What is the Product Life Cycle Analysis of Volkswagen?
4 Answers
Volkswagen's product life cycle is seven years. Lifespan of Volkswagen engines: The lifespan is at least 500,000 kilometers. Volkswagen's future development: Volkswagen will accelerate the development and production of its software and processors in the future. Currently, what hinders production in the automotive industry is not the manufacturing of mass-produced products, but the design of high-performance processors. The production of chips is also a bottleneck. Due to the impact of the pandemic, the demand for PCs, home appliances, and smartphones has surged, leading to supply issues for relatively lower-performance automotive chips. This chip shortage phenomenon is expected to last for two to three years.
The product life cycle analysis of Volkswagen is quite fascinating. Take the classic Golf model, for example—its evolution from one generation to the next is like telling a story. At launch (introduction phase), the new Golf is released, and fans rush to buy it, though sales may start modestly. Then comes the growth phase, where word-of-mouth spreads, and sales skyrocket to their peak, like the explosive popularity of the seventh generation. During the maturity phase, the market becomes saturated—everyone has one—and sales stabilize but competition intensifies, often revolving around features and pricing. Finally, the decline phase kicks in; as the eighth generation approaches, sales of the older model drop, and the brand gradually phases it out for the next iteration. This entire cycle averages about 5 to 8 years, heavily influenced by technological updates and environmental regulations. I’ve also noticed that Volkswagen’s ID electric vehicle series might have an even shorter life cycle due to rapid tech iterations, with each phase introducing new feature upgrades, which is quite appealing.
Having driven Volkswagen cars for decades, I believe the product life cycle is a history of rise and fall. Take the Beetle as an example: in its early introduction phase, it was immensely popular, loved worldwide for its unique design; during the growth phase, sales skyrocketed, making it an icon; the maturity phase lasted decades with stable sales, but later consumers grew tired of the outdated design, leading to declining sales and entering the decline phase, ultimately resulting in discontinuation. Now, Volkswagen is transitioning to ID electric vehicles, and the life cycle has become shorter due to faster technological advancements. Each phase is closely tied to market demand: launching a new car involves high risks and significant investment; profits stabilize after reaching the peak, but during the decline phase, promotions are needed to clear inventory. This affects how long we owners can use our cars—my old Tiguan started requiring more repairs after six years, clearly indicating it was time for a model refresh. Experience tells me that buying a new Volkswagen right before its peak phase ensures better resale value.
From an economic perspective, the lifecycle of mass-market automotive products is divided into four stages. The introduction phase involves high investment and low sales, resembling a loss-making venture, such as the initial launch period of the new ID Buzz. The growth phase sees a surge in sales, with profits skyrocketing like the seventh-generation Golf. The maturity phase is stable but faces market saturation, relying on promotions to sustain. The decline phase witnesses sales dropping until the product exits the market. This cycle typically lasts 5 to 10 years, influenced by consumer trends and regulations, such as environmental standards accelerating the decline of fuel-powered vehicles. Analysis shows that Volkswagen's strategy often extends the maturity phase through upgraded versions to prolong lifespan, but global competition and the impact of electric vehicles have shortened the overall lifecycle. This significantly affects the company's cash flow and also reminds us to avoid models in the decline phase when choosing a car.
