Best Brand Equity Brand Positioning within Volkswagen Group to reach the targets of Together 2025+
December 2020 Disclaimer
The following presentations contain forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. These assumptions relate in particular to the development of the economies of individual countries and markets, the regulatory framework and the development of the automotive industry. Therefore the estimates given involve a degree of risk, and the actual developments may differ from those forecast. The Volkswagen Group currently faces additional risks and uncertainty related to pending claims and investigations in a number of jurisdictions in connection with findings of irregularities relating to exhaust emissions from diesel engines in certain Volkswagen Group vehicles. The degree to which the Volkswagen Group may be negatively affected by these ongoing claims and investigations remains uncertain. The recent outbreak of COVID-19 (commonly referred to as coronavirus) has negatively impacted and may continue to impact economic and social conditions in some of Volkswagen's primary markets, including China and Europe, as public, private, and government entities implement containment and quarantine measures. The continued spread of COVID-19 may cause shortages of necessary materials and parts from suppliers directly or indirectly affected by the outbreak and may cause operational disruptions and interruptions at Volkswagen's production facilities, leading to significant production downtimes A negative development relating to ongoing claims or investigations, the continuation of COVID-19, an unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, and trade disputes among major trading partners will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates in particular relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech koruna. If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements. We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superseded. This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities. # Brand Positioning within the Volkswagen Group
AGENDA
PROJECT FRAMING: BEST BRAND EQUITY
OUR VOLKSWAGEN GROUP BRAND IDENTITIES PROJECT FRAMING: BEST BRAND EQUITY
We are convinced that we have a strong Investment Proposition
Shaping mobility – . Strong brands with clear positioning and great products that inspire customers for generations to come. . A leading position in China with global footprint and value creating growth . Fully committed to "Go to Zero" and shaping e-mobility . Transforming to one of the leading automotive software players . Taking complexity out and pushing for industry-leading economies of scale . Delivering on demanding financial targets and committed to dividend pay out ratio
Unleash value
Integrity as the foundation of a successful business PROJECT FRAMING: BEST BRAND EQUITY
In 2020 only the VW Group and LVMH have 3 of their brands within Interbrand's Top 100 Best Global Brands ranking
Brand equity 2020 (€ Mrd., Interbrand)
Automotive Consumer Goods
Apple Toyota Daimler BMW VW Honda Hyundai Coca Cola LVMH P&G Nestle AbInBEV # brands in 1 1 1 2 3 1 2 1 3 2 2 2 Top 100 Total # 32 5 10 5 13 4 5 >500 70 65 >2k >500 brands1
Note: Exchange rate 1 EUR = 1,15 USD; 1) Consumer facing brands; 2) Acquisition of >100 further software and service companies Source: Interbrand Best Global Brands Ranking 2019 PROJECT FRAMING: BEST BRAND EQUITY
Our new strategic framework: The Brand Strategy NAVIGATOR All layers of the pyramid contribute to brand equity
The Brand Strategy NAVIGATOR is continuously applied across all brands and regions globally
How to maximize share of profit Customer Segments & (Future) profit pools pools
Centrally driven, 1 Streamlined brand portfolio with inputs of Ideal Volkswagen brand portfolio 2030 brands with clear roles 2 Driven by brands Distinct brand positioning with along centrally 3 Vision, mission, brand values defined guidelines limited overlaps
Foundation 4 Differentiated product portfolio, (Target) customer oriented product design design and services 5 Effective brand strategy Governance model process and governance PROJECT FRAMING: BEST BRAND EQUITY
The Brand Strategy Navigator enables us to “speak one language” in our Multi-Brand Strategy implementation
Roll-out Brand Strategy NAVIGATOR Regional Roll-out Best Brand Equity
for all VW Group brands 2019 2020/2021 Coming…
EU5 China Russia Middle East Rest of World USA Brazil South Africa Transfer of Customer Vehicle Demands into SIGMA Milieus via NCBS data „Key“
Customer Vehicle Demands Demographic characteristics Clustering according to joint car demands Clustering according to life stages
1 rational 2 3 emotional 1 young 2 3 mature
Customer Vehicle Demand Spaces (CVDS) SIGMA Milieus
Social status
Value orientation
Traditional Modern Post-modern
NCBS: New Car Buyer Study SIGMA SENSOR: The values, living environments and lifestyles of our customers can be globally described in their social milieus
Example: Europe
Customer segmentation with SIGMA Milieus
Social status
upper Upper Upper Conservative Social Liberal Climber Socio- Traditional Critical Post-modern Mainstream
Progressive Modern medium Mainstream Conventional Modern Traditional Mainstream Blue Collar
Pragmatic Strivers low Value orientation
Traditional Modern Post-modern
Source: SIGMA Sensor Europe 2019 SIGMA SENSOR: The values, living environments and lifestyles of our customers can be globally described in their social milieus
Source: SIGMA Sensor USA 2019 Source: SIGMA Sensor China 2019 In EU5, the Volkswagen Group Multi-Brand Strategy is targeting lower overlap and maximum profit pool exploitation
EU5 Strategic Target Positioning
Social Status upper
middle
lower Value orientation
Traditional Modern Post-modern Same logic of the Multi-Brand Strategy is applied in China and NAR
Strategic Target Positioning Strategic Target Positioning
Social Status Affluent Established High Progressives Elite Accomplished Builders Upper Creative middle Elite Aspirers Traditional Middle Middle New Middle Americans Americans Young Hedonists
Low Pragmatic Strivers
Traditional Modern world Postmodern world Value orientation Value orientation In EU5, Audi e-tron enhances the rather conservative / traditional Audi brand perception and further improves in postmodern attributes
EU5
SIGMA Image Sensor Europe 2020 SIGMA Image Sensor Europe 2020
Question: What is your personal overall impression of the following car brand. Multiple answers allowed. Base: Image Sensor Europe 2020 In EU5, Porsche E-Performance contributes to the emotional EV brand perception
EU5
SIGMA Image Sensor Europe 2020 SIGMA Image Sensor Europe 2020 Porsche E-Performance
Question: What is your personal overall impression of the following car brand. Multiple answers allowed. Base: Image Sensor Europe 2020 Since launch in 2019, the new electric VW ID sub-brand already „pulls“ the Volkswagen brand into important future image territory
Image Sensor Europe 2020 Volkswagen ID EU5 Social Status Social Status
Sets trends in Has a great future Has a great future Sets trends to Sets trends to Sets trends in High-end alternat. drive tech Excellent High-end automated driving alternat. drive tech Shakes up the Excellent automated driving Shakes up the Upper Safe Upper service Sets trends automotive market Safe service automotive market Elegant Technologically Innovative Elegant Technologically Innovative Sets trends Upper Upper in car design Top quality in car design Reinvents the Top quality advanced Reinvents the advanced Environmentally Middle Environmentally Middle Luxurious automobile Luxurious automobile Has a Is a new friendly Sophisticated Has a Is a new friendly Sophisticated Prestigious interpretation Prestigious interpretation longstanding High level Responsible Distinctive Offers cars longstanding High level Responsible Distinctive Offers cars tradition of comfort of luxury with a soul tradition of comfort of luxury with a soul Successful Sets trends for Passionate Successful Passionate Aggressive Leads in new modes Aggressive Sets trends for Leads in new modes of integration integration Middle Dynamic of mobility/sharing Middle Dynamic mobility/sharing and connectivity and connectivity Middle New ways of Middle Traditional Trustworthy Sporty Traditional Trustworthy Sporty New ways of Offers cars for Offers cars for sales and the IT-generation sales and the IT-generation customer relations customer relations Reliable Fun to drive Reliable Fun to drive Cool Family Offers Cool Family Offers oriented Is ‘in’ oriented cute cars Is ‘in’ Youthful Lower cute cars Youthful Functional Sexy Lower Functional Sexy Middle Middle Value for money Value for money
Economical Lower Economical Lower
Traditional Modern World Postmodern World Traditional Modern World Postmodern World Status, Property, Self-indulgence Subjectivism & Community Status, Property, Self-indulgence Subjectivism & Community "To preserve & to defend" "To have, to consume and to indulge" "I and We" Value Value
"To preserve & to defend" "To have, to consume and to indulge" "I and We" Orientations SIGMA Orientations SIGMA Postmaterialism: "To be and to share" Postmaterialism: "To be and to share"
Social Status Social Status Social Status Social Status Sets trends to Sets trends in Has a great future Sets trends in Has a great future Sets trends to Sets trends in Has a great future Sets trends to Sets trends in Has a great future Excellent High-end automated driving alternat. drive tech Shakes up the Sets trends to Upper Safe Excellent High-end automated driving alternat. drive tech Shakes up the Excellent High-end automated driving alternat. drive tech Shakes up the Excellent High-end automated driving alternat. drive tech Shakes up the service Elegant Technologically Innovative Sets trends automotive market Upper Safe Upper Safe Upper Safe service Sets trends automotive market service Elegant Innovative Sets trends automotive market service Elegant Innovative Sets trends automotive market Upper Top quality in car design Reinvents the Elegant Technologically Innovative Technologically Technologically advanced Environmentally Upper Top quality in car design Top quality in car design Top quality in car design Reinvents the Luxurious automobile advanced Reinvents the Upper advanced Reinvents the Upper advanced Middle Has a Is a new friendly Sophisticated Middle Luxurious Environmentally Luxurious Environmentally Luxurious Environmentally Has a Is a new friendly Sophisticated automobile Middle Has a Is a new friendly Sophisticated automobile Middle Has a Is a new friendly Sophisticated automobile longstanding High level Prestigious interpretation Distinctive Offers cars Responsible longstanding Prestigious interpretation longstanding High level Prestigious interpretation longstanding High level Prestigious interpretation tradition of comfort of luxury with a soul High level Responsible Distinctive Offers cars Responsible Distinctive Offers cars Responsible Distinctive Offers cars Successful Sets trends for Passionate tradition of comfort of luxury with a soul tradition of comfort of luxury with a soul tradition of comfort of luxury with a soul Aggressive Leads in new modes Successful Sets trends for Passionate Successful Sets trends for Passionate Successful Sets trends for Passionate integration Aggressive Leads in new modes Aggressive Leads in new modes Aggressive Leads in new modes Middle Dynamic of mobility/sharing integration integration integration and connectivity Middle Dynamic of mobility/sharing Middle Dynamic of mobility/sharing Middle Dynamic of mobility/sharing Middle Sporty New ways of and connectivity and connectivity and connectivity Traditional Trustworthy Offers cars for Middle New ways of Middle New ways of Middle New ways of sales and Traditional Trustworthy Sporty Traditional Trustworthy Sporty Offers cars for Traditional Trustworthy Sporty Offers cars for the IT-generation Offers cars for sales and sales and sales and customer relations the IT-generation the IT-generation the IT-generation Reliable Fun to drive customer relations customer relations customer relations Family Offers Cool Fun to drive Fun to drive Fun to drive Reliable Family Cool Reliable Family Cool Reliable Family Cool oriented Is ‘in’ Youthful Offers Offers Offers cute cars Is ‘in’ Is ‘in’ Lower Functional Sexy oriented cute cars Is ‘in’ Youthful oriented cute cars Youthful oriented cute cars Youthful Lower Lower Sexy Lower Sexy Middle Functional Sexy Functional Functional Value for money Middle Middle Middle Value for money Value for money Value for money
Lower Economical Lower Economical Lower Economical Lower Economical
Traditional Modern World Postmodern World Traditional Modern World Postmodern World Traditional Modern World Postmodern World Traditional Modern World Postmodern World Status, Property, Self-indulgence Subjectivism & Community Value "To preserve & to defend" Status, Property, Self-indulgence Subjectivism & Community Orientations "To have, to consume and to indulge" "I and We" "To preserve & to defend" Value
Status, Property, Self-indulgence Subjectivism & Community Value Status, Property, Self-indulgence Subjectivism & Community Value "To have, to consume and to indulge" "I and We" "To preserve & to defend" "To preserve & to defend"
"To have, to consume and to indulge" "I and We" Orientations "To have, to consume and to indulge" "I and We" Orientations Orientations SIGMA Postmaterialism: "To be and to share" SIGMA Postmaterialism: "To be and to share" SIGMA Postmaterialism: "To be and to share" SIGMA Postmaterialism: "To be and to share"
Question: What is your personal overall impression of the following car brand. Multiple answers allowed. Base: Image Sensor Europe 2020 Volkswagen Group is well represented in the upper SIGMA groups, however, further profit pool potential within the traditional groups will be exploited
Example: Europe EU5
Profit-Pools EU5 VW Group Index (segment share vs. market share)
Social Profit index Social Status Status
Value Orientation Value Orientation Brand Territories ensure an ideal differentiation for all Volkswagen Group brands within the new “Customer Vehicle Demand Spaces (CVDS)”-Tool
FLEXIBILITY & PRACTICABILITY TECHNOLOGY & INNOVATION STATUS & DIFFERENTIATION EU5
Vehicle Functionality-seeking Self-rewarding Image-seeking transaction prices (in €) Y F M Y F M Y F M
high
low Brand Territories ensure an ideal differentiation for all Volkswagen Group brands within the new “Customer Vehicle Demand Spaces (CVDS)”-Tool
Vehicle Rational Functional Status-driven Self-expressive transaction prices (in RMB) Y F M Y F M Y F M Y F M
high
low EXAMPLE: With the CVDS Tool, the VW Passat and Skoda Superb are systemtically differentiated based on clear customer research
EU55
Functionality-seeking Self-rewarding Image-seeking Listenpreise Youngsters Families Matures Youngsters Families Matures Youngsters Families Matures
high Vehicle Standards B-Segment Vehicle Standards B-Segement • Flexibility & versatility • Safety (simply clever solutions) • Intelligent technologies • Good value for money (e.g. in-car office and connectivity)
Mission Mission “VERSATILE FAMILY ESTATE “INTELLIGENT FAMILY ESTATE clever, flexible – with Skoda DNA” comfortable & safe”
B-Segment
B-Segement
low Volumen-Verteilung der Kundencluster
Source: SENSOR EU5, 2018/2019 EXAMPLE: With the CVDS Tool, the VW Passat and Skoda Superb are systemtically differentiated based on clear customer research
EU55
Functionality-seeking Self-rewarding Image-seeking Listenpreise Youngsters Families Matures Youngsters Families Matures Youngsters Families Matures
high Vehicle Standards B-SegmentClearSuperb differentiationVehicleFahrzeuganforderungenStandards basedB-SegementPassaton 3 dimensions: • Felxibility & versatility • SafetySicherheit (simply clever solutions) 1 • IntelligentIntelligente technologies Technologien2 3 • Good value for money (e.g.(z.B. in-car office undand connectivityConnectivity)) Price• Komfortfeatures Design Equipment Mission Mission Mission “VERSATILE FAMILY ESTATE “INTELLIGENT FAMILY ESTATE clever, flexible – with Skoda DNA” comfortable & safe”
B-Segment
B-Segement
low Volumen-Verteilung der Kundencluster
Source: SENSOR EU5, 2018/2019 Ideal coverage of all price segments: example price class analysis Passat Estate vs. Superb Estate
Target Picture Market Volkswagen Group
B Estate B Estate
Sales Sales Passat price price
Superb
Volume Premium
Vehicle sales Vehicle sales # Brand Positioning within the Volkswagen Group
AGENDA
PROJECT FRAMING: BEST BRAND EQUITY
OUR VOLKSWAGEN GROUP BRAND IDENTITIES OUR BRAND IDENTITIES
Holistic approach by transferring Brand ID into Brand and Design Identity and visualizing in 360° Customer Experiences (CX Cockpit), transcribed into specific design guidelines
Brand ID Card Design Criteria/DNA Design Guidelines
Each brand defines Brand ID Development of unique Brand Design Guidelines to ensure a incl. brand purpose, vision and Design by archetypical design coherent 360° customer mission inspiration experience Porsche – Brand Model "ID Card"
Porsche – Brand Model "ID Card" MISSION BRAND CONCEPT
“In the beginning I looked around and could not find the car I dreamed of. So I decided to build it myself.”
Ferry Porsche
VISION
The brand for those who follow their dreams. WHAT WE STAND FOR.
April 2019 24 Porsche Brand Design Criteria Guidelines („1.0“) Shape Look & Feel Interaction Stories
Tone of Voice Space Material Cooperation OUR BRAND IDENTITIES
The examples show how the target picture for a brand identity looks like and how a brand and its values can be created if consistently managed AUDI
Brand ID Card Customer Experience (CX-) Transfer Cockpit
2 New “Orchestration”: The VW Group has taken over a new steering and systematic global management role within the new Multi-Brand Strategy collaboratively with all brands
2