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Volkswagen to add 50k jobs by 2018

Volkswagen still has its eyes set on becoming the top global automaker by 2018, and to get there, it's apparently going to need more boots on the ground. Automotive News Europe is reporting that VW is looking to increase its staff by 50,000 over the next five years - an increase of nine percent - which does not include an increase in its US dealer network.
According to the report, a majority of the growth will come from China where the automaker is also looking to double its production capacity in the same time frame. The Volkswagen Group is already expected to rival General Motors for the top sales spot in China this year, and such a rapid expansion in the region could make a good springboard for sales increases in other countries.

VW budget sub-brand stuck in limbo over VW standards, costs

Reports in October 2012 claimed Volkswagen had begun investigating the creation of its own budget brand. This came after having failed to purchase Malaysian car company Proton or produce a meaningful partnership with Suzuki, and after watching Renault-Nissan make piles of euro on Dacia and plot the return of Datsun. For VW, more important than the question of what to call it was how to build it profitably and in a way that didn't damage the VW brand. According to a report in Autocar, a satisfactory answer still hasn't been found. The hurdle is how to hit "'necessary' quality and safety levels" at the price points needed to make the venture worthwhile. At the time of the 2012 report, German outlet Der Spiegel said VW was trying to get prices down to 6,000 to 8,000 euro ($7,784 to $10,379 US), about two thousand to four thousand euro under the price of the VW Up and in line with the cost of a 6,790-euro Dacia Sandero in Germany. In March 2013, VW announced, "We want to bring a true budget car to the market in China in the foreseeable future," the most concrete move in that direction after years of planning to make a decision. Working with local Chinese maker FAW, it was predicted that the vehicle in question would appear around 2016, but as of November last year a final vote on it needed to wait until this year because "We are still working on the cost side" and profit possibilities for a car that "has to be durable, it has to be precise, it has to be safe." Even Fiat, another automaker long considering a budget brand beneath its Fiat line-up, wasn't sure how to squeeze any extra money from lower-cost products but was sure that it couldn't be done by manufacturing in Europe. If VW hasn't yet made the math work with a joint venture in China, it will be interesting to see how it might build a European go-it-alone business case.

VW makes $23K on every Porsche sold, more than Bentley or Lamborghini

It's a good time to be in the luxury car business. In Volkswagen Group's financial report for the 2013 fiscal year, it is revealed that that Porsche enjoyed an operating margin of 18 percent. That means the Stuttgart brand made on average about $23,200 per car sold, according to BusinessWeek. Bentley wasn't far behind, and Audi (which was combined with Lamborghini) posted a 10.1 percent margin. This compares to only around 2.9 percent for the Volkswagen brand.
"Luxury brands are on fire," said Dave Sullivan, an industry analyst at AutoPacific. He said that the average profit margin is between six and eight percent. Brands like Porsche and Bentley have the benefit of competing in rarefied markets. Buyers looking at one their vehicles have fewer models to shop against and don't care as much about price. They can also charge more for options, which further boosts income, according to BusinessWeek.
In a way, we should be more impressed by the continued success from Audi. Its models generally have direct competitors in every segment from the other premium automakers. Plus, their buyers aren't the captains of industry who are shopping for a Bentley. Still, the Four Rings is leading rivals in sales so far this year.