Volkswagen Group (VOW3) is the world's largest automobile manufacturer, holding its crown for the second straight year after reporting record annual vehicle sales of 10.97 million, edging out Toyota Motor Corp. (TM) for the lead.﻿﻿ The automaker, whose name literally means "people's car," was founded in 1937 by the German government, which at the time was ruled by the the Nazi Party. Despite Volkswagen's origins, the company has grown into a prosperous global auto manufacturer with a reputation for producing high-quality vehicles.﻿﻿ The company posted after-tax earnings of $15.9 billion on total revenue of $286.5 billion in 2019, and has a market capitalization of $75.2 billion.﻿﻿ These Volkswagen financial figures and those in the story below were converted from euros to dollars based on a EUR/USD exchange rate of 1.1342 on 9 June 2020.﻿﻿

The original Volkswagen factory was repurposed upon the outbreak of World War II in 1939 to produce military equipment and vehicles. Despite lying in ruins at the war's end due to Allied bombing, the factory was rebuilt and began mass producing cars. Volkswagen was mostly denationalized with the sale of 60% of its stock in 1960. While Volkswagen's original "Beetle" design with its unusual rounded shape is a classic, the company now produces a broad range of cars, vans and commercial vehicles.﻿﻿ While Volkswagen has a strong reputation for quality, it was tarnished in 2015 after it was discovered that the company had installed software in the diesel engines of its vehicles that would artificially boost results during emissions tests. The scandal resulted in the recall of millions of cars worldwide and the company's first quarterly loss in 15 years.﻿﻿

Volkswagen also has significantly strengthened and broadened its product line through a long list of acquisitions, including manufacturers of luxury sedans, sports cars, budget vehicles, and heavy trucks and buses. We look at 5 of Volkswagen's key acquisitions below. The company breaks out revenue and profit for some acquisitions, but not for others.

Audi

Type of Business: Luxury Auto Manufacturer

Acquisition Price: Not Available

Acquisition Date: 1965 ﻿ ﻿

﻿ Annual Revenue (2019): $63.2 billion ﻿ ﻿

﻿ Annual Profit (2019): $4.5 billion ﻿ ﻿

Luxury vehicle manufacturer Audi has a complex history that goes all the way back to the late-19th century. In 1899, August Horch founded a car company in Germany. Ten years later, Horch started a new automobile company named Audiwerke AG, Zwickau, marking the origination of the modern company's name.﻿﻿ In 1932, four separate German automobile manufacturers--Audi, DKW, Horch, and Wanderer--which are symbolized by the four rings in the company's current logo, merged to form Auto Union AG.﻿﻿ Auto Union was subsequently acquired by Volkswagen from Daimler-Benz, and was later merged with another company to form Audi.﻿﻿ The acquisition, Volkswagen's first of many, provided the company with an automaker that has become one of the world's premium luxury brands.﻿﻿

Porsche

Type of Business: Sports Car Manufacturer

Acquisition Price: $5.8 billion (49.9% stake); ﻿ ﻿ $5.6 billion plus one VW common share (50.1% stake) ﻿ ﻿

﻿ $5.6 billion plus one VW common share (50.1% stake) ﻿ Acquisition Date: Dec. 7, 2009 (49.9% stake); ﻿ ﻿ July 5, 2012 (announcement date for 50.1% stake) ﻿ ﻿

﻿ July 5, 2012 (announcement date for 50.1% stake) ﻿ Annual Sales Revenue (2019): $32.3 billion ﻿ ﻿

﻿ Annual After-Tax Profit (2019): $3.2 billion ﻿ ﻿

The Porsche brand of sports cars was born in 1948 when the first vehicle carrying the Porsche name was constructed.﻿﻿ Co-founder Ferdinand Porsche, who had previously established an independent design and engineering firm, originally was responsible for the design of the Volkswagen Beetle.﻿﻿ Porsche has become a premium sports car brand, designing classic models such as the 911, 964 Turbo, and Carrera GT.﻿﻿ The acquisition has enriched Volkswagen's portfolio with one of the world's legendary sports car brands.

Škoda

Type of Business: Budget Automobile Manufacturer

Acquisition Price: 620 million Deutschmarks (initial 31% stake); ﻿ ﻿ Price of remaining stake: NA

﻿ Price of remaining stake: NA Acquisition Date: 1991 (initial 31% stake); May 30, 2000 (remaining stake) ﻿ ﻿

﻿ Annual Sales Revenue (2018): $17.8 billion (CZK/USD = 0.0427 as of 9 June 2020) ﻿ ﻿ ﻿ ﻿

﻿ ﻿ Annual Profit (2018): $1.2 billion (CZK/USD = 0.0427 as of 9 June 2020) ﻿ ﻿ ﻿ ﻿

Škoda, one of the oldest car manufacturers in the world, has its origins in a bicycle factory set up in the Czech city of Mladá Boleslav in 1895. Ten years later, the factory began producing a new form of transport called the car. The company was later taken over in 1925 by engineering and manufacturing firm Škoda Pilsen. Following Czechoslovakia's Sovietization after WWII, the company was brought under state control and produced cheap cars. Not until the collapse of the communist bloc in 1989 did Škoda gradually become privatized.﻿﻿ Volkswagen acquired an initial 31% stake in the company in 1991 and would become Škoda's sole owner in May 2000.﻿﻿ The acquisition adds a budget brand to Volkswagen's lineup.

Scania

Type of Business: Commercial Vehicle Manufacturer

Acquisition Price: $1.6 billion (initial 18.7% stake of capital and 34% of voting rights); ﻿ ﻿ approx. $9.6 billion (remaining stake) ﻿ ﻿

﻿ approx. $9.6 billion (remaining stake) ﻿ Acquisition Date: Mar. 27, 2000; ﻿ ﻿ May 13, 2014 (remaining stake) ﻿ ﻿

﻿ May 13, 2014 (remaining stake) ﻿ Annual Sales (2019): $16.7 billion (SEK/USD = 0.1080 as of 9 June 2020) ﻿ ﻿ ﻿ ﻿

﻿ ﻿ Annual Profit (2019): $1.3 billion (SEK/USD = 0.1080 as of 9 June 2020) ﻿ ﻿ ﻿ ﻿

Scania, one of the first companies in the world to begin manufacturing commercial vehicles, was founded in Sweden in 1891.﻿﻿ It has since become one of the world's leading producers of heavy trucks and buses. Volkswagen acquired its initial stake in Scania in 2000 and gradually increased its ownership with subsequent share purchases. By 2014, Volkswagen had acquired 90% of Scania's shares.﻿﻿ The acquisition of a commercial vehicle manufacturer Scania significantly diversified Volkswagen's sales base in the global vehicle market.

Lamborghini

Type of Business: Luxury Sports Car Manufacturer

Acquisition Price: $111 million (estimated) ﻿ ﻿

﻿ Acquisition Date: 1998 ﻿ ﻿

Volkswagen went on a sports car company buying spree in 1998, first scooping up Lamborghini. During that year, it also paid $790 million for Bentley, and an estimated $50 million for Bugatti.﻿﻿ ﻿﻿ All three were bought as the automaker was making a big push into both the luxury and premium sports car market.

Volkswagen Diversity & Inclusiveness Transparency

As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Volkswagen’s commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how Volkswagen reports the diversity of its management and workforce. This shows if Volkswagen discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.