Prior to its diesel emissions cheating scandal, the Volkswagen Group was focused on reaching the number one spot in auto sales and had even set a date of 2018 as a target. However, the growth at any cost mentality has blown up quite spectacularly in the face of the German auto giant, so now it’s back to the drawing board for the management team which will need to come up with a new set of goals.  

Under the guidance of new CEO Matthias Müller, VW will formulate a new plan dubbed Strategy 2025, full details for which will be announced no later than mid-2016. Müller states that the plan will have five core priorities, with the most vital being the support of customers affected by the diesel scandal. In this regard, VW is still working on technical solutions which it should have ready by January 2016 when the first recalls—approximately 8.5 million vehicles in Europe—are scheduled to start. Worldwide, around 11 million vehicles are affected.

The second priority will be the ongoing investigation into what led to the diesel scandal in the first place. For this purpose, independent audit firm Deloitte has been hired to oversee the investigation. According to Müller, those responsible for what has happened will need to face “severe” consequences. Six manages connected to the scandal have already been suspended, and previously Martin Winterkorn stepped down as CEO.            

The third priority will be the introduction of new structures within the group, which has already has already commenced. As part of this restructuring, some of VW’s many brands will be linked more tightly and new regional hubs with greater autonomy established. The focus will be on addressing cross-brand strategies, leveraging synergies and ensuring that resources are used effectively. Managers will review in detail the group’s current portfolio of more than 300 models and examine the contribution that each one makes to earnings, meaning we’re likely to see some models dropped and other projects scaled back.

The fourth priority will be reshaping VW’s corporate culture to one that is more open and with greater cooperation. Müller explained that staff should also exhibit more courage, greater creativity and a more entrepreneurial spirit in their dealings with one another in the future.

Finally, the fifth priority will be executing a smooth transition from the previous plan to the new Strategy 2025. Until now, many within VW saw sales numbers as the key benchmark, but going forward Müller wants the focus on qualitative growth.

It’s now been almost six weeks since the diesel scandal was made public and the fallout is starting to affect VW’s bottom line. The group posted a 3.48 billion euro ($3.84 billion) third-quarter operating loss on Wednesday, compared with a 3.23 billion euro profit a year ago. The change was due mostly to an impairment totaling 6.7 billion for the scandal.


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