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Volkswagen (German: [ˈfɔlksˌvaːɡn̩] (About this soundlisten); English: /ˈvksvɑːɡən, ˈvɒlkswɑːɡən, -wæɡən, ˈfɒlksvɑːɡən/), shortened to VW (German: [faʊ̯ ˈveː] (About this soundlisten)), is a German automaker founded in 1937 by the German Labour Front, known for the iconic Beetle and headquartered in Wolfsburg. It is the flagship brand of the Volkswagen Group, the largest automaker by worldwide sales in 2016 and 2017.[2] The group's biggest market is in China, which delivers 40% of its sales and profits.[3][4]

The German term Volk translates to "people", thus Volkswagen translates to "people's car". The company's current international advertising slogan is just "Volkswagen", referencing the name's meaning.[5][6]

History

1932–1938: People's Car project

Model of Volk translates to "people", thus Volkswagen translates to "people's car". The company's current international advertising slogan is just "Volkswagen", referencing the name's meaning.[5][6]

Volkswagen was established in 1937 by the German Labour Front (Deutsche Arbeitsfront) in Berlin.[7] In the early 1930s, cars were a luxury – most Germans could afford nothing more elaborate than a motorcycle. 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, BMW 3/15, 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.[8] 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 built a car named the "Volksauto" from the ground up in 1933, using many popular ideas 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).[9]

VW logo during the 1930s, initials surrounded by a stylized cogwheel and a spinning propeller that looked like a swastika[10]

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.[9] The "People's Car" would be available to citizens of the Third Reich through a savings plan at 990 Reichsmarks (US$396 in 1938 dollars)—about the price of a small motorcycle (the average income being around 32 RM a week).[11][12]

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 in your own car you want to ride"), which around 336,000 people eventually paid into.[13] However, the entire project was financially unsound, and only the Nazi party made it possible to provide funding.[14][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[15] 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.[16][17]

VW Type 82E

Erwin Komenda, the longstanding Auto Union chief designer, part of Ferdinand Porsche's hand-picked team,[9] 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.[16] 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).[16]

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. One of the first foreigners to drive a Volkswagen was the American war correspondent Ernie Pyle, who had the use of a captured Volkswagen for a few days after the Allied victory in Tunisia in May 1943.[18] 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.[19] Volkswagen would set up a voluntary restitution fund.[20]

1945–1948: British Army intervention, unclear future

[61] For a long time, Volkswagen has had a market share over 20 percent.[62]

In 2010, Volkswagen posted record sales of 6.29 million vehicles, with its global market share at 11.4%.[63] In 2008, Volkswagen became the third-largest automaker in the world,[64] and, as of 2016, Volkswagen was the second largest manufacturer worldwide.[65] With strong headwinds reported in 2018, predominantly from trade tariffs and new emission standards, Volkswagen Group ended 2018 with record deliveries of 10.8 million vehicles.[66] Volkswagen Group's core markets include Germany and China.[67]

In July 2019, Volkswagen invested $2.6 billion in Argo AI, a startup focused on developing self-driving vehicles.[68]

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, 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.[69][70]

As of May 2014, Volkswagen is planning to start assembling certain engines in India to increase localisation from 70% to 90%.[71]

In January 2016, Volkswagen announced launching a new factory in Algeria during a summit between Angela Merkel and Algerian prime minister Abdelmalek Sellal.[72] This new factory was launched in Relizane, producing Volkswagen Golf VII, Volkswagen Polo, Volkswagen Caddy, SEAT Ibiza and Škoda Octavia cars.

[71]

In January 2016, Volkswagen announced launching a new factory in Algeria during a summit between Angela Merkel and Algerian prime minister Abdelmalek Sellal.[72] This new factory was launched in Relizane, producing Volkswagen Golf VII, Volkswagen Polo, Volkswagen Caddy, SEAT Ibiza and Škoda Octavia cars.

Volkswagen agreed in December 2011 to implement a rule passed by the company's works council aimed at improving work–life balance and avoiding burnout by restricting company email functionality on the firm's BlackBerry smartphones to working periods and the half-hour before and after working periods. About 1,150 of Volkswagen's more than 190,000 employees in Germany were affected by the email restriction.[73]

Relationship with Porsche and the Volkswagen Law

The Volkswagen brand produces various models which consists of global products and regional products, specifically for large markets including Europe, China and Latin America. Volkswagen AG annual report in 2019 reported that the best-selling model under the Volkswagen brand globally is the Tiguan, followed by the B-segment range of Polo, Virtus, Vento and Ameo, and Golf.[95]

Hatchbacks

Volkswagen has been one of the leading manufacturer in terms of hatchback production, which traditionally has been a popular segment in Europe.[96][97] The brand offered a range of hatchbacks from A-segment, B-segment, and C-segment. The Golf traditionally has been the strongest selling vehicle for the brand in Europe, followed by the smaller Polo which apart from the European market also has a stronghold in emerging markets. Sales for the hatchback category has slowed down due to the rise of the SUV segment.[98][99]

SUVs/crossovers

[96][97] The brand offered a range of hatchbacks from A-segment, B-segment, and C-segment. The Golf traditionally has been the strongest selling vehicle for the brand in Europe, followed by the smaller Polo which apart from the European market also has a stronghold in emerging markets. Sales for the hatchback category has slowed down due to the rise of the SUV segment.[98][99]

SUVs/crossovers

Chinese market

[103] Volkswagen also expects SUVs to lead the ID. family, its future electric vehicle range of models.[104]

The SUV expansion has claimed casualties in the MPV segment, which saw the Sharan mid-size MPV being phased out in 2020.[105]

Volkswagen is a market leader in China, which is the largest single automotive market in the world. In 2019, 3.16 million Volkswagen-branded vehicles were delivered in the country.[106] The importance of the market has justified a significant amount of China-specific models.

Sedans are favoured segment in China due to their spacious interiors and trunk space. In 2019, the brand sold 1.6 million of them in China. In the compact notchback or sedan segment, the brand is represented by several China-only models which include the Sagitar, Lamando, Bora, Santana, Lavida, and its derivatives in other body styles,[107] while the mid-size sedan segment is represented by the Passat and Magotan.[108][109] The Lavida was the best-selling model in China of all manufacturers in 2019 with 491,000 units sold.[110]

The popularity of SUVs also gave birt

Sedans are favoured segment in China due to their spacious interiors and trunk space. In 2019, the brand sold 1.6 million of them in China. In the compact notchback or sedan segment, the brand is represented by several China-only models which include the Sagitar, Lamando, Bora, Santana, Lavida, and its derivatives in other body styles,[107] while the mid-size sedan segment is represented by the Passat and Magotan.[108][109] The Lavida was the best-selling model in China of all manufacturers in 2019 with 491,000 units sold.[110]

The popularity of SUVs also gave birth to several SUV models built or reworked specifically for China, including the Tharu, Tayron, Tayron X, Tiguan X, and reworked versions of the T-Cross and T-Roc.[111] The brand also has a strong presence in the premium or luxury segment including the Phideon and Viloran as the models developed specifically for China.[112][113]

The brand has a notable history in Brazil. Volkswagen’s relationship with Brazil dates back to the early 1950's. In 1956, Volkswagen began by building a plant in São Bernardo do Campo, near São Paulo as its first manufacturing plant outside Germany as a response to the Brazil’s ban on the import of completely assembled vehicles in 1950.[114] One year later, the plant started to produce the Kombi model – 370 cars at that time, with a 50 percent local content component share. Of 81 million vehicles produced over six decades in Brazil, 23 million of it was built by Volkswagen, which was produced by four passenger car factories in the country. In 2018, Volkswagen accounted for close on 15 percent of the Brazilian car market.[115]

The importance of the Brazilian market gave birth to several models developed and manufactured by Volkswagen do Brasil, which include the Fox, Gol, Nivus, Saviero, Virtus and Voyage. These models are also typically exported throughout Latin America. Historical vehicles built for the market include the Brasília, SP1 & SP2, 1500/Variant/Variant II, Karmann Ghia TC, Parat

The importance of the Brazilian market gave birth to several models developed and manufactured by Volkswagen do Brasil, which include the Fox, Gol, Nivus, Saviero, Virtus and Voyage. These models are also typically exported throughout Latin America. Historical vehicles built for the market include the Brasília, SP1 & SP2, 1500/Variant/Variant II, Karmann Ghia TC, Parati and Suran.[116][117][118] The Gol, first launched in 1980, was the best-selling car in the country for 27 consecutive years, up until 2013.[115]

Volkswagen do Brasil produced and sold pure ethanol-powered (E100 only) vehicles in Brazil, and production was discontinued only after they were supplanted by more modern Flex Fuel technology. As a response to the 1973 oil crisis, the Brazilian government began promoting bioethanol as a fuel, and the National Alcohol Program -Pró-Álcool- (Portuguese: Programa Nacional do Álcool) was launched in 1975.[119][120][121] Compelled by the 1979 energy crisis, and after development and testing with government fleets by the CTA at São José dos Campos, and further testing of several prototypes developed by the four local carmakers, including Volkswagen do Brasil, pure ethanol vehicles were launched in the Brazilian market.[119][120] Gasoline engines were modified to support hydrous ethanol characteristics and changes included compression ratio, amount of fuel injected, replacement of materials that would get corroded by the contact with ethanol, use of colder spark plugs suitable for dissipating heat due to higher flame temperatures, and an auxiliary cold-start system that injects gasoline from a small tank in the engine compartment to help starting when cold. Within six years, around 75% of all Brazilian passenger cars were manufactured with ethanol engines.[119][122]

Production and sales of pure ethanol vehicles tumbled beginning in 1987 owing to several factors, including a sharp decline in gasoline prices as a result of the 1980s oil glut, and high sugar prices in the world market, shifting sugarcane ethanol production from fuel to sugar. By mid-1989, a shortage of ethanol fuel supply in the local market left thousands of vehicles in line at gas stations or out of fuel in their garages, forcing consumers to abandon ethanol vehicles.[121][123]

Flexible-fuel vehicles

Brazilian 2003 VW Gol 1.6 Total Flex.jpg
1980s oil glut, and high sugar prices in the world market, shifting sugarcane ethanol production from fuel to sugar. By mid-1989, a shortage of ethanol fuel supply in the local market left thousands of vehicles in line at gas stations or out of fuel in their garages, forcing consumers to abandon ethanol vehicles.[121][123]

The 2003 VW Gol 1.6 Total Flex was the first full flexible-fuel vehicle launched in Brazil, capable of running on any blend of gasoline and E100. In March of that year, on its fiftieth anniversary, Volkswagen do Brasil launched in the local market the Gol 1.6 Total Flex, the first Brazilian commercial flexible fuel vehicle capable of running on any mix of E20-E25 gasoline and up to 100% hydrous ethanol fuel (E100).[124][125][126][127] After the pure ethanol fiasco, consumer confidence in ethanol-powered vehicles was restored, allowing a rapid adoption of the flex technology. This was facilitated by the fuel distribution infrastructure already in place throughout Brazil, with more than 30 thousand fueling stations, a heritage of the Pró-Álcool program[128]

Owing to the success and rapid consumer acceptance of the flex-fuel versions, by 2005 VW had sold 293,523 flex-fuel cars and light-duty trucks, and only 53,074 gasoline-only automobiles,[129] jumping to 525,838 flex-fuel vehicles and only 13,572 gasoline-only cars and 248 gasoline-only light trucks in 2007,[130] and reaching new car sales of 564,959 flex-fuel vehicles in 2008, representing 96% of all new cars and light-duty trucks sold in that year.[131] VW do Brasil stopped manufacturing gasoline-only vehicles models for the local market in 2006,[125] and all of the remaining gasoline-only Volkswagen models sold in Brazil are imported. The flex-fuel models currently produced for the local market are the Gol, Fox, CrossFox, Parati, Polo Hatch, Polo Sedan, Saveiro, Golf, and Kombi.[129] jumping to 525,838 flex-fuel vehicles and only 13,572 gasoline-only cars and 248 gasoline-only light trucks in 2007,[130] and reaching new car sales of 564,959 flex-fuel vehicles in 2008, representing 96% of all new cars and light-duty trucks sold in that year.[131] VW do Brasil stopped manufacturing gasoline-only vehicles models for the local market in 2006,[125] and all of the remaining gasoline-only Volkswagen models sold in Brazil are imported. The flex-fuel models currently produced for the local market are the Gol, Fox, CrossFox, Parati, Polo Hatch, Polo Sedan, Saveiro, Golf, and Kombi.[132] By March 2009, Volkswagen do Brasil had attained the milestone mark of two million flex-fuel vehicles produced since 2003.[133][134]

Volkswagen and Sanyo have teamed up to develop a battery system for hybrid cars.[135] Volkswagen head Martin Winterkorn has confirmed the company plans to build compact hybrid electric vehicles. He has stated "There will definitely be compact hybrid models, such as Polo and Golf, and without any great delay", with gasoline and diesel power. For example, Golf is the ideal model to go hybrid as the Golf 1.4 TSI was recently awarded the "Auto Environment Certificate" by the Oko-Trend Institute for Environmental Research, and was considered as one of the most environmentally friendly vehicles of 2007.[136] Also underway at Volkswagen's Braunschweig R&D facilities in Northern Germany is a hybrid version of the next-generation Touareg.[137]

VW intends all future models to have the hybrid option. "Future VW models will fundamentally also be constructed with hybrid concepts," VW head of development Ulrich Hackenberg told Automobilwoche in an interview. Hackenberg mentioned that the car based on the Up! concept seen at Frankfurt Motor Show,[138] as well as all future models, could be offered with either full or partial hybrid options. The rear-engine up! will go into production in 2011. Nothing has been said about plug-in hybrid options.[139]

Volkswagen announced at the 2010 Geneva Motor Show the launch of the 2012 Touareg Hybrid, scheduled for 2011.Automobilwoche in an interview. Hackenberg mentioned that the car based on the Up! concept seen at Frankfurt Motor Show,[138] as well as all future models, could be offered with either full or partial hybrid options. The rear-engine up! will go into production in 2011. Nothing has been said about plug-in hybrid options.[139]

Volkswagen announced at the 2010 Geneva Motor Show the launch of the 2012 Touareg Hybrid, scheduled for 2011.[140][141] VW also announced plans to introduce diesel-electric hybrid versions of its most popular models in 2012, beginning with the new Jetta, followed by the Golf Hybrid in 2013 together with hybrid versions of the Passat.[142][143] In 2012, the Volkswagen Jetta Hybrid set the world record to become the fastest hybrid car at 187 mph.

In November 2009, Volkswagen announced it has hired Karl-Thomas Neumann as its group chief officer for electric traction.[144] VW's Chief of research, Jürgen Leohold, said in 2010 the company has concluded hydrogen fuel-cell cars are not a viable option.[145][146]

[update], the Volkswagen Group offers for retails customers nine plug-in electric cars, of which, three are all-electric cars: the Volkswagen e-Up!, e-Golf and Audi R8 e-tron, and six are plug-in hybrids: the Volkswagen Golf GTE, Passat GTE, Audi A3 Sportback e-tron, Q7 e-tron quattro, Porsche Panamera S E-Hybrid and Cayenne S E-Hybrid.[147] Also two limited production plug-in hybrids were manufactured beginning in 2013, the Volkswagen XL1 (250 units) and the Porsche 918 Spyder (918 units).[148][149] Total cumulative sales of all Volkswagen brand electrified cars since the start of their respective production is expected to reach about 103,000 by the end of 2016.[147]

In order to comply with increasingly strict carbon dioxide emission limits in major markets, the VW Group expects to sell about one million all-electric and plug-in hybrid vehicles a year worldwide by 2025. The Group plans to expand its plug-in range with 20 new pure electric and plug-in hybrid cars, including two cars to compete with Tesla Motors, the Porsche Mission E all-electric car and the Audi e-tron quattro, which is expected to become the brand's first mass-production electric vehicle. According to Thomas Ulbrich, VW brand production chief, the carmaker has the capacity to build as many as 75,000 battery-electric and plug-in hybrids a year if demand rises. Volkswagen announced in October 2015 that "it will develop a modular architecture for battery-electric cars, called the MEB. The standardized system will be designed for all body structures and vehicle types and will allow the company to build emotionally appealing EVs with a range of up to 310 mi (