Volkswagen Case Study

Volkswagen

Volkswagen has been around for years and recently sales have been down in the US do to economic and political structure. Volkswagen expects to be back on top by 2018. There are several reasons why the shares have dropped in the US due to the change in the economy.

One reason why Volkswagen has been successful in Europe vs. the US is because their cars are made in Europe. When the economy of the US dropped so does the US's dollar. The currency fluctuation cost VW a lot of money and due to high prices US buyers were not buying. Volkswagen's shares came under pressure after the car maker cautioned that volatility in exchange rates, interest rates and commodity prices would peg back full-year revenue and sales growth even as it delivered another set of bumper quarterly profits (Bryant 2011). Another economic factor is the cost to import Volkswagen parts was expensive for Volkswagen. The high cost again was due to the fluctuation of currency. Lastly, Volkswagen's low-carbon strategy has increased sales in Europe vs. the US the reason being is there is less taxes on diesel fuel.

The political reason that is affecting the US sales is exchange rates due to the economy being poor. Volkswagen was waiting for the US to settle a political deal to settle their debt (citation). Volkswagen stated "We continue to be concerned about the development of the euro as well as the debt situation in some European countries and the United States" (BBS NEWS). Basically the economy of the US economy is affecting sales of Volkswagen.

In conclusion, Europe's stronger economy and euro makes Volkswagen's successful in Europe. The sales in the US have dropped due to the economy falling and causing the value of their dollar to drop. The political issues behind that is the government of the US fixing their debt. Volkswagen does see a future with the US and hopes to overcome and be on top by 2018.