Case Details
Electrification at Volkswagen: Fold or Call?
Volkswagen Group is the world’s second-largest car manufacturer, with China being its largest market. Its portfolio includes Volkswagen, Audi, Porsche, Skoda, Seat, Cupra, Lamborghini, and Bentley. Oliver Blume, chairman of Dr. Ing. h.c. F. Porsche AG (“Porsche”), was appointed to take on an additional role as chairman of the parent company, Volkswagen AG, in September 2022, following the removal of the previous chairman by shareholders and union representatives. Challenged by weak sales, overcapacities, and a high-cost structure, Volkswagen’s factories in Germany were under threat of closure for the first time. The Group recorded a 15% year-on-year drop in annual operating profit in 2024, and vehicle sales volume fell short of that in 2023. Would Blume be able to reverse the fortunes of Europe’s largest carmaker? What options did he have to ensure the company’s future or survival?
The Case provides a data-rich narrative which can be used in strategy and turnaround management classes as well as for executive education. Students will gain an overview of the challenges and dynamics facing the automotive sector in the paradigm shift to electric mobility, and the rise of China as the leader in EV manufacturing. The global commitment to transform to electric mobility offers an opportunity to discuss the impact of macroeconomic phenomena and decisions, national industrial policy, as well as international trade.
Learning Objective:
- To provide students with a basic understanding of competitive theory, innovation management, ambidexterity of an organization and the complexities of supply chain management.
- To explore the opportunities and challenges facing the automotive industry in the paradigm shift to electric mobility, the changing industry dynamics, and the competitive landscape.
- To offer an opportunity to discuss the impact of macroeconomic phenomena and decisions, industrial policy, as well as international trade.