Volkswagen group’s new CEO Martin Winterkorn is instilling a new strategy that will see the VW brand shift away from being a volume seller towards becoming a more up-market niche manufacturer. Automotive News reports the new positioning of the company, combined with delays from the redesign of some models, has financial analysts worried the German giant will have to downgrade its initial pretax-profit targets.

Insiders have told reporters the move is a complete turn-around to the original plans of former CEO Bernd Pischetsrieder, which would have seen VW launch 10 different models, including the Scirocco and Passat models as well as the Tiguan medium SUV before 2008. Winterkorn has outlined in an internal VW magazine that there are even more models which could be created and VW intends to fill "lucrative market niches."

Since stepping in as the company’s head, Winterkorn has changed most of VW's product plans including requesting VW group design chief Walter de' Silva to change the design of the next-generation Golf and Scirocco and cancelling the debut of a Passat-based coupe at the upcoming Geneva Motor Show. An insider has also mentioned that management considered cancelling one of the Passat coupe, Scirocco and Tiguan models but decided not to as the projects were too far into the development process.

With its new models, VW will target customers of premium brands such as Mercedes-Benz instead of competing against the high-volume Asian carmakers. Part of the reason for the change comes from the fear that pushing for volume and lower costs would damage VW's higher-than-average residual market values. However, industry analysts are concerned the changes and subsequent product delays will create financial shortfalls, and that the product timing change will result in more capital expenditures and an unrealistic profit target, which stands at €5.1 billion for 2008.

Both the Iroc and Tiguan concepts have received very positive responses from the press and potential customers alike, and it would be a pity to see the production models differ too greatly from them. We'll have to wait and see what direction the new design changes take.