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Volkswagen’s Future: Das Old GM


In 2009 General Motors went into Chapter 11 bankruptcy. Upon coming out the other side, Pontiac was dead, Saturn was up for sale, Saab was for sale, and Hummer was practically already sold. GM had lost, killed, or abandoned four of its eight brands sold in North America. While fans of these brands wept (well, maybe not for Saturn or Hummer), GM was applauded for this radical change of policy: rebadging would no longer run rampant (allegedly), Saab would no longer spend like a mainstream brand while earning like a niche brand, the best and brightest would come together on the four core brands, and the General would be profitable once again! Many of the weeping fans even admit that this change is in GMs best interest, myself among them, but now I wonder, why on earth is Volkswagen copying pre-bankruptcy GM?


                At the Volkswagen Group, the total number of official brands (all of which are sold in Europe) is 10:

Audi,

Bentley,

Bugatti,

Lamborghini,

Porsche,

SEAT,

Skoda,

Scania (commercial trucks),

Volkswagen,

Volkswagen Commercial Vehicles,

And, on top of all this, theyre taken nearly a 20% stake in Suzuki. All this leaves me wondering why no one is shouting the end is near! for Volkswagen AG. Im worried that the lines between these brands are going to start blurring. In some cases they already have. Some have said that Porsche may meet the same fate as Pontiac, or even Oldsmobile. The Porsche Cayenne seems ridiculous to me, and many purists still havent forgiven Porsche for it. The Panamera seems like a fine idea to me, and so does a little rear-engined 4-cylinder, but some people are enraged even by these suggestions.

It certainly doesnt stop there, though. There are two brands that sell commercial vehicles, and at least two that sell exotics: Lambo and Bugatti, and, depending on who you ask, Porsche; theres also the Audi R8 to think about. Audi shares many platforms with Volkswagen, which shares platforms with Skoda and SEAT. The Touareg, Q7, and Cayenne are all directly related. With all these brands potentially stepping on each others toes, The Group decides to invest in yet another brand: Suzuki. Apparently another base brand was needed to balance the scales after The Groups sudden acquisition of Porsche.

Suzuki is new to the Group as I write this, so its integration (or assimilation, if you prefer) hasnt even begun yet. What we do know is that Suzuki is mainly a base brand, so theres no doubt that it will compete with Volkswagen itself, although the VW Group may try to squeeze it in between VW and Audi, or Between Skoda and VW, but I simply think this is too much. I bet that in the future this stake in Suzuki will be sold again, and passed around, similar to Mitsubishi. GM had a stake in Suzuki and now VW does. Mitsubishi used to be held partly by DaimlerChrysler, but that was sold or bought back or something. I dont really know what, and in most segments, Mitsubishi is nothing but an afterthought, as is often the case for small brands that get dumped by larger companies. 

And where does SEAT fit in? Most people I know (North Americans) havent even heard of it. I cant actually find its purpose written down anywhere, so I must rely on my own opinion. It seems to me that its strictly a style brand, since the bulk of its line-up is FWD. But I thought Audi was the style brand. Audi is a fashion leader after all, but with their Quattro AWD system theyre involved in the sports and luxury segment, which demands style in order to compete. Upon further investigation, a SEAT Ibiza base model sells for the same amount as the Volkswagen Polo its related to, so maybe SEAT is just an alternative style rather than a better one. But SEAT is its own brand, requiring money to run, and requiring safety and emissions certification. This costs millions of dollars, so you can bet that when times get tough for VW, SEAT will be one of the first to be sold or shut down.


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  1. I think that the investment VW made in Suzuki is likely to expand its market share in China and other emerging micro-car markets. The Suzuki Swift is a brilliant micro-car in Europe and it's shocking that Suzuki never brought it our shores here in the U.S. It would fit well on our streets of Chicago. The car is darn cute in person, with a sporty edge that's uncommon in the micro-car class. Side Note: Do I even have to mention that Suzuki has never fully capitalized on the positive connection it could make between its sport bikes and its cars? Maybe VW's popular advertising dollars can fix this too.
    The Seat brand is interesting. You don't see many Seat vehicles in Euro countries except for Spain, where they are widely popular. They feel like a VW and the interior uses the same quality materials as a VW but their body and interior designs are for the most part original. Their current styling is more edgy than the typical VW and I have to say that I would buy a VW over a Seat any day because of it. The Seat brand is currently built in an eastern European country (Turkey I think?) where it's less costly to build. In the future, I could see Seat going the way of the Monk seal since every one of its cars has nearly a direct replacement model in the VW brand.
     
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