Performance Analysis

1 January 2017

In 2010, the global economy had shown a slight recovery from the downfall of previous year, despite the expiry of government economic stimulus programs in many countries. The continued expansionary monetary policy and the rapid growth expansion in the emerging markets led to above-average growth of the global economy.

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High-export countries such as Germany benefited from the double-digit growth of global trade. The automotive industry as a whole recovered from previous year’s financial and economic crisis and riding on this upstream Volkswagen Group successfully strengthen its market position setting a new milestone with its output exceeding the seven million mark for the first time, an impressive increase of 13. 7% vehicle deliveries.

Basically, the Volkswagen Group is subdivided into two divisions which is Automotive Division that focus on the development of vehicles and engines, the production and sale of passenger cars, commercial vehicles, trucks and busses and the genuine parts business while the Financial Services Division’s provides financial solutions to its clientele such as dealer and customer financing, leasing, banking, insurance activities and lastly fleet management. Performance In year 2010, Volkswagen Group recorded an increased in unit sales of 15. 4% year-on-year to 7. 3 million vehicles while sales revenue was up by 20. 6% to €126. 9 billion.

Furthermore, the Western Europe counter-parts have yet to redeem themselves from the 2008 financial crisis contributed to the slowdown. Although there is also an increase in sales in Europe or remaining markets, especially because of the rapid new car registration in Russia, it was not sufficient to offset the overall decay in sales revenue for the region. Meanwhile for North America, unit sales of group vehicles was 0. million and the sales revenue improved by 33. 3% to €15. 2 billion. In South America, with a growth rate of 7. 5% in Brazil and 8. 3% in Argentina, the group sold 0. 9 million units far exceeding the previous year’s figure by 9. 7%. Judging from the figures mentioned earlier, in seems that the automotive industries in established markets were heavily supported by government economic stimulus programs in 2010.

In the case of Volkwagen Group, the incentives provided by their home country was the main catalyst behind their strong surge in sales during the financial turmoil allowing them to improve their market share in the small vehicles segment. Besides political help, the weakening of the euro in 2010 strengthens the income proceeds generated from abroad. Hence, in order to ensure its business remains profitable, Volkswagen Group would continue to strenghten their foothold in developing nations such as China, India, Russia and Brazil where growth opportunities are still present.

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