VOLKSWAGEN AG

CHEUVREUX 3rd German Corporate Conference

Ralf Limbach Executive Director Group Marketing Volkswagen AG

Multi-Brand Strategy and Brand Differentiation at VOLKSWAGEN AG

Kronberg, 21 January 2004

Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

Introduction Market drivers at the beginning of the 21st century Changes

Individualisation of customer demand Multioptional consumer behaviour

Consequences
Customers demand greater variety of concepts / bodystyles and move to niches Increasingly a buyers market, consumers are well-informed and less loyal to a particular product Product content expectations are higher, increased sensitivity to purchase and running costs Stronger brand profiling, customer loyalty and personal identification with the brand. Increased flexibility is demanded of manufacturers Chance to develop new markets (Eastern Europe, Asia)

Greater environmental and price consciousness, greater demands on product (comfort, performance) Shorter product life cycles

Liberalisation of markets

Introduction Development of automotive sales worldwide

Light vehicle sales in millions (incl. light trucks / SUVs / MPVs)
80 70 60 50 40 30 20 10 NAFTA 1.1% 2.7% 30.8% Asia & Australasia Africa & Middle East Western Europe Eastern Europe 4.9% 3.6% 0.8% 5.6% Growth 2002-2013 (CAGR)

Latin America / RoW 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Global Insight / DRI Automotive

Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

Multi-brand strategies How important are brands / the positioning of brands?

5.0 =100% . . . Luxury goods Cars Food/drink . . . Telecommunications Transport and logistics . . . Energy suppliers 2.5 = 62.5% Low brand . . . relevance* 1.0 = 0% 3.3 = 82.5% 3.2 = 80% 3.8 = 95% 3.8 = 95% 3.6 = 90% High brand relevance

*determined empirically on a scale from 1-5 source: McKinsey / MCM

Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

Implementation of brand values Brand core / brand claim / brand values

Volkswagen AG

Seat
Auto Emocin

Audi
Vorsprung durch Technik

Volkswagen
Aus Liebe zum Automobil

koda
koda - Simply Clever

Lamborghini
The Ultimate Sports Car

Bentley
The Sporting Grand Tourer

Implementation of brand values Distribution policy - showroom concepts

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Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

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Management of the brand portfolio of VOLKSWAGEN AG Brand positioning

emotional

value

prestige

rational
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Management of the brand portfolio of VOLKSWAGEN AG Timely Roll Out of New Niches and New Models
Hatch Hatch Notch Station Notch Station
MPV MPV

Pickup/ Pickup/ Del. Van Del. Van

SUV SUV

Sport Sport Coup Coup

Lim. Lim. Coup Coup

Conv. Conv.

RoadRoadster ster

Luxury Luxury Upper Upper Upper Upper Middle Middle Middle Middle Compact Compact Small Small Mini Mini
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new models

*)

*) = long wheelbase version

Management of the brand portfolio of VOLKSWAGEN AG Coordination and steering of brand portfolios
putting brand values into operation
Design Product Personality

Brand policy

Brand values

Establishing the brand portfolio

Clear goals for the brands consistent with the multi-brand strategy Action / budget for the brand management has to be planned and implemented

Feedback

Brand constitution

Implementing the brand portfolio Brand audit

Steering & coordination

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Agenda
Introduction Multi-brand strategies Implementation of brand values as a starting point for the multi-brand strategy Management of the brand portfolio of VOLKSWAGEN AG

Future developments

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Future developments Product policy - Volkswagen Aus Liebe zum Automobil

Golf V
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Concept R (Frankfurt 2003)

Future developments Product policy - koda koda - Simply Clever

Fabia RS
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Roomster Concept (Frankfurt 2003)

Future developments Product policy - Audi Vorsprung durch Technik

A3
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Le Mans Concept (Frankfurt 2003)

Future developments Product policy- Seat Auto Emocin

Len Cupra R
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Altea MSV Prototype (Frankfurt 2003)

Future developments Product policy - Volkswagen Nutzfahrzeuge Individual Transportation Solutions for Every Customer
Nutzfahrzeuge

T5 Multivan
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Microbus Concept

Thank you very much for your attention!

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