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A report by Morgan Stanley Research concludes that a key part of Volkswagen’s success is low total cost of ownership.
Volkswagen cars driven off Retailer forecourts today cost approximately five per cent less to own than their rivals. Morgan Stanley Research believes several factors are at play.
Partly, it’s a question of the group's size. The report says: “[Volkswagen Group] is using its growing funding cost advantage to effectively subsidize vehicle pricing without hurting industrial margins. Over three years, this can generate a saving of 1,500 euros (or eight per cent) for a buyer driving a mid-range car.”
Volkswagen vehicles also score highly on good residual values – something customers hold dearly. “Depreciation accounts for about 60 per cent of [total cost of ownership]."
The quality and strong brand of Volkswagen vehicles remain largely unmatched in the mass market, which makes them easy to sell on as used cars.
Technology also plays a large part in the company’s success. The report cites the flexible new MQB platform underpinning the forthcoming new Golf as one example of how Volkswagen can build better cars, and build them more efficiently. Of MQB (the building block for several new key models) the report says: “We estimate gross annual savings of 14 billion euros from this toolkit by 2019.”