Reports coming out of Germany tell us that Volkswagen is set to change the corporate structure under which it operates. It appears that following the fallout after the toppling of former chairman Ferdinand Piech, his strategy of each individual brand having autonomy to compete with other group brands etc has also gone by the wayside.
Going forward, reports say that there will be four divisions (holding companies). The first will contain the large volume passenger car brands of Volkswagen, Skoda and Seat. Newspaper reports highlight the biggest issue with this unit is the high production costs associated with German plants for Volkswagen passenger car brands and other volume components for group products, and how this might be reformed, as they push to be the top (by volume) carmaker in the world.
The plan is for the remainder of the group’s 12 brands are divided in to the other three holding companies as follows: Porsche, Bentley and Bugatti in one; Audi, Lamborghini and Ducati brands in another; and Volkswagen Commercial vehicles, plus Scania and MAN heavy trucks will form the fourth.
The German business daily newspaper Handelsblatt reports that: “Many industry watchers said Piech made VW Group difficult to control and slow to react to market changes.
The new structure is designed to improve efficiency and make decision-making quicker, Handelsblatt said. The head of each holding company will sit on VW Group’s management board. Group roles such and the groupwide head of sales and marketing position held by Christoph Klingler would be eliminated”.
The Group operates 119 production plants in 20 European countries and a further 11 countries in the Americas, Asia and Africa. Every weekday, 592,586 employees worldwide produce nearly 41,000 vehicles, and work in vehicle-related services or other fields of business. The Volkswagen Group sells its vehicles in 153 countries.
The Volkswagen Group with its headquarters in Wolfsburg is the largest carmaker in Europe. In 2014, the Group increased the number of vehicles delivered to customers to 10.137 million (2013: 9.731 million). The share of the world passenger car market amounts to 12.9 percent.
In Western Europe, more than one in four new cars (25.1 percent) is made by the Volkswagen Group. Group sales revenue in 2014 totaled €202 billion (2013: €197 billion), while profit after tax amounted to €11.1 billion (2013: €9.1 billion).