The topic surrounding the future of Volkswagen, an iconic megalith car manufacturer, stirs some level of controversy. While most vehicle manufacturers are showcasing incredibly innovative developments in smart car tech, consumers shine the spotlight on VW in anticipation in hopes of impressive innovations. Visiting a Volkswagen dealership Utah will surely spark interest for the average car enthusiast as the iconic brand has maintained its legacy well over the years.
Impressively, this previous year, the company outsold all of its competitors. Yet, it has a much lower valuation than the legendary electric car maker Tesla, as well as long term market rival, Toyota. So, what exactly is happening behind closed doors at VW, what is their strategy for the future, and how are they working to recover from the emissions scandal? While the scandal also known as the Dieselgate scandal stirred controversy back in 2015 after the United States of America issued a concerning notice of violation regarding the clean air act, VW has since been propelled into an entirely new landscape of standards.
The EU And Emissions
Europe is currently undergoing a process of adopting increasingly strict emissions policies as the world moves persistently towards a greener and cleaner future. This means that all eyes are on VW in anticipation of the upcoming brand modifications. While the company was under such levels of scrutiny, the car manufacturer has little choice but to take extreme measures to meet said new policies. It seems this may mean that the company may unload some of its performance brands.
If you were not aware, VW owns iconic vehicle brands such as the luxury Bugatti, Lamborghini and performance motorcycle brand, Ducati. Whilst these are valuable brands in their own right, VW’s business model may mean that they no longer bring justifiable value to VW’s operations. However, there is reason to believe the manufacturer will change its pace to meet the new green policies.
When Emissions Mattered Less
In recent years, the global climate crisis has become more and more of a concern for citizens and governments around the world. As a result, numerous governments have implemented policies and new standards for businesses in hopes of achieving a greener future. While this gradual change has thrown many companies under the bus, others have been forced to change direction in terms of innovation aimed at eco-friendly factors. The automobile industry in specific is among businesses who are now required to identify carbon footprint impacts and make necessary adjustments.
Before the global drive to decrease vehicle emissions was a concern, car manufacturers generally utilized their performance brands as a sort of testing ground for R&D. Performance technology often trickled down to the far more lucrative general consumer markets. With the emphasis on emissions, performance research and development has been superseded by research into efficiency.
For a company like VW, holding on to these brands no longer makes practical sense. This has been confirmed by recent anonymous leaks that suggest that VW is in talks with electric supercar manufacturer Rimac for the sale of the iconic Bugatti brand. Bloomberg reported that the company is considering selling Lamborghini off as well. These reports have caused quite a controversial stir in the markets for consumers.
The Rest Of The VW Portfolio
There’s no doubt that VW has remained an iconic brand in the automobile industry for decades. With legendary vehicles such as the VW polo and older models such as the VW City Golf taking over the market on an international scale in years gone by, VW has become known as a reigning brand. However, the climate crisis has changed the landscape for manufacturers in several impactful ways. VW in specific will need to make monumental vehicle manufacturing alterations to conform to new necessary standards in terms of fuel efficiency as well as emissions.
What is certain is that the multitude of reports on the matter suggest that VW is undoubtedly going to be taking extreme measures when it comes to its portfolio of brands. There are other brands under the VW umbrella that seem safe for now. Bently and Porsche seem to be off the chopping block for the moment, whilst Audi remains an integral part of VW’s core business.
In taking these measures, the company aims to increase its market value of $120b to $330b. It seems unlikely that merely selling off performance brands is the sole strategy to reach this goal. It is therefore going to be rather interesting to see what the company does with its primary brands, VW and Audi.
What Does This Mean For The Consumer
It is always a difficult question to answer, but informed speculation suggests that the sale of its top performance brands suggests a massive shift towards a focus on fuel efficiency and, possibly electric power. The fact that the company is holding on to Porsche may indicate a move towards performance electric. There’s absolutely no doubt that consumers will be enticed by the idea of performance hybrid and electric vehicles as to date, such category of automobiles lack the characteristic altogether. Even though Tesla maintains something of a futuristic luxury factor, fuel efficiency and performance are lacking elements of the brand; leaving ample opportunity for existing iconic brands to change pace and appeal to the greener market.
This is exciting news for the regular consumer. At the moment Porsche is the only real competitor to Tesla’s performance division, and the prospect of a trickle-down effect suggests that VW and Audi may see some of their performance targeted mass production vehicles, like the VW Golf, released in electric options shortly. This strategy may then justify the ambitious goals the company has regarding market value.
Therefore, there is hardly doubt that the future of several vehicle manufacturer’s will include the emergence of exceptional hybrid vehicles. What’s more, there is also reason to believe that luxury hybrid and electric cars will be available in a vast selective range, enhancing the general affordability of eco-friendly automobiles.