Volkswagen faces threats after Piech era ends image

Volkswagen AG looks better than ever – it’s Europe’s undisputed No.1 and steamrolled past General Motors last year to second place globally. But, there are distant threats in the near future, once long time powerful chairman Ferdinand Piech decides to retire.

The name – Ferdinand Piech – and Volkswagen have almost become synonymous, with the executive ruling over the automotive group for the last 20 years. The company makes anything from two to eighteen wheelers, has a huge geographical span and a model portfolio that could give you headaches if you tried to remember it all. Besides reaching the status of being the second largest in the world, the automaker also pleased all its investors, reaching a huge profit despite turmoil in the home region of Europe.

“We have the necessary financial solidity and strength – and a convincing strategy for the future,” says CEO Martin Winterkorn, Piech’s most important aid.

Still, the group could falter in the future – as the “armor” doesn’t look impervious to cracks. For the best example, we can take the United States – the world’s second largest automotive market – where the VW core brand still fails to grasp how to reach its sales targets. Or some emerging markets like India, where it also failed to make a dent.

Next up, despite its very deep pockets, the implementation of the groups’ new MQB architecture has been postponed, rose in costs and has yet to bring the necessary cost savings that were envisioned by the company strategists.

And, not the least of its worries, the automotive group has a seemingly delicate power balance, which was for many years held in check with an iron fist by Piech – if a feeble successor comes, the 12 brands group could be torn apart by internal power feuds.

Via Automotive News Europe