Volkswagen's CSR and Environmental Impact: A Report

Desklib provides past papers and solved assignments. This report analyzes Volkswagen's CSR and environmental impact.

ANALYSING THE CSR IN VOLKSWAGEN

EXECUTIVE SUMMARY
The report comprises the German brand of the automotive industry Volkswagen that has been
gaining popularity with the launch of the hybrid cars. Volkswagen was founded in the year 1937
by the German labour front and recently headquartered in Wolfsburg, Germany. The company
is serving with its automobile products such as the vans while generating the production output
that is 6.073 million dollars and revenue generated by the company is estimated to be €76.729
billion till the year 2017 (Barrett et al., 2015). Volkswagen has the over 117400 employees that
are working in the company and stores of the company that has been spread worldwide. This is
the flagship marque of the parent Volkswagen group that has been the largest automotive
maker in the world. Volkswagen major market in China as it is the nation through which the
higher number of the total sale of the company is generated that is 40% of the total sales of the
company.
1

Table of Contents
EXECUTIVE SUMMARY...................................................................................................................1
INTRODUCTION............................................................................................................................. 3
PROBLEM STATEMENT.................................................................................................................. 5
RESEARCH DESIGN......................................................................................................................... 6
METHODOLOGICAL CHOICE.......................................................................................................6
STRATEGIES................................................................................................................................8
DATA COLLECTION....................................................................................................................... 10
QUALITATIVE RESEARCH..........................................................................................................10
SAMPLING................................................................................................................................11
DATA ANALYSIS............................................................................................................................12
FINDINGS..................................................................................................................................... 13
RECOMMENDATIONS.................................................................................................................. 14
CONCLUSION............................................................................................................................... 15
REFERENCES.................................................................................................................................16
2

LIST OF FIGURE
Figure 1: UK Automotive industry..................................................................................................9
Figure 2: CO2 emission................................................................................................................ 10
Figure 3: CO2 pollution per passenger.........................................................................................12
Figure 4: Transition to the low carbon future..............................................................................14
Figure 5: Hybrid car emissions.....................................................................................................15
3

INTRODUCTION
This flagship company of the German group Volkswagen has been ranked as the third largest
organization in the motor vehicle manufactures industry. The main business of the Volkswagen
group involves the development of the complete vehicles and elements for all the marques
along with the production of the Volkswagen Passengers care and commercial vehicles.
Volkswagen Group has been providing its services all across the globe but the major emphasis
of the group is on the market of Europe (Hotten, 2015). The major competitors of the company
in the automotive industry are Toyota, Ford and Hyundai. Volkswagen mission statement is
fundamentally based on the concept of providing the high standards of the products while
creating an environment that is safe for the individuals.
The mission of the company also consists of raising the productivity of the organization with the
eco-friendly behaviour. There are several kinds of projects that are launched by the company
that is based on protecting the environment from the elements that can harm the atmosphere.
The engineers of the Volkswagen are consistently working on the projects that are related with
the production of the cars that offer superior quality of the performance with the economic
fuel consumption and emissions that are lesser harmful to the environment. For instance, the
blue motion models that are a segment of the development of the resource-efficient vehicles
purpose and the researches that are been conducted for the alternative powertrain
4

technologies for supporting the environmentally sound driving experience. Golf blue motion
that is the product of the Volkswagen is the example of the most fuel-efficient cars from all the
vehicles that are present in the market with the CO2 emissions of approximately about
107g/km (Moravcsik, 2017). In the Business and Biodiversity initiative, the Volkswagen is the
first organization that becomes the part of the event that held in February.
In order to position the company, Volkswagen implements a double marketing technique. This
technique is not about organizing the multiple campaigns but about the working of the
campaigns that convey different kinds of messages simultaneously (Oldenkamp et al, 2016).
The company is concentrated on the assuring the availability of the products while developing
the 44 production sites at the different location of the world. The marketing strategy of the
Volkswagen includes the branding the goods into several segments of the production lines.
The research will consist of the challenges that are confronted by the company in dealing with
the CO2 emission from the vehicles that have been produced by the Volkswagen. It is highly
essential for the companies to develop the strategies that are based on CSR structure of the
company while targeting the individuals that are of the age group 24-45 (Russell et al., 2016). At
the initial stage of the launch of the vehicles, the company has faced several problems due to
the higher amount of the emission that negatively impacted the environment and brand image
of the company in the market. Thus the sales of the company’s product went down due to the
lack of concern towards the environment.
The organisation later realised the importance of the production of the products that are more
environmentally friendly and emits less amount of the CO2. The management of the
organization also initiated various campaigns for spreading the awareness of the usage of the
environment-friendly products among the target age group. Through this, the company earned
knowledge about the demands of the customers along with their attitude towards the
environment-friendly products. This kind of market research is helpful in the betterment of the
quality of the goods and services that are offered to them.
5

In order to accomplish the appropriate outcomes from the research the qualitative method of
the research analysis is taken into account. The sources of this research include the Articles,
journals and the research papers through which the most accurate information about the
subject can be gathered leading to the desired outputs (Whiteman and Hoster, 2015). In this
research, the main problems that are faced by the Volkswagen will be discussed. Other than
this the various approaches that have been utilized by the company for the production of the
environment-friendly products to provide consumers satisfaction will be explained in the
research.
6

PROBLEM STATEMENT
The key problem that is interlinked with the subject of the research is the lack of awareness
among the individuals of age 24-45 about the CO2 emission by the vehicles. In the automotive
industry, it has been observed that the companies are producing the automobiles that are
generating a higher amount of emission. This emission by the vehicles has the tendency to
harm the environment on a large scale (Barth et al., 2018). So, the companies need to focus on
developing the strategies that control the excess amount of the emission that has been done by
the vehicles. This can help the Volkswagen in improving the brand image of the company that
has been affected earlier while impacting the sales of the organization in a positive manner.
7

RESEARCH DESIGN
The research design can be characterized as the structure that is utilized by the researcher for
the integration of the several elements of the research. This is performed in the most logical
manner for handling the research problem effectively.
METHODOLOGICAL CHOICE
The data collection approach that has been implied in the execution of the research and
gathering the information is the secondary data collection technique. This method comprises of
collecting the data that is related to the subject from the other sources that are available to the
researcher. It has been found that the automobile industry has been making remarkable
changes and positive contributions in the areas of the economy and enabled the mobility of
individuals across the globe. But the process that is involved in the production of the products
that are offered by the company has an important environmental influence (Rhodes, 2016).
In order to develop an understanding of the factors that are associated with the harmful
emission and environmental aspects the UK automotive industry has been analysed. The
automotive industry of the UK plays a major role in the economy of the UK with the £82 billion
turnovers along with the £ 20.2 billion value that has been added. The number of individuals
that have been employed in the manufacturing sector has been estimated to be 186000 and
excess of the 856000 in the automotive industry while accounting for over the 12% of the total
export that has been made through the UK and the investment of the £ 3.65 billion has been
made by the automotive each year in the research and development department of the
automotive industry (SMMT, 2016). In the UK there were almost 30 manufactures that have
built the 70 models of the vehicles incorporated by the 2500 component providers and most
talented engineers from all across the globe.
8

Figure 1: UK Automotive industry
Source: SMMT, 2018
The major issue that has been identified by the automotive industry is the changes in the
quality of the air. Manufactures of the automobiles are finding it hard to manage the emission
from the vehicles with the implication of the new model that comprises of the meeting the
standards of the Euro emissions. In the past few years, it has been observed the significant
decrement in the nitrogen oxide emission to about 84% from the year 2000, particulate matter
has reduced to almost to zero while the CO2 emissions are reduced to the zero levels.
The CO2 emissions that are interrelated with the climatic changes have also shown some of the
significant cutting with the introduction of the new vehicles. In the automobile industry of UK
the vehicle, manufacturers have been investing the billions of pounds in the research to
produce the vehicle that is environmental friendly leading to the technological growth through
the advanced cars has been observed in the industry. This new era of the vehicles greatly differs
from the ones that were available in the past in terms of the efficiency that means the motorist
9

are benefiting from the lower fuel bills. The statistical data that has been collected has shown
that the average CO2 emissions have lowered to about 33.1% in the year 2017 as compared to
the 20% lower in the year 2000 (Gov.UK, 2018). Generally, the vehicles that are driven from the
diesel emits the 15% lower CO2 as compared to the petrol but the rise in the year 2017 has
shown the shift of the consumers towards the larger vehicles and reduction in the diesel
registrations.
Figure 2: CO2 emission
Source: SMMT, 2018
Other than this the battery electric vehicles have taken over the 0.5% of the market share,
hybrid cars took over the 1.3% of the share and 2.9% of the share was gained by the
conventional cars till the year 2017. United Kingdom has represented the most challenging and
wide reductions in the CO2 targets involving the plans for the future for decarbonising the
vehicles fleet until the year 2050 (Nakamichi et al., 2016). The purpose of such transformation
in the industry can be attained with the support of the stakeholders coming together for
accomplishing the environmental targets in the manner it is most effective and allowing the
manufacturing industry of the UK to deliver the vehicles that emit the lesser amount of harmful
emissions. For the achievement of these objectives, the UK government has played a major role
in supporting the automobile industry with CO2 reduction approaches. They have introduced
the initiatives such as joint funded advanced propulsion centre and Go Ultra campaign.
10

STRATEGIES
The analysis that has been conducted on the Volkswagen includes the environmental initiatives
that are taken together with the group initiatives to gain the better understanding of them.
Volkswagen publishes the sustainability report every year that shows the environmental
initiative of the company. The sustainability report of the year 2017 is based on the idea of
empowering transformation. Volkswagen group is highly committed to facilitating transparency
to the stakeholders and knowledge about the CSR projects of the company. As is the one of the
greatest industrial organization the Group possesses the specific social responsibility with the
implementation of the creative powers of the company for providing the benefits to the people
and the environment. Each year the company produces over 10million vehicles that give rise to
both positive and negative outcomes. Some of the positive impacts of this are job opportunities
and regional prosperity while the negative elements include the emissions and resource
consumption (Kishita et al., 2016).
The company understands the developing trend of the digitalization that will further lead to the
new problems in the future by the aspects such as securing the data of the consumers with the
implication of the legal and ethical quandaries that are related with the automated driving.
Volkswagen has the agreement with the employees of the industries since the year 2005 that is
the known as Works Agreement on Environmental Protection while in the support of the
production processes that are involved Volkswagen has allotted the 318 brand ambassadors
along with the 196 environmental ambassadors and 122 energy experts (Chu et al., 2018).
There are an environment task force and research team that analyses the overall production
process, workforce infrastructure and evaluates the flow of the energy and resources in the
organization.
11