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Volkswagen AG history, profile and corporate video

Volkswagen AG is engaged in the manufacture of automobiles. It operates through following segments: Passenger Cars and Light Commercial Vehicles, Trucks and Buses, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment covers the development of vehicles and engines, the production and sale of passenger cars and light commercial vehicles, and the corresponding genuine parts business. The Trucks and Buses segment comprise of the development, production, and sale of trucks and buses, the corresponding genuine parts business and related services. The Power Engineering segment consists of the development and production of large-bore diesel engines, turbo compressors, industrial turbines and chemical reactor systems, as well as the production of gear units, propulsion components and testing systems. The Financial Services segment engages in dealer and customer financing, leasing, banking and insurance activities, as well as fleet management. The company was founded in May 28, 1937 and is headquartered in Wolfsburg, Germany.

“Volkswagen Group History

1937 to 1945

Volkswagen was founded on 28 May 1937 as the Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH (“Society for the preparation of the German People’s Car”, abbreviated to Gezuvor) by the National Socialist Deutsche Arbeitsfront(German Labour Front). The purpose of the company was to manufacture the Volkswagen car, originally referred to as the Porsche Type 60, then the Volkswagen Type 1, and commonly called the Volkswagen Beetle. This vehicle was designed by Ferdinand Porsche’s consulting firm, and the company was backed by the support of Adolf Hitler. On 16 September 1938, Gezuvor was renamed Volkswagenwerk GmbH (“Volkswagen Factory limited liability company”).

Shortly after the factory near Fallersleben was completed, World War II was started and the plant primarily manufactured the militaryKübelwagen (Porsche Type 82) and the related amphibious Schwimmwagen (Type 166), both of which were derived from the Volkswagen. Only a small number of Type 60 Volkswagens were made during this time period. The Fallersleben plant also manufactured the V-1 flying bomb, making the plant a major bombing target for the Allied forces. Much of the workforce at the plant was slave labor, primarily from eastern Europe.

1945 to 1970

After the war in Europe, in June 1945, Major Ivan Hirst of the British Army Royal Electrical and Mechanical Engineers (REME) took control of the bomb-shattered factory, and restarted production, pending the expected disposal of the plant as war reparations. However, no British car manufacturer was interested; “the vehicle does not meet the fundamental technical requirement of a motor-car … it is quite unattractive to the average buyer … To build the car commercially would be a completely uneconomic enterprise”. In 1948, the Ford Motor Company of USA was offered Volkswagen, but Ernest Breech, a Ford executive vice president said he didn’t think either the plant or the car was “worth a damn.” Breech later stated that he would’ve considered merging Ford of Germany and Volkswagen, but after the war, ownership of the company was in such dispute that nobody could possibly hope to be able to take it over. As part of the Industrial plans for Germany, large parts of German industry, including Volkswagen, were to be dismantled. Total German car production was set at a maximum of 10% of the 1936 car production numbers. The company survived by producing cars for the British Army, and in 1948, the British Government handed the company back over to the German state, where it was managed by former-Opel chief Heinrich Nordhoff.

Production of the Type 60 Volkswagen (re-designated Type 1) started slowly after the war due to the need to rebuild the plant and because of the lack of raw materials, but production grew rapidly in the 1950s and 1960s. The company began introducing new models based on the Type 1, all with the same basic air-cooled, rear-engine, rear-drive platform. These included the Volkswagen Type 2 in 1950, the Volkswagen Karmann Ghia in 1955, the Volkswagen Type 3 in 1961, the Volkswagen Type 4 in 1968, and the Volkswagen Type 181 in 1969.

In 1960, upon the flotation of part of the German federal government’s stake in the company on the German stock market, its name became Volkswagenwerk Aktiengesellschaft (usually abbreviated to Volkswagenwerk AG).

On 1 January 1965, Volkswagenwerk acquired Auto Union GmbH from its parent company Daimler-Benz. The new subsidiary went on to produce the first post-war Audi models, the Audi F103 series, shortly afterwards.

Another German manufacturer, NSU Motorenwerke AG, was merged into Auto Union on 26 August 1969, creating a new company, Audi NSU Auto Union AG (later renamed AUDI AG in 1985).

1970 to 2000

From the late 1970s to 1992, the acronym V.A.G was used by Volkswagen AG as a brand for group-wide activities, such as distribution and leasing. Contrary to popular belief, “V.A.G” had no official meaning, and was never the name of the Volkswagen Group.

On 30 September 1982, Volkswagenwerk made its first step expanding outside Germany by signing a co-operation agreement with the Spanish car manufacturer SEAT, S.A.

In order to reflect the company’s increasing global diversification from its headquarters and main plant (the Volkswagenwerk in Wolfsburg), on 4 July 1985, the company name was changed again – to Volkswagen Aktiengesellschaft (Volkswagen AG).

On 18 June 1986, Volkswagen AG acquired a 51% controlling stake in SEAT, making it the first non-German subsidiary of the Volkswagen Group. On 23 December the same year, it became the Spanish company’s major shareholder by increasing its share up to 75%.

In 1990 – after purchasing its entire equity – Volkswagen AG took over the full ownership of SEAT, making the company a wholly owned subsidiary, and on 28 March 1991 another step to the expansion of the group’s activities was made through the signing of a joint venture partnership agreement with Škoda automobilová a.s. of Czechoslovakia, accompanied with the acquisition of a 30% stake in the Czech car manufacturer, raised later on 19 December 1994 to 60.3% and the year after, on 11 December 1995, to 70% of its shares.

Three prestige automotive marques were added to the Volkswagen portfolio in 1998: Bentley, Lamborghini and Bugatti.

2000 to present

On 30 May 2000, Volkswagen AG, after having gradually raised its equity share, turned Škoda Auto into a wholly owned subsidiary.

From 2002 up to 2007, the Volkswagen Group’s automotive division was restructured so that two major Brand Groups with differentiated profile would be formed, the Audi Brand Group focused on more sporty values – consisted of Audi, SEAT and Lamborghini – and theVolkswagen Brand Group on the field of classic values – consisted of Volkswagen, Skoda, Bentley and Bugatti – with each Brand Group’s product vehicles and performance being respectively under the higher responsibility of Audi and Volkswagen brands.

Volkswagen Group revealed on 24 October 2009 that it had made an offer to acquire long-time partner and German niche automotive manufacturer Wilhelm Karmann GmbH out of bankruptcy protection. In November 2009, the Supervisory Board of Volkswagen AG approved the acquisition of assets of Karmann, and plan to restart vehicle production at their Osnabrück plant in 2012.

In December 2009, Volkswagen AG bought a 49.9% stake in Dr. Ing. h.c. F. Porsche AG (more commonly known as Porsche AG) in a first step towards an ‘integrated automotive group’ with Porsche. The merger of Volkswagen AG and Porsche SE was scheduled to take place during the course of 2011. On 8 September 2011, it was announced that the planned merger “cannot be implemented within the time frame provided for in the Comprehensive Agreement.” As reasons, unquantifiable legal risks, including a criminal probe into the holding’s former management team were given. Both parties “remain committed to the goal of creating an integrated automotive group with Porsche and are convinced that this will take place.” On 4 July 2012 Volkswagen group announced they would wrap up the remaining half of Porsche shares for 4.46 billion euros ($5.58 billion) on 1 August 2012 to avoid taxes of as much as 1.5 billion euros, which would have to be paid if the wrap up happened after 31 July 2014. Volkswagen AG purchased the remaining stake in Porsche AG equaling 100% of the shares in Porsche Zwischenholding GmbH, effectively becoming its parent company as of 1 August 2012.

Volkswagen AG completed the purchase of 19.9% of Suzuki Motor Corporation’s issued shares on 15 January 2010. Suzuki invested part of the amount received from Volkswagen into 1.49% percent of Volkswagen. In 2011, Suzuki filed a lawsuit at an arbitration court in London requesting that Volkswagen returns the 19.9% stake.

On 25 May 2010, it was announced that Volkswagen Group, through it subsidiary Lamborghini Holding S.p.A., had acquired a 90.1% stake in the Italian automotive design houseItaldesign Giugiaro. In only less than three months, the transaction had been completed making the Italian firm a member of the Volkswagen Group.”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “Volkswagen Group Careers