At anyone time BL made three, four or five engine types of a similar capacity where as VAG make one or two engine types and fit them to five or six different types of car.
1750 Maxi / Allegro
1.8 MGB / Marina
1.8 Princess / Ambassador
1850 Triumph Dolomite
2.0 6cyl Triumph 2000
2.0 16v Triumph Dolomite Sprint
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Also Maxi, Allegro, Marina, Ambassador, Dolomite, Triumph 2000 etc were all totally different platforms where as a Golf, Leon, Octavia, A3 and TT are all based on the same platform, also depending on year Passat, A4, A6, Superb etc.
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VAG produce cars that people want to buy. BL struggled to do so. When they did produce a good design such as the SD1, it was ruined by lousy build quality, atrocious electrics and unreliability.
And that's before we get onto management and unions.
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Forget what happened to BL, different time, different country, different politics.
VAG are interested in market share. If someone buys one of their products be it SEAT, Skoda, Audi or VW then they are not buying Ford, Vauxhall or Peugeot. Market share eventually leads to brand loyalty. Also don't forget the economies of scale. Originally VW may have ordered say a million widgets from a supplier. Now, because so many parts are common across the group, they will be ordering 3 million and thus getting a much larger discount. If the supplier won't give them any extra discount then they have the muscle to go to another supplier who will give them the discount.
Whether they do actually compete in the same sector is a slightly different question. I wouldn't put an Audi in the same sector as say a Skoda. Although the way Skoda are going who knows what the future may hold for them?
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Did BL ever export any of their cars by the way? Apart from the 'export or die' in the 1940s I mean.
VW export to so many countries that they're safe if one market drops a bit.
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VW Group marques' products appeal to different areas of the market.
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What\'s for you won\'t pass you by
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If you read the finance sections of the papers you will see that VW are struggling as their "cost base" is too high for their industry - (Ford & GM are leaders in the field of having Very Overheads related to past employees, pensions, health and poor products/wrong products in some markets does not help).
VW mistakes such as putting lots of money into the Bugatti Veyron do not help nor did the mega investment in a big new "glass factory" to make the Phaeton help. The Bugatti gives publicity the Phaeton did not even sell well........
VW are wanting to reduce their cost base and in doing so jobs in Germany might move east into other parts in even bigger numbers.
If you buy an Audi TT it is made in Hungary, the new Fox is to be brought in from Brazil......... so much for made in Germany.
Porsche has recently upped its % ownership in VW and might be a future owner if the "Price is Right"
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>>so much for made in Germany.>>
VW has manufacturing plants in many parts of the world.
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What\'s for you won\'t pass you by
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If you read the finance sections of the papers you will see that VW are struggling as their "cost base" is too high for their industry - Ford & GM are leaders in the field of having Very Overheads related to past employees, pensions, health...
If VAG's costs are high, surely GM can't be considered a role model. Their bills for employee benefits are so high they've been described by some commentators as a health insurance provider who just happens to make cars too!
As pointed out above, not only do VAG build a minimum of engines and platforms, but they only stock two types of each fitting used across the range to further reduce inventory costs. And they built a total of 35 vehicles on the Golf Mk4 platform!
VW mistakes such as putting lots of money into the Bugatti Veyron do not help nor did the mega investment in a big new "glass factory" to make the Phaeton help.
The halo effect, surely? VAG prove they can build the best, so the favourable impression rubs off on lower models. More cost-effective than sponsoring a motorsport team who, unless they're winning, only reflect badly on the brand.
VW are wanting to reduce their cost base and in doing so jobs in Germany might move east...so much for made in Germany.
Jobs have already moved - but for the Golf, at least, enough work is still done on the car in Germany to ensure it can legally be described as "made in Germany". Sharp practice maybe, but again, hardly indicative of the careless management that saw British Leyland run into the ground.
So, VAG might be feeling the pinch in a competitive market, but they do appear to try hard to manage the situation. Therein lies the important difference between them and the UK's former motor industry.
Besides, Backroomers may argue about the merits of VWs, but when's the last time somebody posted "I mourn for my Austin Montego and wish they still made them" :-)
- Gromit
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Porsche has recently upped its % ownership in VW and might be a future owner if the "Price is Right"
Dont know how you got that idea.
Unless things have changed in germany they have some sort of goverment statute so that vw can never be bought out!!
As for struggling they probably are but im sure they were one of the few european companys that posted a profit.
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Not in the same number VAG do. In some instances, BL had cars unique to some countries, like the P76 in Australia.
See www.austin-rover.co.uk (under 'around the world')
As you'll see, they had a fair few models, but i don't think they were all that popular.
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"Unless things have changed in germany they have some sort of goverment statute so that vw can never be bought out!!"
Good to see one of the founding members of the EU practicing what it preaches.
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Its not allowed under EU law and is being phased out.
So
Porsche bought a stake in VW, and VW have a stake in Porsche. Its a joint poison pill to prevent take over and break up.
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TourVanMan TM < Ex RF >
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I find it hard to imagine VW being taken over, not impossible - but things would have to get very very bad for that to happen. The Germans are not as 'careless' with the ownership of their companies as the British!
As to cars being made outside of Germany - well, VW have had overseas manufacturing plants for many years and were sourcing some parts from Eastern Europe whilst it was still communist. They are truely multinational in that sense - in fact they make a surprisingly large proportion of their vehciles in Germany. Just think about the Japanese - the majority of European market Jap cars are not made in Japan - ditto American market Japanese cars.
'Overheads' aren't the whole story. The Japanese companies have (in Japan) some of the highest wages and overheads in the world - but they still turn a profit because they are very efficient and make cars that sell well with low warranty claims. GM and Ford overheads only look bad because they are not selling enough cars, and the ones that they are managing to sell are being heavily discounted. They also have a high level of warranty claims and any significant warranty work on a vehicle effectively 'writes off' the profit made at sale of the vehicle.
The auto industry is a bit like the semiconductor industry in that the raw materials are relatively cheap but the manufacturing facility and distribution network is expensive. If your 'breakeven' figure is, say, 75% of capacity and you are running at only 65% then that means big losses. Running at 85% means big profits; 100% means massive profits! Any time the plant is idle you are shedding massive amounts of money. This is the position that the US industry has got itself into.
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There were recent reports that VW were having to bring out a Mark 6 Golf two or three years early (in 2008?) because the current one has too high man-hour content. Whilst still profitable, the margins were unacceptable
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Perhaps this is to create a clear gulf between the Golf and its Seat and Skoda Cousins.
If the Golf gets a clear run of 3 years with no direct comparison being able to be made to say an Octavia less people may think that the Octavia is a budget Golf (rightly or wrongly)
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Aprilla as an investment analsyst running billion dollar funds we get access to top managemnt at these companies. All I can say is that of had to have one/two auto stocks in my portfolio then it would be Poursche and Toyota, the rest are crap. The auto industry suffers from a bloated cost base in the US and Europe which the Unions have not realised and also the manufactruing logistis are relatively poor when compared to the likes of Toyota. In addition I think VAG will end up canabalsising thier own brand with the proliferation of models as well as Joe Blogs getting fed up with the poor reliability (in germany VW unlike in the UK is not seen as an up market brand). But the fact of the matter is that the European auto industry is running on bporrowed time, if its not the threat from the Japs the Koreans are also fighting hard. FIAT of Italy is a joke...the latest nonsense was Carlos Ghosin of Nissan stating he wants to take Renault upmarket and improve operating margins...what a joke...
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AH an investment analyst. The nearest thing we have to a human vulture.
The investment business is directly responsible for the fatal short term thinking of UK and US industry.
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TourVanMan TM < Ex RF >
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VAG produce cars that people want to buy. BL struggled to do so. When they did produce a good design such as the SD1, it was ruined by lousy build quality, atrocious electrics and unreliability. And that's before we get onto management and unions.
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Unfortunately very true, also compared to VaG group, BL's penetration of the European/global marketplace was at best patchy.
What VaG Have done is produced 3 or 4 discrete ranges of cars to suit differnt budgets and customer types, but with the master stroke of being able to draw heavily on both 'platform' commonality and engineering components.
I understand that VaG group are the most advanced manufacturer in the World with regard to platform commonality, and in a large Global business the cost-savings of this strategy are enormous.
Plus, I cant help saying I bet their labour relations are a lot better than the best time at BL !!
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