Under new management Volkswagen will aspire to refresh the brand’s partly tainted image and ramp up profitability as top priority. Herbert Diess, Volkswagen Group’s newly appointed CEO has a huge business agenda which includes the above besides coping with the challenges resulting due to rapid changes affecting the auto industry as a whole.
It’s not surprising that VW’s board and stakeholders have high hopes from the 59-year-old ex-BMW executive who has a reputation for delivering on his restructuring targets.
In an interview shortly after assuming office, Diess said that he would “review all options” when looking at different assets in VW’s multibrand portfolio. He later clarified that this could mean selling certain operations, if deemed necessary.
Volkswagen Group’s new organisational structure proposes to decentralise and group it into six divisions, as well as having a specialist China-focused group. It will categorise 12 brands into three groups: “volume,” “premium,” and “super-premium.”
Volkswagen’s “super-premium” group is to include sports car brands Porsche, Bentley, Bugatti and very likely, Lamborghini. The “premium” segment will hold Audi at its core.
The volume business will include the VW brand, Seat and Skoda, as well as light commercial vehicles. The truck and buses unit is to be separated as part of a “planned preparation for capital market readiness.”
The fate of Ducati hasn’t been spelled out as of now.
On the business front, Volkswagen wants to reverse its faltering fortunes in North Amercia in particular because it hasn’t posted a profit in that market in the last 15 years.
Globally, Volkswagen vies for the title of world’s largest automaker, but in the US, the group ranks eighth. All the group’s brands combined sold just 625,068 vehicles in the US last year, less than half the volume moved by the South Korean duo of Hyundai-Kia.