Volkswagen Group To Be Reorganized, Four Smaller Structures Possible: Report

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The Volkswagen Group controls more than a dozen brands and has more than half a million employees around the globe. Understandably, such complexity is difficult to oversee from a central hub which is why we may see the automaker’s management and corporate structure reorganized into four separate units.

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Germany’s Handelsblatt newspaper citing company sources is reporting that the VW Group may be transformed into four separate holding companies. One unit would be in charge of mainstream brands Volkswagen, Skoda and Seat, and led by former BMW executive Herbert Diess.

Audi together with its own subsidiaries Lamborghini, Ducati and design house Italdesign Giugiaro would form another unit, while Porsche together with ultra-luxury brands Bugatti and Bentley would form a third unit.

The fourth and final unit would be made up of commercial vehicles brands VW Commercial Vehicles, Scania and MAN, according to the report.

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The reorganization is said to be VW Group CEO Martin Winterkorn’s master plan for the company, which is on track to become the number one automaker in terms of volume but is still suffering from rising costs, poor sales of the core VW brand in the U.S. and parts of Asia and, to some degree, a growing lack of differentiation among some of the brands. Some of these issues are believed to have led to former chairman Ferdinand Piech recently making public his displeasure with Winterkorn, though Piech’s strategy backfired on him and he was subsequently ousted from the board.

Stay tuned for an update.

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