Volkswagen

Volkswagen, [literally: "people's car"] (also known as VW) is an automobile manufacturer based in Wolfsburg, Germany.

It forms the core of Volkswagen AG (VWAG), one of the world's four largest car producers.

Origins in 1930s Germany

Though the origins of the company date back to the 1930s, the design for the car that would become known as the Beetle / "Käfer" date back even further, as a pet project by car designer Ferdinand Porsche (1875–1951). Adolf Hitler's desire that almost anybody should be able to afford a car coincided with this design—although much of this design was inspired by the advanced Tatra cars of Hans Ledwinka.

Hitler's changes to the original design included better fuel efficiency (to make it more economical for the working man), reliability, ease of use, and economically efficient repairs and parts. 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" - "Save five Marks a week to drive in your own car"), which around 336,000 people eventually paid into. Volkswagen honored its savings agreements after World War II; Ford, which had a similar "coupon" savings system, reportedly did not. Prototypes of the car called the KdF-Wagen (German: Kraft durch Freude = "strength through joy"), appeared from 1936 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, features similar to the Tatra. The VW car was just one of many KdF programs which included things such as tours and outings.

Erwin Komenda, the longstanding Porsche chief designer, developed the car body of the prototype, which was recognizably the Beetle we know today. It was one of the first to be designed with the aid of a wind tunnel; unlike the Chrysler Airflow, it would be a success.

The new factory in the new town of KdF-Stadt, now called Wolfsburg, purpose-built for the factory workers, only produced a handful of cars by the time war started in 1939. None were actually delivered to holders of the completed saving stamp books, though one Type 3 Cabriolet was presented to Hitler on his fiftieth birthday, in 1938.

War meant production turned to military vehicles, the Type 81 Kübelwagen utility vehicle (VW's most common wartime model) and the amphibious Schwimmwagen .

1945: British Army and Ivan Hirst, unclear future

The company owes its postwar existence largely to one man, British Army officer Major Ivan Hirst (1916–2000). In April 1945, KdF-Stadt and its heavily bombed factory were captured by the Americans, and handed to the British to administer. The factory was placed under the control of Oldham-born Hirst. At first, the plan was to use it for military vehicle maintenance. Since it had been used for military production, and had been a "political animal" (Hirst's words) rather than a commercial enterprise, the equipment was in time intended to be salvaged as war reparations. Hirst painted one of the factory's cars green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000. The first few hundred cars went to personnel from the occupying forces, and to the German Post Office. By 1946 the factory was producing 1,000 cars a month, a remarkable feat considering the factory was still in disrepair: the damaged roof and windows meant rain stopped production; the steel to make the cars had to be bartered for new vehicles.

The car and its town changed their Second World War-era names to Volkswagen and Wolfsburg respectively, and production was increasing. It was still unclear what was to become of the factory. It was offered to representatives from the British, American and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "is quite unattractive to the average motorcar buyer, is too ugly and too noisy ... If you think you're going to build cars in this place, you're a bloody fool, young man." (In a bizarre twist of fate, Volkswagen would manufacture a locally built version of Rootes' Hillman Avenger in Argentina in the 1980s, long after Rootes went bust at the hands of Chrysler in 1978—the Beetle outliving the Avenger by over 30 years)

Ford representatives were equally critical: the car was "not worth a damn". In France Citroën started the 2CV on a similar marketing concept. In Italy it was the Fiat 500.

1948–1974: Icon for German regeneration

From 1948, Volkswagen became a very important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff (1899–1968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949 Hirst left the company, now re-formed as a trust controlled by the West German government. Apart from the introduction of the Type 2 commercial vehicle (van, pickup and camper) and the Karmann Ghia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968.

On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Production of the Type 1 Volkswagen Beetle (German: 'Käfer', US: 'Bug', Mexican: 'Vocho', 'Vochito', French: 'Coccinelle', Portuguese: 'Carocha', Brazilian: 'Fusca', Danish: 'Boble, Folkevogn', Polish: 'Garbus') increased dramatically over the years, the total reaching one million in 1954. Despite the fact it was almost universally known as the Beetle, it was never officially known as such, instead referred to as the Type 1. Not until 1998 and the Golf-based New Beetle would the name be adopted by Wolfsburg.

During the 1960s and early 1970s, although the car was becoming outdated, American exports, innovative advertising and a growing reputation for reliability helped production figures to surpass the levels of the previous record holder, the Ford Model T. By 1973 total production was over 16 million.

VW expanded their product line in 1967 with the introduction of several Type 3 models, which were essentially body style variations (Fastback, Notchback, Squareback) based on Type 1 mechanical underpinnings, and again in 1969 with the relatively unpopular Type 4 (also known as the 411 and 412) models, which differed substantially from previous models with the notable introduction of unibody construction, a fully automatic transmission, electronic fuel injection, and a sturdier powerplant. In 1973, Volkswagen introduced the military-themed Thing (Type 181) in America, recalling the wartime Type 81. The military version was produced for the NATO-era German army (Bundeswehr) during the cold war years of 1970 to 1979. The US Thing version only lasted two years, 1973 and 1974, due at least in part to Ralph Nader's automobile safety campaigns.

1974: From Beetle to Golf

Volkswagen was in serious trouble by the end of the 1960s. The Type 3 and Type 4 models had been comparative flops, and the NSU-based K70 also failed to woo buyers. The company knew that Beetle production had to end one day, but the conundrum of replacing it had been a never ending nightmare. The key to the problem was the 1964 acquisition of Audi/Auto-Union. The Ingolstadt-based firm had the necessary expertise in front wheel drive and water-cooled engines that Volkswagen so desperately needed to produce a credible Beetle successor. Audi influences paved the way for this new generation of Volkswagens, known as the Polo, Golf and Passat.

Production of the Beetle at the Wolfsburg factory switched to the VW Golf in 1974, marketed in the United States as the Volkswagen Rabbit in the 1970s and as the Golf in the 1980s. This was a car unlike its predecessor in most significant ways, both mechanically as well as visually (its angular styling was designed by the Italian Giorgetto Giugiaro). Its design followed trends for small family cars set by the 1959 Mini and 1972 Renault 5—the Golf had a transversely mounted, water-cooled engine in the front, driving the front wheels, and had a hatchback, a format that has dominated the market segment ever since. Beetle production continued in smaller numbers at other German factories until 1978, but mainstream production shifted to Brazil and Mexico.

From 1970s to present

While Volkswagen's range of cars soon became similar to that of other large European car-makers, the Golf has been the mainstay of the Volkswagen lineup since its introduction, and the mechanical basis for several other cars of the company. There have been five generations of the Volkswagen Golf, the first of which was produced from the summer of 1974 until the end of 1983, sold as the Rabbit in the United States. Its chassis also spawned the Scirocco coupe and Jetta sedan. The second generation Golf hatchback/Jetta sedan ran from late 1983 to late 1991. In 1991, Volkswagen launched the third-generation Golf and it was third time lucky when the Volkswagen Golf was voted European Car of the Year for 1992. The previous two versions had lost out to the Citroën CX in 1975 and the Fiat Uno in 1984. This time the sedan version of the Golf was badged Vento in Europe (but Jetta in the USA). The fourth incarnation of the Golf arrived in late 1997, its chassis spawned a host of other cars within the Volkswagen group—the Volkswagen Bora (the sedan, still called Jetta in the USA), Volkswagen New Beetle, Seat Toledo, Seat Leon, Audi A3, Audi TT and Skoda Octavia. However, it was beaten into third place for the 1998 European Car of the Year award by the winning Alfa Romeo 156 and runner-up Audi A6. The current Volkswagen Golf was launched in late 2003, came runner-up to the Fiat Panda in the 2004 European Car of the Year, and has so far spawned the new generation Seat Toledo, Skoda Octavia and Audi A3 hatchback ranges as well as a new mini-MPV, the Seat Altea. The fifth-generation Golf is now available in Europe, and the GTI boasts a 2.0 L Turbocharged direct injection engine. The fifth generation Jetta, and the performance version, the GLI, are currently available in the United States and Canada.

The other main models have been the Polo, a smaller car than the Golf, and the larger Passat for the segment above the Golf. As of 2005, there have been four incarnations of the Polo: Mk 1 (1976), Mk 2 (1981, facelifted 1990), Mk 3 (1994, facelifted 1999) and the current Mk 4 (2002). The Scirocco and Corrado were both Golf-based coupés.

In 1998, Volkswagen launched the J Mays-designed New Beetle, a "retro"-themed car with a resemblance to the original Beetle but based on the Golf. Its genesis was secret and in opposition to VW management, who felt it was too backward-looking. It has been popular in the USA, less so in Europe. In 2002, Volkswagen announced two models taking it into market segments new to the company: the Phaeton luxury car, and the Touareg ("tour regg") SUV. The Phaeton was critically acclaimed but not well received in the marketplace. In 2005 VW announced its discontinuance on the US market for fall 2006, mainly due to the disappointing sales there and the need for major investments in the cars line of engines (W12 and V8) to meet new emission requirements. Also, Volkswagen has faced harsh criticism that the Phaeton had used up money that was better invested in their smaller cars. Much of this criticism is due to the poor quality of the last generation Jetta/Golf and the preceived lack of performance in the new Jetta. Much of the criticism of the new Jetta was stated before the new GLI model came out.

Volkswagen currently offers a number of its vehicles with an advanced, light duty diesel engine known as the TDI. While extremely popular in the European market, light duty diesels do not yet enjoy the same wide acceptance in the American marketplace, despite increased fuel economy and performance comparable to gasoline engines due to turbocharging. According to the U.S. Environmental Protection Agency, 4 of the 10 most fuel efficient vehicles available for sale in the U.S. in 2004 were powered by Volkswagen diesel engines. They were a three way tie for 8th (TDI Beetle, TDI Golf, TDI Jetta) and 9th, the TDI Jetta Wagon. Sales of light duty diesel engine technology are increasing as gasoline prices rise. Products such as the Toyota Prius might have highlighted the economy of non-gasoline engines, but in reality, a Volkswagen TDI engine is often found to be more efficient than the Prius on the highway (although not so when driving in the city). In addition, all VAG TDI diesel engines produced since 1996 can be driven on 100% biodiesel.

Cult status of the Beetle

Like its competitors, the Mini and the Citroën 2CV, the original-shape Beetle long outlasted predictions of its lifespan. More so than those cars, it maintains a very strong following worldwide, being regarded as something of a "cult" car, like the Delorean since its 1960s association with the hippie movement. Currently, there is a wide array of clubs that are concerned with the beetle. The fans are quite diverse. Looks include the resto-look, Cal Look, German-look, resto-Cal Look, buggies, Baja bugs, old school, ratlook, etc. Part of their cult status is attributed to being one of a few cars with an air-cooled, horizontally-opposed engine design and the consequent ease of repair and modification as opposed to the more conventional and technically complex watercooled engine design.

By 2002 there had been over 21 million Type 1's had been produced.

On July 21, 2003, the last Type 1 rolled off the production line in Puebla, Puebla, Mexico. It was car number 21,529,464, and was immediately shipped off to the company's museum in Wolfsburg, Germany. In true Mexican fashion, a mariachi band serenaded the last car in the 68-year-old history. The last car was nicknamed El Rey, which is Spanish for "The King". The last 3000 type 1's were called the "Ultima Edicion" or the last edition.

In the United States, most notably in California, Volkswagen enthusiasts frequent large Volkswagen-themed car shows, especially in the summer months. Many of these shows feature camping, a car show called a "show 'n' shine", drag racing, parts swap meet, raffles, and other events. Die-hard and loyal "VW-heads" attend these shows regularly, often travelling 500 miles or more to attend their favorite event.

In the winter, a group of drivers of the "split window" bus model (1951-1967 Microbusses, trucks, campers, and panel vans) drive from Guerneville, CA, to Mt. Shasta CA, entirely on unpaved jeep roads. This event is called the "Mt. Shasta Snow Trip Challenge" and is a good example of VW enthusiasts' trust in the durability of their often 40-year-old cars.

Relationship with Porsche

The company has had a close relationship with Porsche, the Stuttgart-based sports car manufacturer founded in 1947 by Ferry Porsche, son of the original Volkswagen designer Ferdinand Porsche. The first Porsche cars, the 1948 Porsche 356, used many Volkswagen components including a tuned engine, gearbox and suspension. Later collaborations include the 1969/1970 VW-Porsche 914, the 1976 Porsche 924 (which used many Audi components and was built at an Audi factory), and the 2002 Porsche Cayenne (which shares engineering with the VW Touareg).

In September 2005, Porsche announced it was buying a 20% stake in Volkswagen at a cost of €3 billion, with the intention that the combined stakes of Porsche, Volkswagen and the government of Lower Saxony ensure that any hostile takeover by foreign investors would be impossible [1].

Corporate structure

Volkswagen is part of the Volkswagen group, along with:

• Audi (the former post-WWII Auto Union/DKW)—bought from Daimler-Benz in 1964.
• NSU—bought in 1969 by Volkswagen's Audi division, a brand not used since 1977
• SEAT—majority owned since 1987
• Škoda—bought in 1991
• Bentley—bought in 1998 from Vickers along with Rolls-Royce -cannot produce cars using the Rolls-Royce marque because the trademarks went to BMW
• Bugatti—name bought in 1998
• Lamborghini —bought in 1998

From July 1998 until December 2002, Volkswagen's Bentley division also sold cars under the Rolls-Royce name under an agreement with BMW, which had bought the rights to that name. From 2003, only BMW may make cars called Rolls-Royce.