Hippo Focus: The VW Group and their world dominance

Date Posted 25th February 2020
Read Time 4 min read

Today, the Volkswagen Group, or VW Group, is the largest automotive manufacturer in the world. But it wasn’t always that way. In fact, they have a more interesting past than most. 

VW Group: The Early Years

Certainly not the company’s finest moment, but an important part of its history nonetheless is its birth. 

Founded in Berlin in 1937, the VW Group, or Limited Liability Company for the preparation of the German People’s Car as it was known then – Volkswagen translating to “the people’s car” – was the product of the German Labour Front, more commonly known as the Nazis.

Adolf Hitler

The company was created for one reason; to make an affordable everyday car for the citizens of Germany. Little did they know that their creation would go on to be one of the most iconic vehicles in the world. 

Volkswagen Type 1

Known at the time as the VW Type 1, but more commonly referred to today as the Beetle, VW’s first creation was the brainchild of Ferdinand Porsche. 

Ferdinand Porsche with the first VW Beetle

Later going on to create the first gasoline-electric hybrid car, Porsche played a significant role in the development of the industry, including the introduction of the manufacturer, Porsche

But in the late 1930s, the Austrian-German, backed by the support of Adolf Hitler, gave the world the first Volkswagen. 

However, despite success in Germany, the beginning of World War II drew a close to mass manufacture. In its place, the Volkswagen plant became a military hub; producing the Porsche Type 82 – a light Jeep-like vehicle – and the Schwimmwagen – an amphibious relation. 

Porsche Type 82

Even though they’re certainly different in looks, both military vehicles were heavily based around the mechanics and powertrain of the VW Beetle at the time. 

Post-War Production

After the war, under British control, the bomb-shattered factory was offered to many an Allied automotive company. 

No British manufacturer was interested, and Ford owner, Ernest Breech, scoffed at the thought of taking control. 

It looked as though Volkswagen’s story was set to come to a premature end, but by one way or another – mostly through the production of British military vehicles – the company survived. And in truth, without it, the landscape of Europe’s vehicles may have looked very different today if it hadn’t. 

VW Beetle Type 1

After an explosion of production in the 1950s, the Volkswagen Type 1 began to fly out the doors again. As did five other models – all of which were based on the original Beetle – the Type 2, 3, 4, 181 and the Karmann Ghia. 

VW’s First Step Towards Worldwide Dominance

Production numbers continued to soar for the WV Group throughout the 60s and 70s – during which subsidiary company, Audi was formed. But it was in 1982 when the German company took its first step towards what would become a worldwide future. 

Spanish manufacturer SEAT was the first fall under VW’s control, initially signing a cooperative agreement in 1982 before becoming outright owners in 1990. 

2020 Seat Leon

That proved to be a domino effect, and SEAT would go on to become one of eight car companies to fall under the VW Group banner during the following 22 years. 

VW Group’s Subsidiaries

After SEAT came the introduction of Skoda, where the VW Group took hold of a 70% share in 1995. Two years later, Bentley, Lamborghini and Bugatti were acquired, and in 2000, Skoda was fully absorbed by Volkswagen. 

Then, in August 2012, three years after purchasing a 49.9% stake in the company, the VW Group took control of Porsche – making them now an eight-car-manufacturer entity.

Since then, the VW Group has had dealings with Suzuki – where it owned a non-controlling 19.9% share. Although, shortly before the emissions scandal broke in 2015, VW was ordered to return their shares by a court of law. 

The VW Group Today

Despite their beginning, World War II and the emissions scandal – from which they will eventually have paid $30 billion in expenses – the VW Group has continued to both survive and thrive. 

Aside from their hold on the car manufacturing industry, the VW Group also controls five other big-name players in the automotive world: 

  • Ducati
  • Traton
  • MAN
  • Scania 
  • Volkswagen Commercial Vehicles
Ducati motorcycle

It was 2016 when the Group surpassed Toyota as the world’s biggest manufacturer in sales, and they’ve held on to that position ever since. 

Whether they continue to do so remains to be seen. But one thing is for certain, without the Volkswagen Group and its subsidiaries, the automotive industry would not be where it is today. 

Full List of Volkswagen’s Subsidiaries 

  • Audi
  • Audi Sport
  • Lamborghini
  • Bentley
  • Bugatti
  • Porsche
  • Ducati
  • Jetta – A Chinese car marque
  • MAN
  • SEAT
  • Skoda
  • VWCO
  • Volkswagen Commercial Vehicles
  • Volkswagen Cars
  • IAV – 50% share
  • MOIA – Mobility services company
  • Navistar
  • Here – Digital maps – own alongside BMW and Mercedes-Benz

Find Your VW Group Car With Hippo Leasing

Volkswagen | Audi | SEAT | Skoda

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