Which brands are currently ranked #1 in the global automotive market? It is the Volkswagen Group of Germany, known as an advanced automobile country. In 2019, Volkswagen set a new record in sales of 10.97 million units, establishing itself as the world’s No. 1 automobile brand in name and reality. However, it is said that there is a market in which Volkswagen is unable to demonstrate its power. It is the domestic automobile market.
Volkswagen is recording a high sales volume not only in Europe but also in China with its solid base and reasonable price. However, it is not as good as in Korea, and it is recording poor sales. What is the reason? Today’s AutoPost Issue Plus takes a step further into the story of Volkswagen, a brand that is being undervalued in Korea.
Written Choong Lee’s Editor
With popular brands
Premium brand
Cars are different
When referring to popular vehicles, what brands do people think of? You can refer to Japanese car brands such as Toyota and Nissan, Hyundai, Chevrolet, and Renault Samsung. These manufacturers, known as popular brands, are manufacturers of mass vehicles with reasonable prices and universal convenience functions.
On the other hand, manufacturers such as Mercedes and BMW are slightly different from these. First of all, there is a difference in price, and the installed performance and options are also different from those of popular vehicles. We classify manufacturers that produce luxury cars as premium brands.
Wanting something special
For consumers
There is also a brand
Here is not the end. There are also luxury brands aimed at more luxurious vehicles than premium brands. These include Rolls-Royce, Bentley, and Maybach, which are considered one of the world’s top three cars. For consumers who want to be special, it allows consumers to choose from materials used in vehicle manufacturing, and there is a considerable amount of manual processes.
On the other hand, there are brands that manufacture high-performance cars like Porsche, while others specialize in sports cars like Lamborghini and Bugatti. By the way, there are popular brands that have all of these manufacturers. It is a Volkswagen Group.
From compact cars to super cars
Various Volkswagen affiliates,
But the domestic perception…
Along with Mercedes and BMW, a brand mentioned as one of Germany’s top three premium cars, Audi is a premium brand of the Volkswagen Group. Brands such as Porsche, Bugatti, and Lamborghini that make high-performance supercars are also affiliates of Volkswagen. Even luxury brand Bentley is part of the Volkswagen Group.
For this reason, some people rate the Volkswagen Group as “a brand that can make any car.” This is because you can make any car that moves with wheels, from light cars to super cars to luxury cars. However, Volkswagen, a popular brand of the Volkswagen Group, which has premium and luxury brands, has been shown to be undervalued in the Korean auto market. What is the reason
“National Car” Volkswagen
It is a representative popular brand
The brand name Volkswagen means “national car” in German. The purpose of targeting the public is revealed from the name appropriate to the position of the popular brand. Because of this, although it is an imported brand, there is a side that is low in recognition compared to other imported cars imported into Korea. People’s perception is that it is the position of Hyundai-Kia Motors, which is a car that German commoners love, that is, when it comes to Korea.
In addition, recently, it has launched vehicles such as Jetta and Passat in the domestic market at the price of domestic cars, shouting for the popularization of imported cars. Therefore, some argue that the position of Volkswagen is already different from other imported cars. However, it is not just because it is a popular brand that the domestic perception of Volkswagen is bad.
With the diesel gate incident
Enormous in the image
Damaged
In the past, the Volkswagen Sedan was recognized as a vehicle with solid basics based on the technology of Germany, an advanced automobile country. In addition, the premium brand of the Volkswagen Group, Audi, also recorded outstanding sales, showing a tight confrontation with Mercedes and BMW in Korea. However, an incident occurs where the image of the Volkswagen Group falls into hell. It is a so-called diesel gate, an exhaust gas manipulation incident in 2015.
It turns out that Volkswagen sold by manipulating the emissions of its own diesel engine. This was not a problem limited to the popular brand Volkswagen, but a problem that extended to the vehicles of affiliates that share the engine. Immediately after the incident, the stock price fell by 17% and the market capitalization of 20 trillion was evaporated. The image in the domestic market, which used to record good grades, also fell to hell.
Poor sales volume
Gave birth to a vicious cycle
There is a story that sales volume produces sales volume. This means that if one product records a good performance in the market, it can lead to consumption by other consumers based on its sales volume. The same applies in the opposite situation. This means that products with poor performance cannot seldom drive sales.
After the Diesel Gate incident, not only the popular brand Volkswagen, but also the premium brand Audi, which shared the same diesel engine, suffered a deterioration in its image and sales volume. The sales volume in Korea, which had achieved good results by forming a good image as a sturdy car, has indeed fallen sharply.
At that time, most of the vehicles released in Korea were revoked, and they were banned from sale. Due to this situation, there were cases in which one car could not be sold per month. In addition, the diesel gate incident worsened the overall perception of diesel engines and affected the sales of other diesel vehicles.
After that, the Volkswagen Group immediately apologized and prepared a countermeasure, regaining its No. 1 position in the global automobile market within one year of the incident. However, the image that was degraded at this time continues to this day, affecting Volkswagen’s domestic market share. In the aftermath of this period, some consumers say that Volkswagen’s solid basics are the old words, and that it is at a lower level than Hyundai’s.
To “popularization of imported cars”
Improve awareness
Can you recover your share?
Contrary to its position as the No. 1 market share in the world, Volkswagen is not showing great strength in the domestic automobile market. However, in recent years, it showed the appearance of steadily making efforts to target the domestic automobile market by releasing the Zeta at the price of a domestic car while promoting the popularization of imported cars.
It is a strategy to bring a popular imported car image to the domestic market by taking advantage of the popular brand. As vehicles for the strategy of popularizing imported cars are predicted in the future, attention is paid to whether Volkswagen will be able to recover its past image damaged by diesel gates and exert its strength in the domestic market. It was Auto Post Issue Plus.
[email protected]