflected in its numerous awards for ambitious,
innovative and sophisticated vehicle design.
 SEAT: Models that regularly win awards for their outstanding design are
representative of the SEAT brand image. By sharpening the brand profile
and placing additional focus on the most important brand values of
“dynamic”, “young” and “design-oriented”, SEAT is aiming for stronger
growth, particularly in Europe. The new brand claim “Enjoyneering”
suitably expresses the character of the brand as a passionate perfectionist
and emotional technology leader.
 Bentley, Bugatti and Lamborghini round off the brand diversity of the
Volkswagen Group in a refined manner. They reside in the luxury vehicle
segments and distinguish themselves by their exclusivity, power and
elegance.
 Volkswagen Commercial Vehicles stands for superior mobility with its
three core values of reliability, economy and partnership. It offers a range
of different transport solutions at the highest levels of engineering for
different customer groups. The light commercial vehicles in the Caddy,
Multivan/Transporter, Crafter and Amarok ranges are tailored to meet the
individual transportation needs of customers in retail and craft businesses,
as well as civil authorities and service providers. Family-friendly MPVs
and leisure-oriented motor homes are valued by private customers as
derivatives of our light commercial vehicles.
 Scania: The success of the Swedish Scania brand is based on the core
values of “customer first”, “respect for the individual” and “quality”. For
over 100 years, the company has been manufacturing high-performance
trucks and buses with highly innovative technology and offering
customers efficient transport solutions in combination with a variety of
service packages, including financial services.
3. Brand feelings:
Volkswagen has built up its brand feelings from different levels. Some products
make users feel warm; some fun, and some secure. Nevertheless, most of
Volkswagen cars focus more on excitement, social approval, and self-respect –
more gravity feelings rather than the intensity. These private feelings create a stable
stand for Volkswagen in the market.
 Excitement: Volkswagen commercials attempt to invoke happiness and
excitement from audiences. Slogan or tag line “Get in. Get Happy”.
 Social approval: In 2010, Volkswagen equipped Africa with
infrastructures to organized World Cup 2010. The Corporate feels its
social responsibilities and an urge to support Africa. Volkswagen built
infrastructures, provided education, enhanced living standards, and
relentlessly fought HIV in Africa. These are just a part of what
Volkswagen did to give back to community. This helps to build
Volkswagen as a corporate with a cause, gaining social agreement. The
impact of charity in Africa will blur the side of environment-unfriendly of
car engines. People will look at Volkswagen with a great amount of good
will after accomplishment is Africa is broadcasted.
 Self-respect: With the sleek designs and powerful engines, any of
Volkswagen cars is a symbol of delicacy. In addition, the cash value of a
Lamborghini, Bentley, or Audi always dictates the class of the owner.
Customers could feel the taste of accomplishment when they own a
Volkswagen.
4. Brand resonance:
 Loyalty: Volkswagen owns a large amount of loyal customers. Since each
brand of Volkswagen has distinctive characteristic and values, customers
rarely change the brand. For example, a person who loves Lamborghini
would never buy a Toyota or BMW. The car brand is the customer’
brand. It is consistent with their style, which the rate of repeated purchase
is high. Interestingly, the brand that has most loyalty is Volkswagen
passenger cars. Customers are satisfied with not only the values of the
brand but also the outstanding quality of the product.
 Community: There are many communities of Volkswagen both online
and offline. Some communities share the experience of owning a
Volkswagen and others want to know more about Volkswagen’s car
feature. Moreover, there are clubs for people who love Volkswagen. They
even have t-shirts and souvenir for their own groups, which demonstrate
the spirit of the community. Some communities include:
o http://www.communityvw.net/
o http://vwcommunity.ca/
o http://www.ivdub.com/groups/
These communities are concrete evidences of engagement of customers in
Volkswagen. People who own a Volkswagen share some certain relationship and
feel connected, which will connect them to the brand. The relationship between
customer and the Corporate is really enhanced. They attempt to better understand
the brand and contribute to the development of the products.
 Engagement:
o Commitment in sport and culture: Volkswagen Arena: Volkswagen
Arena is a multi-purpose stadium in Wolfsburg, Lower Saxony,
Germany and serves as the home stadium of the 2008–09 Bundesliga
champions VfL Wolfsburg. When people went to the Volkswagen
Arena, they can feel the spirit of Volkswagen, and really engaged in
brand. Moreover, reputation from sponsoring numerous sport events is
a precious source of brand equity to Volkswagen (13Ap).
o Volkswagen Junior Master: The football program in 20 countries with
800 teams. Juniors participate in the game to show their passion and
commitment to soccer. The program is a good chance for juniors to
learn a play. At the same time, Volkswagen can build up brand image
to juniors and their parents.
o Museum of Modern of Art: Volkswagen cooperates with Museum of
Modern Art in New York to promote Think Blue – innovative
solutions to efficiency and green ecosystem. This partnership
improved Volkswagen’s reputation as a friendly partner in
environment reservation, in contrary to the pollution that cars usually
cause.
o Motor Sport: Volkswagen participated in Formula 3 races in Dakar.
The team is always the forerun and takes advantages of technology to
conquer challenging races. Customers can support Volkswagen team
as a football team, with all of their heartedness and enthusiast. The
relationship between customers and Volkswagen is elevated to a new
level (13Ap).
5. Summary of brand resonance:
Volkswagen has focused on brand salience, brand feelings, brand judgment, and
brand resonance to define its name. In each area, Volkswagen Groups has done
variety of activities to promote it names. Therefore, customers can perceive
Volkswagen as an outstanding brand with a wide range of brand salience,
outstanding images, positive feelings with social responsibilities, and high
engagement.

III. BRAND GROWTH ASSESSMENT

Growth potential and providing recommendations


a.Brand value assesment
Volkswagen’s brand value can be assessed from 3 areas: sale number, it
competitors, and brand resonance.
1. Brand resonance:
Based on what the Group has attempted since it was founded, Volkswagen has built
up concrete and consistent brand names. Each brand has different values due to
different target markets and customers. Through history of expansion, the
enormous value of Volkswagen makes it easy to expand, spin-off, or acquire any
other product line. All of this influence confirms Volkswagen as a highly valuable
brand.
2. Brand value numbers:
In general, Volkswagen brand value is $17,758m in 2012, and increases to
$23,666m in 2013. And among 100 global brands, Volkswagen’s rank is 55. All of
this number reflects the gargantuan value of Volkswagen (Brandirectory ).
3. Competitors:
Among the 7 most popular luxurious car brands (BMW, Mercedes-Benz, Audi,
Lexus, Porsche, Bentley Motors and Rolls-Royce Motor Cars), three of them
belong to Volkswagen Group. Volkswagen brands have taken over a large market
share in luxurious car. However, to fully understand Volkswagen’s value, we
should look at its strongest competitor, BMW and how it is doing.
In short, brand resonance, brand value numbers, and the strongest competitor,
BMW, has clarified the colossal value of potential of Volkswagen.
b. How would you critique your brand`s architecture
The current architecture allows each individual brand to maintain its own identity;
as a result, the positive associations, feelings, and judgments of each individual
brand is separate than that of Volkswagen Group’s. The Group implements a
“House of Brands” approach and the broad architecture allows for a diverse market
coverage as well as consumers’ perception of each brand’s credibility. The
umbrella branding strategy can be positive for Volkswagen Group in cases of
negative associations, where these associations might not necessarily affect the
public’s feelings and judgments about the Group specifically, but only the
individual brand. Each individual brand maintains different modifiers to further
create points-of-differences between different makes.
c.What is good and bad about VW hierarchy
Volkswagen Group’s overall architecture currently reaches into both family-
oriented or middle-class markets and extends into luxury, prestige markets. The
hierarchy effectively establishes points-of-differences from both entry-level brands
and prestige brands; however, opportunities remain in the low-end or value-
conscious markets, where Volkswagen group has yet to extend into. Though SEAT,
Skoda, and Volkswagen are valued as high quality in markets, an extension into a
value-conscious brand, possibly costly, would allow taps into new markets. This
low-end brand extension would also benefit from Volkswagen Group’s established
equity. In establishing differentiated family brand images (provide examples like
Volkswagen is family oriented, Porsche as sports, Bentley as high-class, etc), the
brand extension should also inherit a new brand name, as to establish itself from
other family brands.
d.How does it fit into a broader brand portfolio
Volkswagen group has a strategic manner of placing their products to tailor the
needs of every customer in mind. The Volkswagen Group corporate brand is
divided into the Automotive and Financial divisions, which separates the products
the Group produces and financial services affiliated with those products. The
strength that the Volkswagen Group has is that alongside offering variety of
products, each brand maintains its own character and operates as their own
independent entity on the market. Volkswagen Group’s broader brand portfolio
executes a line extension that appeals to a variety of markets. For example, Porsche
maintains a strong presence in the Sports Luxury category, Audi in the Luxury
category, and Volkswagen in the Low Consumption Small Car category. Since
Volkswagen Group has such a large brand portfolio they own the largest amount of
car companies such as Bentley, Audi, and Lamborghini. Their company is
recognized for taking modern German Engineering and producing vehicles that
were safe, reliable, and comfortable at an affordable price.
e.How well has it been expanded into new markets and channels
As Volkswagen Group maintains a prominent presence in the passenger car market
through their umbrella branding strategy, they’ve been able to expand into new
markets by following the latest trends and technology and implementing features
into their higher-end vehicles. For example, the implementation of Apple products
in the back seats of a Bentley incorporates a co-branding strategy where Bentley’s
overall equity is improved and further establishes them in the luxury car market.
Judging Volkswagen Group’s growth strategy, they tend to follow the current
market trends and make adjustments to their current products by following the
market trends such as making eco-friendly and hybrid vehicles for most of their
models, abiding by their company goal of offering “attractive, safe and
environmentally sound vehicles which can compete in an increasingly tough
market and set world standards in their respective class”.
f.How would you judge its growth strategy
Volkswagen Group is constantly following trends and by doing this they are
successful in the growth of their company and its overall strategy. They use their
most sold models and create a “revamped” newer version of classic models from
time to time. VW released the same models with a more refined look, enhanced
characteristics and include up to date technology, which attracte customers to
purchase this vehicle for the amenities and retail price. By being able to introduce
vehicles other than the Beetle that they are known for, selling vehicles for every
style whether it be commercial or sport or simply due to price and prestige,
Volkswagen has a vehicle marketing specific audiences in which they grow in
reputation with their prestigious and luxury brands such as Audi and Lamborghini
to their economical and compact cars such as the Jetta and Beetle.
Conclusions and recommendations
- VW has drifted away from its previous image of people`s car and hippie
culture and is focusing on its German design and engineering
- Pricing is not very affordable they need to drift closer to a more affordable
price of some of their models
- No entry-level range in portfolio (strong competition in this range)
- Still high associations of VW brand with classic „Beetle” and bus models
- Need to improve consumer`s perceptions of the brand after the Dieselgate
scandal
- It needs to launch a brand extension and a rebranding campaign that would
enable them to capture the intended meaning behind VW brand in a way that
strongly resonates with consumers – they need to follow more closely
consumer trends
- VW needs to strengthen the brand image (which might be confusing to
consumers) and also stick to their most powerful brand identity image – that
of a compact, durable and reliable car for everyday and for every person.
- The general consumer is unaware that the brand portfolio includes brands
like Skoda, Bugatti, Lamborghini etc
- Risk of cannibalization between similar products under the same umbrella
- Sponsor more events and find new ways of endorsement
Volkswagen has several opportunities for growing and maintaining brand equity:
- Expand lower price brands like SEAT or Skoda into new markets (China and
USA).(manufacturing a low cost vehicle (like Dacia) under the Volkswagen
brand, might add the risk of lowering the prestige of its current Volkswagen
brand cars. Using a co-branding strategy might prove most effective. For
example, Volkswagen could market a low price vehicle under the brand
SEAT by Volkswagen or Skoda since Americans and Chinese are unfamiliar
with those brands and would look more favorably on the car if it were
connected to the well-respected Volkswagen brand name. A lower price car
could also be successful in these markets by using the Volkswagen name to
advertise attributes not normally touted in cheaper cars, such as quality
German engineering and excellent safety features. Such a vertical brand
extension would allow Volkswagen to increase market share and cater to a
new market segment that has previously been under-utilized.)
- Create a point of difference with other car companies by emphasizing
green/environmentally-friendly technology in all of its cars. Volkswagen
cars are already some of the most fuel efficient and lowest in carbon
emissions, so Volkswagen should capitalize on this in advertising and
positioning. Demand for green technology in cars is increasing, and
Volkswagen can only benefit by shifting its brand offerings and image to
address this demand. Volkswagen has already begun to act on this growth
opportunity by increasing the number of environmentally friendly cars in its
offerings. These include the TDI Clean Diesel and hybrid versions of many
of their popular models. Their new slogan, “Think Blue,” refers to the
BlueMotion technology used in these models (“TDI diesel & hybrid cars,”
n.d.). By not using a variation of green in the slogan, they have set
themselves apart from other car brands’ advertising of their environmentally
friendly cars. In addition, they claim a point of parity by saying that their
eco-friendly cars are also high-performance. In other words, these cars
perform just as well as non-eco-friendly cars from other brands, but are also
good for the environment.
- Volkswagen can also expand into the electric car category.
- Volkswagen could bring back the Transporter in its original shape, more
commonly known as the classic VW van. Many customers, when asked to
recall the Volkswagen brand, think of this iconic vehicle, despite it not
having been in production for decades now. Volkswagen should utilize this
high level of recall, and benefit from the imagery associations of coolness,
nostalgia, and adventure the vehicle already enjoys. The Transporter would
essentially be a cash cow for Volkswagen; besides modernizing the engine,
few other modifications from the original would be needed, since customers
desire the van as it used to exist. This vehicle would especially appeal to
younger age segments, which view it as a great car for traveling and
spending time with friends. In addition, the van is already so well known
that minimal marketing would be needed to facilitate sales.
- Emphasize safety features to create a favorable brand response amongst
customers with families and expand brand meaning. Volkswagen is already
known for having quality cars in terms of engine performance, etc., and for
making practical cars. Touting safety features will be important in the future
not only to establish a point of parity with other carmakers who are seen as
safety-conscious brands (such as Volvo), but also to expand brand response
to include judgments of superiority in terms of safety features and feelings of
security. The market segment of adults with small children is highly coveted
in the car market, and Volkswagen has already begun to tailor their
advertising to reflect this focus. Recent ads have shown parents with babies
in their arms as they go car shopping, asking the car salesperson if their cars
are safe. Slogans such as “the safety of a Jetta” and “safety happens” suggest
that safety should be a key performance element of Volkswagen’s brand
meaning. Solidifying this brand meaning is important not only for family
cars like the Jetta, but also for the Tiguan and Touareg SUVs, since SUVs
have a reputation for rolling over. Volkswagen’s existing brand association
of “quality German engineering” will facilitate this brand meaning and
response expansion.
- Volkswagen Automotive Group greatest opportunity to enhance their
positioning would be advertising their pricing values on their Volkswagen
passenger car for the people who have lower income. They shouldn`t change
the positioning on their high-end cars. The element of a foreign car,
expensive, and hard to find makes their high-end car more desired and
prestigious than other luxury cars.
- work to get the VW brand back to where it was, in terms of consumer
perception.
The brand is still in recovery. According to YouGov’s BrandIndex, Volkswagen’s
Index score (a measure of a range of metrics including quality, value and
reputation) is up significantly since the height of the scandal.

On 1 September 2015, just before Dieselgate broke, the brand had a score of 25.3;
this then dropped significantly to a low of -1.6 on 18 December 2015. Since then,
its brand has been in recovery, and on 1 September had a score of 20.5, well up on
the lows but not yet back at its previous score.

This pattern is mirrored across other metrics including quality, value, and
reputation. However, in terms of purchase intent, VW has actually overtaken its
score prior to the scandal, with the measure now sitting at 8.1 compared to 7.3 on 1
September 2015.

VW’s sales have also been relatively strong despite the scandal. In 2018, it
managed to grow its UK market share to 8.42%, ahead of the 8.21% share it had in
2017 and making it the second biggest car marque in terms of value sales in the
UK.  to become number 2 in the market. It is also the second largest car
manufacturer globally, with a 7.38% market share.

Although the general consumer is unaware that the brand portfolio includes brands
like Skoda , Bugatti,and Lamborghini, the company ranks very high in the mind of
consumers thanks to the cognitive associations prompted by brand. However, there
is an interesting trend in volkswagen’s brand awareness dynamics — it tends to go
upwards in segment associations: VW is increasingly viewed as expensive car,
rather than “Volk’s”. 
Recently VW discovered that they have problems with their vision of a car and that
of a consumer. To put it in another way, they started to have problems with
aesthetics, utility and design aspects of their vehicles. However, problem was
resolved by implementing more consumer-based approach in designing new
vehicles.

“We cannot let up in our efforts and must realize further substantial
improvements."
Ralf BrandstätterChief Operating Officer
€9 billion for e-mobility

 By 2020, Volkswagen brand intends to improve marketing efficiency by


about 30 percent with a media budget remaining stable at €1.5 billion

 Digital share of media mix to grow to almost 50 percent by 2020 – in 2015


the share was about 25 percent

 Number of campaign elements to increase about five-fold – objective is


direct, personalized communication with customers

 Global agency network Volkswagen brand to be reduced from about 40


agencies to three lead agencies

 Jürgen Stackmann, Board Member for Sales: “The brand is to be managed in


a leaner, more centralized way.”

References:
https://www.marketingweek.com/volkswagen-brand-redesign/
https://www.volkswagenag.com/
2018 – VW Annual Report
https://rockstarsbm.wordpress.com/page/1/
https://www.slideshare.net/sachinsearch/volkswagen-marketing-ppt
https://www.mbaskool.com/brandguide/automobiles/1527-volkswagen.html
https://www.interbrand.com/best-brands/best-global-
brands/2018/ranking/volkswagen/branding-role-delivering-innovation-qa-
volkswagen/
https://www.bloomberg.com/news/articles/2019-07-12/vw-ford-alliance-
expansion-shows-automaker-mingling-here-to-stay

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