Porsche Type-12. Ferdinand Porsche’s idea of “volksauto” from 1931. Inspiration for Volkswagen Project.
Volkswagen started as an idea of Ferdinand Porsche, who wanted to create a new kind of car, that would have been affordable to everybody, still being efficient in exploitation. In 1937 German Labour Front joined Porsche and found “Volkswagen” in order to commence mass production of such vehicle. The first car was presented in 1939.
The WW2 shifted focus of production to military vehicles, which were still based on the same cheap platform, as proposed “volksauto”. After the war the future of “Volkswagen” was uncertain. However, British officer Ivan Hirst, who was responsible for maintenance of the factory as it was ceased to Britain by Americans, noticed the exceptional qualities of the “volksauto” and presented it to British Army command. The car made good impression, followed by placement of contract for 20000 cars.
After war, restriction placed limits on maximum car production in Germany, bringing it to 10% of 1936 amounts. The still damaged by war bombardments factory was offered for sale to numerous automotive industries in the world: American, British, Australian. It was even offered to Ford Motor Company free of charge. But nobody took the burden. The enterprise seemed very risky and nobody believed that damaged plant could produce the car and even didn’t consider the car itself to have any potential in sales, being far from what everybody considered as an automobile, luxury item.
Therefore, company was re-structured as a trust and ceased to State of Lower Saxony. After that company started to expand to new markets, offering cars in USA, Britain and other regions. Being rather modest in the beginning, sales plummeted in those regions, as car became extremely popular within younger consumers.
Up until 1961 model range of company was limited by two models: Type 1 (Beatle) and Type 2 (Commercial utility vehicle). But in 1960s model range was expanded by 2 new models, which introduced new approach in manufacturing, using more sophisticated features, like automatic transmission and electronic fuel injection. Company also decided to upper-middle class car market, founding new devision and giving it a name “Audi” — brand of luxury automobiles, that ceased to exist in 1944.
In 1970s sales of classic Volkswagen models started to decline dramatically. To counterweight the trend, company started to introduce new models, that borrowed some crucial Audi designs: Passat (re-badged Audi 80), Scirocco, Golf and Polo (re-badged Audi 50).
Being the most successful model, Golf was conquering one market after another, becoming the most popular car model in many countries. However, in 1980 Volkswagen sales in USA started to decline and after several unsuccessful, but costly attempts to re-gain the market, company decided to target developing markets. In 1982 cooperation contract with Spanish SEAT was signed, where Volkswagen’s majority share reached 75% in 1986.
In the end of 1980s, Audi brand reached the same level of consumer perception, as BMW and Mercedes, leaving upper-middle class segment empty in Volkswagen’s portfolio. Attempting to fill the void, Volkswagen started to re-position itself on the market, moving upward. Seat with newly acquired Czech Skoda were filling the market, that was previously occupied by VW.
In 1990s company was anchoring it’s brands on markets, covering broad range of classes, from cheap entry-level vehicles to luxury cars. In late 1990s VW expanded even further, buying Lamborghini, Bentley and Bugatti, entering luxury sports cars market.
2000s were the time of model range expansion for every VW brand, most notably by utility-class vehicles as Audi Q7 and VW Touareg.