Volkswagen’s recent management reshuffle could ultimately bring no positive impact on Europe’s biggest automaker as it strives to resolve issues that have affected its structure.
Industry experts and analysts believe the company’s structural problems might remain unsettled even as the automaker has taken the world sales crown after the first six months of the year away from Toyota. But the issues lingering at the heart of the carmaker remain and have been recently amplified by the Chinese worries. Volkswagen last week decided that Martin Winterkorn would remain its chief executive officer through 2018 and that finance chief Hans Dieter Poetsch would be promoted as chairman. This ended the trials and tribulations over the fate of the management structure that were established by the April forceful resignation of long-running chairman Ferdinand Piech – who was involved in a power clash with Winterkorn over the ongoing strategy.
Now some analysts still believe the decisions should have also brought outside expertise into the traditionalist German group, which has been hiding the profitability difference with competitors and internal issues behind years of sales and earnings increases. The company has now decided to introduce a new structure to tackle low performance abroad and wants its feeble core division to bring 5 billion euros ($5.55 billion) of annual cost savings. Experts have also become divided whether Winterkorn actually gained an advantage or not after last week’s decision, as he introduces reforms and wants to make the automaker slender enough to survive in a future world apparently ready to become dominated by autonomous driving technology.