Fresh from April’s leadership crisis that led to the surprise demise of long standing chairman Ferdinand Piech, Volkswagen AG, the largest European carmaker and the second biggest in the world looks ready for a major overhaul.

According to three persons that have insider knowledge, the company’s corporate structure will be modified into a decentralized system, using four holding companies as the automaker looks to reign down on profitability issues. VW’s senior management might need to leave power in the hands of others as they set up the holding companies – one would be used for the mass market divisions, one for the trucks unit and two for the luxury brands, one ruled by Audi and the other by Porsche, told Reuters the three company sources, which declined to be identified as the strategy is not of public knowledge. The persons added that Herbert Diess, a former BMW executive, might be in charge of the mass market brands holding company – which gathers under its umbrella the VW, Skoda and Seat brands. Diess could take point as of July 1, when he is scheduled to take office at the German carmaker.

The new company planning, established by the major players within the company over the summer, could also lead to a larger management reshuffling – with reports last week putting sales and marketing group chief Christian Klingler in line to lose his position. Analysts and industry observers are at odds when talking about the possible new structure – with some claiming it would have little impact and others believing the automaker would move faster under the new structure.

Via Reuters


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