Volkswagen Forges New Auto Union Through Reorganization

Cameron Aubernon
by Cameron Aubernon

Volkswagen Group is reorganizing itself into a decentralized organization with four holding companies to better handle high production costs.

German business daily Handelsblatt reports former BMW manager Herbert Diess will head up the first group, expected to be composed of Volkswagen, Skoda and Seat, Automotive News Europe says. Current Audi CEO Rupert Stadler will lead the second group, featuring Audi, Lamborghini and Ducati, while Porsche CEO Matthias Mueller will be in charge of the third group made up of Porsche, Bentley and Bugatti. Finally, former Daimler truck boss Andreas Renschler will helm the last group of three, set to include VW Commercial, Scania and MAN.

The new structure is expected to improve efficiency and speed-up decision making, each group deciding what models to sell and where to sell them. The group bosses will also have a seat on the main group’s management board, while groupwide positions would be eliminated.

According to investment group Evercore ISI, the move affects mainly the mass-market trio of VW, Skoda and Seat, resulting in a unit delivering 7.6 million units annually with a combined revenue of €119.2 billion ($133.9 billion USD) and €3.2 billion ($3.6 billion) in earnings.

The reorganization also casts aside the plan made by ousted VW Group chairman Ferdinand Piech, which allowed the brands to go their own way while competing amongst each other. Industry observers say this scheme made the overall structure hard to manage, hindering quick reactions to changes in the market.

[Photo credit: Audi]

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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 11 comments
  • 28-Cars-Later 28-Cars-Later on Jun 15, 2015

    So, mainstream, exotic, more exotic, and commercial. Lambo, Ducati, and Bugatti would have made more sense together with Porsche/Audi/Bentley being the second group.

    • See 5 previous
    • Corey Lewis Corey Lewis on Jun 16, 2015

      @Kyree Yeah, Lambo these days is just supersport Audi+

  • Pig_Iron Pig_Iron on Jun 15, 2015

    Preparing for jettison?

  • 1998redwagon 1998redwagon on Jun 15, 2015

    it certainly does seem to make it easier to dismantle if a reason arises.

    • 28-Cars-Later 28-Cars-Later on Jun 15, 2015

      Perhaps the Piëch thing was an internal coup as part of a later merger/dismantling effort?

  • FractureCritical FractureCritical on Jun 15, 2015

    Interesting that Audi and Porsche are in different groups. Pretty much everything that Porsche makes (that isn't a 911 or a 918) has a direct competitor at Audi. were the internal squabbles too heated? or did they just want to pair the highest profit unit (Porsche) with the lowest profit/production units (Bugatti Bentley). I'd guess why Lambo isn't in that, mix, too, but they're already so cross-bastardized with Audi anyway...

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