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Volkswagen Santana (1981–present)  
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Volkswagen Sharan (1995–present) 
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Volkswagen Tiguan (2009–present)  
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Volkswagen (German pronunciation: [ˈfɔlksˌvaːɡn̩] , shortened to VW (German: [ˈfaʊ̯ˈveː]), is a German automaker founded on 28 May 1937 by the German Labour Front under Adolf Hitler and headquartered in Wolfsburg. It is the flagship marque of the Volkswagen Group, the largest automaker by worldwide sales in 2016.[1] The group's main market is in China, which delivers 40% of its sales and profits.[2][3]

Volkswagen literally in German means "folk's wagon" (so in basic terms "people's car"), and the company's current international advertising slogan is just "Volkswagen", a reference of the name's meaning.[4][5]

1932–1938: People's Car project[edit]

Model of Porsche Type 12 (Zündapp), Museum of Industrial Culture, Nuremberg

Volkswagen was originally established in 1932 by the German Labour Front (Deutsche Arbeitsfront) in Berlin.[6] In the early 1930s, the German auto industry was still largely composed of luxury models, and the average German could rarely afford anything more than a motorcycle. As a result, only one German out of 50 owned a car. Seeking a potential new market, some car makers began independent "people's car" projects – the Mercedes 170H, Adler AutoBahn, Steyr 55, and Hanomag 1.3L, among others.

The trend was not new, as Béla Barényi is credited with having conceived the basic design in the mid-1920s. Josef Ganz developed the Standard Superior (going as far as advertising it as the "German Volkswagen"). In Germany, the company Hanomag mass-produced the 2/10 PS "Kommissbrot", a small, cheap rear engined car, from 1925 to 1928.[7] Also, in Czechoslovakia, the Hans Ledwinka's penned Tatra T77, a very popular car amongst the German elite, was becoming smaller and more affordable at each revision. Ferdinand Porsche, a well-known designer for high-end vehicles and race cars, had been trying for years to get a manufacturer interested in a small car suitable for a family. He felt the small cars at the time were just stripped down big cars. Instead he built a car he called the "Volksauto" from the ground up in 1933, using many of the ideas floating around at the time and several of his own, putting together a car with an air-cooled rear engine, torsion bar suspension, and a "beetle" shape, the front hood rounded for better aerodynamics (necessary as it had a small engine).[8]

VW logo during the 1930s, initials surrounded by a stylized cogwheel and swastika wings[9]

In 1934, with many of the above projects still in development or early stages of production, Adolf Hitler became involved, ordering the production of a basic vehicle capable of transporting two adults and three children at 100 km/h (62 mph). He wanted all German citizens to have access to cars.[8] The "People's Car" would be available to citizens of the Third Reich through a savings plan at 990 Reichsmark($396 in 1930s U.S. dollars)—about the price of a small motorcycle (the average income being around 32 RM a week).[10][11]

Despite heavy lobbying in favour of one of the existing projects, it soon became apparent that private industry could not turn out a car for only 990 RM. Thus, Hitler chose to sponsor an all-new, state-owned factory using Ferdinand Porsche's design (with some of Hitler's design constraints, including an air-cooled engine so nothing could freeze). The intention was that ordinary Germans would buy the car by means of a savings scheme ("Fünf Mark die Woche musst du sparen, willst du im eigenen Wagen fahren" – "Five marks a week you must put aside, if you want to drive your own car"), which around 336,000 people eventually paid into.[12] However, the entire project was financially unsound, and only the Nazi party made it possible to provide funding.[13][Note 1]

Prototypes of the car called the "KdF-Wagen" (German: Kraft durch Freude – "Strength through Joy"), appeared from 1938 onwards (the first cars had been produced in Stuttgart). The car already had its distinctive round shape and air-cooled, flat-four, rear-mounted engine. The VW car was just one of many KdF programs, which included things such as tours and outings. The prefix Volks— ("People's") was not just applied to cars, but also to other products in Germany; the "Volksempfänger" radio receiver for instance. On 28 May 1937, Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH ("Company for the Preparation of the German Volkswagen Ltd."), or Gezuvor[14] for short, was established by the Deutsche Arbeitsfront in Berlin. More than a year later, on 16 September 1938, it was renamed to Volkswagenwerk GmbH.[15][16]

VW Type 82E

Erwin Komenda, the longstanding Auto Union chief designer, part of Ferdinand Porsche's hand-picked team,[8] developed the car body of the prototype, which was recognizably the Beetle known today. It was one of the first cars designed with the aid of a wind tunnel—a method used for German aircraft design since the early 1920s. The car designs were put through rigorous tests, and achieved a record-breaking million miles of testing before being deemed finished.

The construction of the new factory started in May 1938 in the new town of "Stadt des KdF-Wagens" (modern-day Wolfsburg), which had been purpose-built for the factory workers.[15] This factory had only produced a handful of cars by the time war started in 1939. None were actually delivered to any holder of the completed saving stamp books, though one Type 1 Cabriolet was presented to Hitler on 20 April 1944 (his 55th birthday).[15]

War changed production to military vehicles—the Type 82 Kübelwagen ("Bucket car") utility vehicle (VW's most common wartime model), and the amphibious Schwimmwagen—manufactured for German forces. As was common with much of the production in Nazi Germany during the war, slave labor was utilized in the Volkswagen plant, e.g. from Arbeitsdorf concentration camp. The company would admit in 1998 that it used 15,000 slaves during the war effort. German historians estimated that 80% of Volkswagen's wartime workforce was slave labor.[citation needed] Many of the slaves were reported to have been supplied from the concentration camps upon request from plant managers. A lawsuit was filed in 1998 by survivors for restitution for the forced labor.[17] Volkswagen would set up a voluntary restitution fund.[18]

Volkswagen factory

1945–1948: British Army intervention, unclear future[edit]

The company owes its post-war existence largely to one man, wartime British Army officer Major Ivan Hirst, REME. In April 1945, KdF-Stadt and its heavily bombed factory were captured by the Americans, and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factories were placed under the control of Saddleworth-born Hirst, by then a civilian Military Governor with the occupying forces. At first, one plan was to use it for military vehicle maintenance, and possibly dismantle and ship it to Britain. Since it had been used for military production, (though not of KdF-Wagens) and had been in Hirst's words, a "political animal" rather than a commercial enterprise[citation needed] – technically making it liable for destruction under the terms of the Potsdam Agreement – the equipment could have been salvaged as war reparations.[citation needed] Allied dismantling policy changed in late 1946 to mid-1947, though heavy industry continued to be dismantled until 1951.[citation needed]

One of the factory's wartime 'KdF-Wagen' cars had been taken to the factory for repairs and abandoned there. Hirst had it repainted green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000 cars. However, production facilities had been massively disrupted, there was a refugee crisis at and around the factory and some parts (such as carburretors) were unavailable. With striking humanity and great engineering and management ingenuity, Hirst and his German assistant Heinrich Nordhoff (who went on to run the Wolfsburg facility after military government ended in 1949) helped to stabilize the acute social situation while simultaneously re-establishing production. Hirst, for example, used his fine engineering experience to arrange the manufacture of carburretors, the original producers being effectively 'lost' in the Russian zone.[19] The first few hundred cars went to personnel from the occupying forces, and to the German Post Office. Some British Service personnel were allowed to take their Beetles back to the United Kingdom when they were demobilised.[20][better source needed]

In 1986, Hirst explained how it was commonly misunderstood that he had run Wolfsburg as a British Army major. The defeated German staff, he said, were initially sullen and unresponsive, having been conditioned by many years of Nazism and they were sometimes unresponsive to orders. At Nordhoff's suggestion, he sent back to England for his officer's uniform and from then on, had no difficulty in having his instructions followed. Hirst can be seen photographed at Wolfsburg in his uniform, although he was not actually a soldier at the time but a civilian member of the military government. The title of 'Major' was sometimes used by someone who had left the Army as a courtesy, but Hirst chose not to do so.[citation needed]

The post-war industrial plans for Germany set out rules that governed which industries Germany was allowed to retain. These rules set German car production at a maximum of 10% of 1936 car production.[21] By 1946, the factory produced 1,000 cars a month—a remarkable feat considering it was still in disrepair. Owing to roof and window damage, production had to stop when it rained, and the company had to barter new vehicles for steel for production.[citation needed]

The car and its town changed their Second World War-era names to "Volkswagen" and "Wolfsburg" respectively, and production increased. It was still unclear what was to become of the factory. It was offered to representatives from the American, Australian, British, and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "...is quite unattractive to the average motorcar buyer, is too ugly and too noisy ... If you think you're going to build cars in this place, you're a bloody fool, young man."[citation needed] The official report said "To build the car commercially would be a completely uneconomic enterprise."[22] In an ironic twist of fate, Volkswagen manufactured a locally built version of Rootes's Hillman Avenger in Argentina in the 1980s, long after Rootes had gone bankrupt at the hands of Chrysler in 1978—the Beetle outliving the Avenger by over 30 years.

Ford representatives were equally critical. In March 1948, the British offered the Volkswagen company to Ford, free of charge. Henry Ford II, the son of Edsel Ford, traveled to West Germany for discussions. Heinz Nordhoff was also present, and Ernest Breech, chairman of the board for Ford Motor Company. Henry Ford II looked to Ernest Breech for his opinion, and Breech said, "Mr. Ford, I don't think what we're being offered here is worth a dime!"[8] Ford passed on the offer, leaving Volkswagen to rebuild itself under Nordhoff's leadership.[citation needed]

1948–1961: Icon of post war West Germany[edit]1949 Volkswagen "split rear window" Sedan
Volkswagen Cabriolet (1953)
Volkswagen Type 2 (T1)
An original 1300 Deluxe, circa 1966.
In the later 1960s, as worldwide appetite for the Beetle finally began to diminish, a variety of successor designs were proposed and, in most cases, rejected by management.

From 1948, Volkswagen became an important element, symbolically and economically, of West German regeneration.[according to whom?] Heinrich Nordhoff (1899–1968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949, Major Hirst left the company—now re-formed as a trust controlled by the West German government and government of the State of Lower Saxony. The "Beetle" sedan or "peoples' car" Volkswagen is the Type 1. Apart from the introduction of the Volkswagen Type 2 commercial vehicle (van, pick-up and camper), and the VW Karmann Ghia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968.

Volkswagens were first exhibited and sold in the United States in 1949, but sold only two units in America that first year. On entry to the U.S. market, the VW was briefly sold as a Victory Wagon. Volkswagen of America was formed in April 1955 to standardise sales and service in the United States. Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955.

The UK's first official Volkswagen Importer, Colborne Garages of Ripley, Surrey, started with parts for the models brought home by soldiers returning from Germany.[20]

Canadian Motors, Limited brought in Canada's first shipment of Volkswagens on 10 July 1952 (shipping order 143075)[citation needed]. The order consisted of 12 vehicles, (3) model 11C, a black, green, and sandcolor (3) 11GS, a chestnut brown and two azure blue, (2) 24A-M51 in red, (1)21A in blue, (1) 23A in blue, (1) 22A beige color, and one ambulance[citation needed]. Volkswagens were seen in Canada for the first time at the Canadian National Exhibition in August 1952 and were accepted enthusiastically. (At least one Type 2 bus from this order still exists, and is currently in France undergoing restoration)[citation needed]. The first shipment for Volkswagen Canada reached Toronto in early December 1952. (At least one Type 1 from this first shipment still exists, and was driven on a nationwide tour for Volkswagen Canada's 60th year of business festivities in 2012)[citation needed].

By 1955, sales were on a basis that warranted the building of the Volkswagen plant on a 32-acre (13 ha) site on Scarboro's Golden Mile. To this, a 60,000-square-foot (5,600 m2) building with administration, showrooms, service, repairs and parts was built in 1957, with storage for $4,000,000 of parts[citation needed].

In 1959, VW started production at a plant near São Paulo in Brazil.[23] Volkswagen do Brasil was accused of spying on workers during the time of the military dictatorship in the 1970s and informing police on oppositional activities. In 1976, mass arrests occurred and some VW employees were tortured. In 1979, Brazilian VW workers traveled to Wolfsburg to inform the CEO in person. In 2015, activists and former VW employees in Brazil spoke out in public accused the company´s silence about persecution of its workers. In fall 2016, VW commissioned an expert review of the situation due end of 2017.[24]

On 22 August 1960, Volkswagenwerk GmbH was renamed to Volkswagenwerk AG.

Sales soared, throughout the 1960s, peaking at the end of the decade, thanks in part to the famous advertising campaigns by New York advertising agency Doyle, Dane Bernbach.[citation needed] Led by art director Helmut Krone, and copywriters Julian Koenig and Bob Levinson, Volkswagen advertisements became[when?] as popular as the car, using crisp layouts and witty copy to lure the younger, sophisticated consumers with whom the car became associated.[citation needed] Even though it was almost universally known as the Beetle (or the Bug), it was never officially labelled as such by the manufacturer, instead referred to as the Type 1.[citation needed]

Although the car was becoming outdated, during the 1960s and early 1970s, American exports, innovative advertising, and a growing reputation for reliability helped production figures surpass the levels of the previous record holder, the Ford Model T. On 17 February 1972 the 15,007,034th Beetle was sold. Volkswagen could now claim the world production record for the most-produced, single make of car in history. By 1973, total production was over 16 million.

To commemorate its passing the Ford Model T's record sales mark and its victories in the Baja 1000 Mexican races from 1967 to 1971, Volkswagen produced its first limited-edition Beetle. It was marketed as the "Baja Champion SE"[25] in the United States and the "Marathon" Superbeetle in the rest of the world. It featured unique "Marathon Blau" metallic blue paint, steel-pressed 10-spoke 15-inch (38 cm) magnesium-alloy wheels, a commemorative metal plate mounted on the glovebox and a certificate of authenticity presented to the original purchaser. Dealer-installed options for this limited-edition Superbeetle included the following: white stripes running the length of the rocker-panel, a special shifter knob, bumper overriders, tapered exhaust tips, fake walnut inserts in the dashboard (behind the steering wheel and the glovebox cover) as well as Bosch fog lights mounted on the front bumper.[citation needed]

1961–1973: Beetle to Golf[edit]

A 1963 VW Type 3 Notchback

The 1961 Type 1 Beetle had a 36 hp 1200cc four cylinder air-cooled flat-four opposed OHV engine made of aluminum alloy block and heads. By 1966, the Type 1 came with a 1300 engine. By 1967 the Type 1 had a 1500 engine, and 1600 in 1970. The air-cooled engine lost favor in the United States market with the advent of non-leaded gasoline and smog controls. These air-cooled engines were commonly tuned to be fuel rich in order to control engine over-heating, and this led to excessive carbon monoxide emissions. VW Production equipment was eventually moved to Mexico where vehicle emissions were not regulated. Beetles were popular on the USA West Coast where the limited-capacity cabin heating was less inconvenient. Beetles were popularized on the USA West Coast as beach buggies and dune buggies.

VW expanded its product line in 1961 with the introduction of four Type 3 models (Karmann Ghia, Notchback, Fastback, and Variant) based on the new Type 3 mechanical underpinnings. The name 'Squareback' was used in the United States for the Variant.

In 1969 the larger Type 4 (411 and 412) models were introduced. These differed substantially from previous vehicles, with the notable introduction of monocoque/unibody construction, the option of a fully automatic transmission, electronic fuel injection, and a sturdier powerplant.

Volkswagen added a "Super Beetle"[26] (the Type 131) to its lineup in 1971. The Type 131 differed from the standard Beetle in its use of a MacPherson strut front suspension instead of the usual torsion bars. The Super Beetle featured a new hooded, padded dash and curved windshield (from 1973 model year on up). Rack and pinion steering replaced recirculating ball steering gears in model year 1975 and up. The front of the car was stretched 2 inches (51 mm) to allow the spare tire to lie flat, and the combination of these two features increased the usable front luggage space.

In 1973, Volkswagen introduced the military-themed Type 181, or "Trekker" in Europe, "Thing" in America, recalling the wartime Type 82. The military version was produced for the NATO-era German Army during the Cold War years of 1970 to 1979. The U.S. Thing version only sold for two years, 1973 and 1974.Volkswagen Type 4 assembly linein Wolfsburg as of 1973
1969 VW Squareback (Type III)

In 1964, Volkswagen acquired Auto Union, and in 1969, NSU Motorenwerke AG (NSU). The former company owned the historic Audi brand, which had disappeared after the Second World War. VW ultimately merged Auto Union and NSU to create the modern Audi company, and would go on to develop it as its luxury vehicle marque. The purchase of Auto Union and NSU was a pivotal point in Volkswagen's history, as both companies yielded the technological expertise that proved necessary for VW to survive when demand for its air-cooled models went into decline.

By late 1972, Volkswagen had decided to cancel the nearly finished typ 266, a project for a mid-engined car to replace the Beetle, and to focus on front-wheel-drive, water-cooled cars. Rudolf Leiding, recently made head of Volkswagen, cited noise, heat, and servicing problems with the mid-engine layout, as well as the difficulty of making it a station wagon.[27]

Volkswagen Passat (1973–1977 model)

Volkswagen was in serious trouble by 1973.[28] The Type 3 and Type 4 models had sold in much smaller numbers than the Beetle and the NSU-based K70 also failed to woo buyers. Beetle sales had started to decline rapidly in European and North American markets. The company knew that Beetle production had to end, but faced a conundrum of how to replace it. VW's ownership of Audi/Auto Union proved beneficial. Its expertise in front-wheel drive, and water-cooled engines would help Volkswagen produce a credible Beetle successor. Audi influences paved the way for this new generation of Volkswagens: the Passat, Scirocco, Golf, and Polo.

First in the series was the Volkswagen Passat (Dasher in the US), introduced in 1973, a fastback version of the Audi 80, using many identical body and mechanical parts. Estate/wagon versions were available in many markets. In Europe, the estate/wagon version dominated in market share for many years.

In spring 1974, the Scirocco followed. The coupe was designed by Giorgetto Giugiaro. Based on the platform of the not yet released Golf, it was built at Karmann due to capacity constraints at Volkswagen.

The pivotal model emerged as the Volkswagen Golf in 1974, marketed in the United States and Canada as the Rabbit for the 1st generation (1975–1985) and 5th generation (2006–2009). Its angular styling was designed by the Italian Giorgetto Giugiaro). Its design followed trends for small family cars set by the 1959 Mini – the Golf had a transversely mounted, water-cooled engine in the front, driving the front wheels, and had a hatchback, a format that has dominated the market segment ever since. Beetle production at Wolfsburg ended upon the Golf's introduction. It continued in smaller numbers at other German factories (Hanover and Emden) until 1978, but mainstream production shifted to Brazil and Mexico.

In 1975, the Volkswagen Polo followed. It was a re-badged Audi 50, which was soon discontinued in 1978. The Polo became the base of the Volkswagen Derby, which was introduced 1977. The Derby was for all intents and purposes a three-box design of the Polo. After a second model generation, the Derby was discontinued in 1985, although the bodystyle lived on in the form of the polo classic/polo saloon until 1991.

Passat, Scirocco, Golf, and Polo shared many character defining features, as well as parts and engines. They built the basis for Volkswagen's turn-around.

1974–1990: Product line expansion[edit]

Volkswagen Polo (1975–1979 model)

While Volkswagen's range of cars soon became similar to that of other large European automakers, the Golf has been the mainstay of the Volkswagen lineup since its introduction,[when?] and the mechanical basis for several other cars of the company. There have been seven generations of the Volkswagen Golf, the first of which was produced from the summer of 1974 until the autumn of 1983 (sold as the Rabbit in the United States and Canada and as the Caribe in Latin America). Its chassis also spawned the Volkswagen Scirocco sport coupe, Volkswagen Jetta saloon/sedan, Volkswagen Golf Cabriolet convertible, and Volkswagen Caddy pick-up. North American production of the Rabbit commenced at the Volkswagen Westmoreland Assembly Plant near New Stanton, Pennsylvania in 1978. It would be produced in the United States as the Rabbit until the spring of 1984.[citation needed]The second-generation Golf hatchback/Jetta sedan ran from October 1983 until the autumn of 1991, and a North American version produced at Westmoreland Assembly went on sale at the start of the 1985 model year. The production numbers of the first-generation Golf has continued to grow annually in South Africa as the Citi Golf, with only minor modifications to the interior, engine and chassis, using tooling relocated from the New Stanton, Pennsylvania plant when that site began to build the Second Generation car.[citation needed]

In the 1980s, Volkswagen's sales in the United States and Canada fell dramatically, despite the success of models like the Golf elsewhere. The Japanese and the Americans were able to compete with similar products at lower prices. Sales in the United States were 293,595 in 1980, but by 1984 they were down to 177,709.[29] The introduction of the second-generation Golf, GTI and Jetta models helped Volkswagen briefly in North America. Motor Trendnamed the GTI its Car of the Year for 1985, and Volkswagen rose in the J.D. Power buyer satisfaction ratings to eighth place in 1985, up from 22nd a year earlier.[30] VW's American sales broke 200,000 in 1985 and 1986 before resuming the downward trend from earlier in the decade. Chairman Carl Hahn decided to expand the company elsewhere (mostly in developing countries), and the New Stanton, Pennsylvania factory closed on 14 July 1988.[31]Meanwhile, four years after signing a cooperation agreement with the Spanish car maker SEAT in 1982, Hahn expanded the company by purchasing a majority share of SEAT up to 75% by the end of 1986, which VW bought outright in 1990.[32] On 4 July 1985, Volkswagenwerk AG was renamed to Volkswagen AG.

Volkswagen entered the supermini market in 1975 with the Volkswagen Polo, a stylish and spacious three-door hatchback designed by Bertone. It was a strong seller in West Germany and most of the rest of Western Europe, being one of the first foreign small cars to prove popular in Britain. It had started out in 1974 as the Audi 50, which was only available in certain markets and was less popular. The Polo entered a market sector already being dominated by the Fiat 127 and Renault 5, and which before long would also include the Austin Metro and Ford Fiesta.[citation needed]

In 1981, the second-generation Polo launched and sold as a hatchback and "coupe" (with the hatchback resembling a small estate car and the coupe being similar to a conventional hatchback), was an even greater success for Volkswagen.[citation needed] Its practicality, despite the lack of a five-door version, helped ensure even stronger sales than its predecessor, and it continued to sell well after a makeover in 1990, finally being replaced by an all-new version in 1994.[citation needed] Also arriving in 1981 were the second generation of the larger Passat and a second generation of the Volkswagen Scirocco coupe. The original Scirocco had been launched in 1974 to compete with affordable four-seater coupes like the Ford Capri.[citation needed]

In 1983 the MK2 Golf was launched. At the beginning of 1988, the third generation Passat was the next major car launch and Volkswagen did not produce a hatchback version of this Passat, despite the rising popularity of the hatchback bodystyle throughout Europe.[citation needed] Just after launching the B3 Passat, Volkswagen launched the Corrado, replacement for the Scirocco, although the Scirocco remained in production until 1992.[citation needed]

1991–1999[edit]

Volkswagen Golf, in North American form

In 1991, Volkswagen launched the third-generation Golf, which was European Car of the Year for 1992. The Golf Mk3 and Jetta arrived in North America in 1993. The sedan version of the Golf was badged Vento in Europe, but remained Jetta in the United States. The Scirocco and the later Corrado were both Golf-based coupés.

The Volkswagen New Beetle

In 1994, Volkswagen unveiled the J Mays-designed Concept One, a "retro"-themed concept car with a resemblance to the original Beetle, based on the platform of the Polo. Due to a positive response to the concept, a production version was developed as the New Beetle, based on the Golf's larger platform.[33]

In 1995 the Sharan was launched in Europe, the result of a joint venture with Ford, which also resulted in the Ford Galaxy and SEAT Alhambra.[34]

The company's evolution of its model range was continued with the Golf Mk4, introduced at the end of 1997 (North America in 1999), its chassis spawned a host of other cars within the Volkswagen Group; the Volkswagen Bora (the sedan known as the Jetta in the United States), SEAT Toledo, SEAT León, Audi A3, Audi TT, and Škoda Octavia. Other main models during the decade include the Polo, a smaller car than the Golf, and the larger Passat for the segment above the Golf.

In 1998 the company launched the new Lupo city car. In 1999 they announced the first "3-litre" car, a lightweight version of the Lupo that could travel 100 km with only 3-litres of diesel—making it the world's most fuel efficient car at the time.[35]

2000–present: Further expansion[edit]

The fifth generation Volkswagen Jetta

Volkswagen began introducing an array of new models after Bernd Pischetsrieder became Volkswagen Group CEO (responsible for all Group brands) in 2002. The sixth-generation VW Golfwas launched in 2008, came runner-up to the Opel/Vauxhall Insignia in the 2009 European Car of the Year, and has spawned several cousins: VW Jetta, VW Scirocco, SEAT León, SEAT Toledo, Škoda Octavia and Audi A3 hatchback ranges, as well as a new mini-MPV, the SEAT Altea. The GTI, a "hot hatch" performance version of the Golf, boasts a 2.0 L Turbocharged Fuel Stratified Injection (FSI) direct injection engine. VW began marketing the Golf under the Rabbit name once again in the U.S. and Canada in 2006.

The sixth-generation Passat and the fifth-generation Jetta both debuted in 2005, and Volkswagen announced plans to expand its lineup further by bringing back the Scirocco by 2008. Other models in Wolfgang Bernhard's (Volkswagen brand CEO) "product offensive" include the Tiguan mid-sized SUV in 2008 and a Passat Coupé. In November 2006 Bernd Pischetsrieder announced his resignation as Volkswagen Group CEO, and was replaced by Audi worldwide CEO Martin Winterkorn at the beginning of 2007.

The third generation Volkswagen Scirocco

Volkswagen in 2005 maintained North American sales of 224,195. Momentum continued for fiscal 2006, as Volkswagen's North American sales for the year were 235,140 vehicles, a 4.9 percent increase over 2005, despite a slump in domestic North American manufacturer's sales. In conjunction with the introduction of new models, production location of Volkswagen vehicles also underwent great change. The 2007 Eos, a hardtop convertible, is produced in a new facility in Portugal. All Golfs/Rabbits and GTIs as of 2006 are manufactured in Wolfsburg, Germany, rather than Puebla, Mexico, where Golfs and GTIs for the North American market were produced from 1989 to 1998, and the Brazilian factory in Curitiba, where Golfs and GTIs were produced from 1999 to 2006 (the Jetta has been primarily manufactured in Mexico since 1989). Volkswagen is also in the process of reconfiguring an automotive assembly plant in Belgium. The new models and investments in manufacturing improvements were immediately noticed by automotive critics. Favorable reviews for Volkswagen's newest cars include the GTI being named by Consumer Reports as the top sporty car under $25,000, one of Car and Driver magazine's "10 Best" for 2007, Automobile Magazine's 2007 Car of the Year, as well as a 2008 Motor Trend comparison ranking the mid-size Passat first in its class.

The seventh generation Volkswagen Golf

Volkswagen partnered with Daimler AG and other companies to market the BlueTec clean diesel technology on cars and trucks from Mercedes-Benz, Volkswagen, and other companies and brands. According to the United States Environmental Protection Agency, four of the ten most fuel-efficient vehicles available for sale in the United States are powered by Volkswagen diesel engines.[36] Volkswagen has offered a number of its vehicles with a TDI (Turbocharged Direct Injection) engine, which lends class-leading fuel economy to several models. They were a three-way tie for 8th (TDI Beetle, TDI Golf, TDI Jetta) and ninth, the TDI Jetta Wagon. In addition, all Volkswagen TDI diesel engines produced from 1996 to 2006 can be driven on 100% biodiesel fuel.[citation needed] For the 2007 model year, however, strict U.S. government emissions regulations have forced Volkswagen to drop most diesels from their U.S. engine lineup, but a new lineup of diesel engines compatible to U.S. standards returned to the American market starting with Model Year 2009. These post-2009 Clean Diesel engines are limited to running on 5% (B5) biodiesel only to maintain Volkswagen's warranty. Volkswagen long resisted adding a SUV to its lineup, but relented with the introduction of the Touareg, made in partnership with Porsche, while they worked on the Porsche Cayenne and later the Audi Q7. Though acclaimed as a fine handling vehicle, the Touareg has been a modest seller at best, and it has been criticised by auto reviewers for its absence of a third-row seat, the relatively poor fuel economy, and the high vehicle mass. Volkswagen set plans to add a compact SUV with styling influences from the "Concept A" concept vehicle introduced at the 2006 Geneva Auto Show, and on 20 July 2006, Volkswagen announced that the new vehicle, called the Tiguan.

Since the discontinuance of the T4 in 2003 and decision not to export the T5 to the United States, Volkswagen, coincidentally, lacked a van for its North American lineup. To remedy this, Volkswagen launched the Volkswagen Routan, a badge-engineered Dodge Grand Caravan made for the American and Canadian markets, in 2008.

In September 2006, Volkswagen began offering the City Golf and City Jetta only for the Canadian market. Both models were originally the Mk4 Golf and Jetta but were later replaced with the Brazilian versions of the Golf Mk4 and Bora. Volkswagen's introduction of such models is seen as a test of the market for a subcompact and, if successful, may be the beginnings of a thriving subcompact market for Volkswagen.

The Volkswagen Passat (3C)

In May 2011, Volkswagen completed Chattanooga Assembly in Tennessee. The facility has produced Volkswagen cars and SUVs specifically designed for North American markets, beginning with the Passat B7 in 2011. The company recently announced plans to expand further by investing $900 million to add floor space to the factory.[37]

The VW XL1 began a limited production run in 2013. The XL1 is a lightweight and fuel efficient two-person vehicle (only 795 kg).

The Volkswagen Atlas (a large crossover SUV) began production in late 2016, and aimed to help end several years of losses for Volkswagen in the United States, the world's second-largest auto market.[38][39]

On 14 September 2016, Volkswagen announced its partnership with three Israeli cybersecurity experts to create a new company, Cymotive, dedicated to automotive security.[40]

Volkswagen calls their shift towards electric vehicles "Transform 2025+". As part of the strategy, Volkswagen aims to launch more than 30 electric vehicles until 2025, and is anticipating yearly sales of 2 to 3 million electric Volkswagen cars by 2025, which would make up 20 to 25 percent of their total yearly sales volume.[41] In September 2017, CEO Matthias Mueller announced plans to have electric version of all of VW's 300 automotive models by 2030. The company vows to spend 20 billion euros by 2030 to roll out the cars and designated another 50 billion euros to buy the batteries needed to power the vehicles.[42]

In April 2018, Volkswagen has finally whipped the covers of its first all-electric race car, the I.D. R Pikes Peak, which has been built to conquer the road race of the same name. The I.D. R Pikes Peak was unveiled in Alès, France, and should be ready to roll in two short months. It will be powered by twin engines, though this time around they'll be strictly electric. With a lithium-ion battery system on board, the car generates 680 hp and 479 lb-ft of torque.[43]

In September 2018, Volkswagen announced to end the production of its iconic compact car, Beetle, by 2019. Volkswagen hinted at taking a leap towards the future by bringing in electric cars.[44]

Operations[edit]

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Volkswagen is the founding and namesake member of the Volkswagen Group, a large international corporation in charge of multiple car and truck brands, including Audi, SEAT, Porsche, Lamborghini, Bentley, Bugatti, Scania, MAN, and Škoda. Volkswagen Group's global headquarters are located in Volkswagen's historic home of Wolfsburg, Germany.[citation needed][45]

Volkswagen Group, as a unit, is Europe's largest automaker.[46] For a long time, Volkswagen has had a market share over 20 percent.[47]

In 2010, Volkswagen posted record sales of 6.29 million vehicles, with its global market share at 11.4%.[48] In 2008, Volkswagen became the third largest automaker in the world,[49] and, as of 2012, Volkswagen is the second largest manufacturer worldwide.[46]Volkswagen has aimed to double its US market share from 2% to 4% in 2014,[50] and is aiming to become, sustainably, the world's largest car maker by 2018.[51][52] Volkswagen Group's core markets include Germany and China.[53]

Worldwide presence[edit]

Volkswagen has factories in many parts of the world, manufacturing or assembling vehicles for local markets. In addition to plants in Germany, Volkswagen has manufacturing or assembly facilities in Mexico, the United States, Slovakia, China, India, Indonesia,[54] Russia, Malaysia, Brazil, Argentina, Portugal, Spain, Poland, the Czech Republic, Bosnia and Herzegovina, Kenya and South Africa. In 2011, Volkswagen was named in the top 25 largest companies in the world by the Forbes Global 2000.[55][56]

Volkswagen is setting up a new factory in West Java, Indonesia, which started construction in mid-2013.[57] The investment into the new plant, which will produce large transporters and multivans, is valued at $140 million.

As of May 2014, Volkswagen is planning to start assembling certain engines in India to increase localisation from 70% to 90%.[58]

In January 2016, Volkswagen announced launching a new factory in Algeria during a summit between Angela Merkel and Algerian prime minister Abdelmalek Sellal.[59]. Factory was launched during 2017 in Relizane, producing Volkswagen Golf VII, Volkswagen Polo, Volkswagen Caddy, Seat Ibiza and Skoda Octavia cars.

Work–life balance[edit]

Volkswagen agreed in December 2011 to implement a rule passed by the company's works council aimed at improving work–life balance by restricting company email functionality on the firm's BlackBerry smartphones from 6:30 pm to 7:30 am. The change was a response to employees' complaints about high stress levels at work and the expectation that employees would immediately answer after-hours email from home. About 1,150 of Volkswagen's more than 190,000 employees are affected by the email restriction.[60][61]

Relationship with Porsche and the Volkswagen Law[edit]

Volkswagen has always had a close relationship with Porsche, the Zuffenhausen-based sports car manufacturer founded in 1931 by Ferdinand Porsche, the original Volkswagen designer and Volkswagen company co-founder, hired by Adolf Hitler for the project. The first Porsche car, the Porsche 64 of 1938, used many components from the Volkswagen Beetle. The 1948 Porsche 356 continued using many Volkswagen components, including a tuned engine, gearbox and suspension.

The two companies continued their collaboration in 1969 to make the VW-Porsche 914 and Porsche 914-6. (The 914-6 had a 6-cylinder Porsche engine, and the standard 914 had a Volkswagen engine.) Volkswagen and Porsche would collaborate again in 1976 on the Porsche 912-E (USA only) and the Porsche 924, which used many Audi components and was built at Audi's Neckarsulm facilities. The 924 was originally designated for AUDI. Most Porsche 944 models were built there, although they used far fewer VW components.

The Porsche Cayenne, introduced in 2002, shares its entire chassis with the Volkswagen Touareg and Audi Q7, and is built at the same Volkswagen factory in Bratislava that the other SUV's are built.

In September 2005, Porsche announced it would increase its 5% stake in Volkswagen to 20% at a cost of €3 billion, with the intention that the combined stakes of Porsche and the government of Lower Saxony would ensure that any hostile takeover by foreign investors would be impossible.[62] Speculated suitors included DaimlerChrysler, BMW, and Renault. In July 2006, Porsche increased their ownership again to 25.1%.

On 4 March 2005, the European Commission brought an action against the Federal Republic of Germany before the European Court of Justice, claiming that the Volkswagen Law, which prevents any shareholder in Volkswagen from executing more than 20% of the total voting rights in the firm, was illegally restricting the flow of capital in Europe.[63] On 13 February 2007, Advocate General Dámaso Ruiz-Jarabo Colomer submitted an opinion to the court in support of the action.[64] This again opened the possibility of a hostile takeover of VW and so on 26 March of the same year Porsche took its holding of Volkswagen shares to 30.9%. Porsche formally announced in a press statement that it did not intend to take over Volkswagen, but intended the move to avoid a competitor's taking a large stake and to stop hedge funds from dismantling VW.[65] As expected, on 22 October 2007, the European Court of Justice ruled in agreement with Ruiz-Jarabo and the law was struck down.[66][67] In October 2007, the European Court of Justice ruled that the VW law was illegal[68]because it was protectionist. At that time, Porsche held 31% of VW shares – although a smaller proportion of voting rights, due to the Volkswagen Law – and there had been speculation that Porsche would be interested in taking over VW if the law did not stand in its way. The court also prevented the government from appointing Volkswagen board members.[69] The German government then rewrote the Volkswagen law, only to be sued again.[70][71][72] In October 2013, the EU Court of Justice in Luxembourg ruled that the rewritten Volkswagen law "complied in full" with EU rules.[73]

On 26 October 2008, Porsche revealed its plan to assume control of VW. As of that day, it held 42.6% of Volkswagen's ordinary shares and stock options on another 31.5%. Combined with the state of Lower Saxony's 20.1% stake, this left only 5.8% of shares on the market—mostly with index funds that could not legally sell.[74] Hedge funds desperate to cover their short positions forced Volkswagen stock above one thousand euros per share, briefly making it the world's largest company by market capitalisation on 28 October 2008.[75] By January 2009, Porsche had a 50.76% holding in Volkswagen AG, although the "Volkswagen Law" prevented it from taking control of the company.[76]

On 6 May 2009, the two companies decided to join together, in a merger.

On 13 August, Volkswagen Aktiengesellschaft's Supervisory Board signed the agreement to create an integrated automotive group with Porsche led by Volkswagen. The initial decision was for Volkswagen to take a 42.0% stake in Porsche AG by the end of 2009, and it would also see the family shareholders selling the automobile trading business of Porsche Holding Salzburg to Volkswagen.[77] In October 2009 however, Volkswagen announced that its percentage in Porsche would be 49.9% for a cost of €3.9 billion (the 42.0% deal would have cost €3.3 billion).[78] On 1 March 2011, Volkswagen has finalized the purchase of Porsche Holding Salzburg (PHS), Austria's leading specialty automobile distributor, for €3.3 billion ($4.55 billion).[79]

AutoMuseum[edit]

Since 1985, Volkswagen has run the Volkswagen AutoMuseum in Wolfsburg, a museum dedicated specifically to the history of Volkswagen.[80] In addition to visiting exhibits in person, owners of vintage Volkswagens anywhere in the world may order what the museum refers to as a "Birth Certificate" for a set fee of €50—this formal "Zertifikat" indicates basic information known at the time of manufacture (colors, options, port of destination, etc.).[81]

Global sales figures, 2006–2017[edit]

Year Global sales (in millions)[82]
2006 5.7
2007 6.2
2008 6.3
2009 6.3
2010 7.3
2011 8.4
2012 9.3
2013 9.7
2014 10.2
2015 10.0
2016 10.3
2017 10.7[83]


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