The effect of economic crisis to the marketing strategy of Volkswagen Literature review - 3

The effect of economic crisis to the marketing strategy of Volkswagen in Asian market. The case of Vietnam - Literature review Example In addition to that, the report will also provide some recommendation regarding how the company can deal with the issue. According to Dicken (2007), the automobile industry is adjudged to be one of the most globalised industrial sectors in the world. Similarly, in Vietnam automobile sector is a booming. The major automobile companies operating in the market of Vietnam are Daewoo, Daihatsu, Ford/Mazda, Daimler Benz, Hino Motors, Isuzu, Mekong, Mitsubishi, Nissan, Toyota, Truong Hai and Volkswagen (Ohno and Cuong, 2004). These companies manufacture car of different shapes, sizes, designs and categories (Sturgeon, 1998). According to reports, Truong Hai is the market leader in the automobile sector of Vietnam with a market share of 28.9 %. Next to Truong Hai, Toyota holds 27 % of the market share. The report also pointed out that the overall sales of cars in Vietnam fell by 2 % in the year 2011 thereby reflecting a falling demand of vehicles (ResearchAndMarkets, 2012). In addition to this, due to the Thai flooding the manufacturing process had been also disrupted. Apart from the natural calamities, one o f the major reasons of reducing demand of commercial cars in Vietnam is the global economic crisis. As a result, companies are forced to cut down their operating cost and create a balance between the net income and net cost. Similarly, in case of Volkswagen, the demand of their cars in Vietnam has also reduced substantially. Due to the reducing demand for their cars, the company also reduced the costs pertaining to various operations. Moreover, the global economic downturn also had a substantial impact in the marketing strategy of the company (Volkswagen: Annual Report, 2011). Now in order to uncover, how and in what ways the economic downturn has affected the company, a primary research has been carried out. The findings from the study are presented below. The first research question of the study is related to the