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After Management Shake-Up, New VW Brand Boss Lays Out His Plans

Steady as she goes, says former BMW exec Herbert Diess.

by on Jul.10, 2015

Former BMW exec Herbert Diess took over as VW brand boss on July 1st.

After a bruising internal fight for control of the company, Volkswagen management is putting on a show of solidarity, hoping to calm internal jitters and, it would seem, skeptical analysts and investors.

The once-powerful Chairman Ferdinand Piech was pushed to resign in April in a dispute with his likely successor, CEO Martin Winterkorn. In turn, the chief executive is putting in place a major realignment that will effectively divide VW AG into a series of near-autonomous holding companies.

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The biggest will be run by Herbert Diess whom Winterkorn personally poached from rival BMW. In a Q&A published on the company’s internal website, Winterkorn and Diess outlined their plans for the future.

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Amidst Management Turmoil, VW Delivers Strong Earnings

German maker takes a sharp knife to costs.

by on Apr.29, 2015

VW scored a strong hit with the launch of its latest-generation Golf family.

While its boardroom may be racked with turmoil amidst the ouster of its long-time chairman, Volkswagen AG managed to salve investors’ concerns a bit with news that its first-quarter earnings rose 19%, to $3.23 billion.

The maker says it was able to cut costs “in the low triple-digit millions” during the January-to-March period, addressing a problem that had begun to worry analysts – and raise concerns within its boardroom. The maker also benefited from the nascent recovery of the European market which is just emerging from its worst downturn in decades.

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The numbers reported by the 12-brand Volkswagen Group came in ahead of what industry analysts had forecast and, with the maker forecasting continued growth ahead, it could bode well for the post-Piech era.

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VW Chairman Piech Unexpectedly Quits After Clash Over Company’s Future

Militant trade unionist named his acting replacement.

by on Apr.27, 2015

Ferdinand Piech, grandson of VW's founder, resigned as chairman due to a dispute over his successor.

Volkswagen Chairman Ferdinand Piech unexpectedly tendered his resignation over the weekend, capping a bitter battle over the future of the German automaker.

Piech, who has been credited with crafting the growth and acquisition strategy that transformed VW into the world’s second-largest car company, had clashed with other board members over his eventual successor. The 78-year-old Piech had openly criticized VW’s current CEO, and its likely next chairman, Martin Winterkorn.

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The upheaval at Volkswagen appears to bolster the hand of the German unions in running the company – and could alter the trajectory of the company’s drive to become the world’s largest automaker. VW came a hairsbreadth short of dislodging Japanese rival Toyota last year.

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Fiat, VW Deny Merger Talks

But VW has hinted it’s still hungry for acquisitions.

by on Jul.17, 2014

VW's Winterkorn and Fiat's Marchionne shown emerging from a meeting in Geneva last year.

Volkswagen Chairman Ferdinand Piech has a voracious appetite – for acquisitions, that is, the recent additions of Porsche and truckmaker Scania AB to the VWAG family bringing to thirteen its global brand count. And he has openly expressed interest in adding more, his second-in-command, VW Chief Executive Martin Winterkorn even naming Alfa Romeo as a possibility.

So, why not go one step further and buy Alfa’s parent, the newly merged Fiat Chrysler Automobiles? Or so goes a story in Germany’s Manager Magazin that set the rumor mill ablaze today. It claimed that Volkswagen, the largest maker in Europe and the world’s second-largest, based on 2013 sales, had approached Fiat about selling it some or all of the Euro-American company.

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However, both companies are firmly denying the report, Fiat declaring in a statement that has, “not held discussions with Volkswagen regarding a potential merger.” For its part, a VW statement flatly said that, “There are currently no M&A projects on the agenda,” adding that, “We are now focusing on boosting efficiency within the Group.”

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Volkswagen Hunting for Elusive 13th Brand

No triskaidekaphobia for German maker.

by on Feb.08, 2013

VW Chairman Ferdinand Piech has an almost monomaniacal drive to add more brands.

Fiat/Chrysler CEO Sergio Marchionne may have put Alfa-Romeo out of the Volkswagen Group’s reach for now but there is a good reason to believe that VW is on the prowl for a 13th, and possibly even a 14th,brand to add to its large and varied stable of nameplates, according to industry observers.

While many manufacturers – notably General Motors and Ford – have been cutting back on their brand portfolios, Volkswagen AG Chairman Ferdinand Piech has been aggressively expanding the German maker’s marque count. VW last year finally completed the takeover of Porsche – brand number 12 — and Piech has continued to say he wants Alfa, despite Marchionne’s howls of protest.

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Piech has indicated Europe’s largest automaker plans to add at least one brand to the current lineup as part of a strategy to claim the global auto industry’s sales crown by 2018.

Piech said in an interview with German monthly magazine ADAC Motorwelt that his children 10 years from now will drive one of the automaker’s “at least 13 brands.”  VW representatives declined to comment.

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Enough is Enough for VW Labor Chief

Rejects idea of adding still more brands to portfolio.

by on Aug.22, 2012

The real battle for world dominance will be in China where VW is firmly entrenched.

Volkswagen AG already operates 12 different brands with the recent Porsche takeover.

Volkswagen’s voracious appetite for adding brands to its portfolio may finally have been sated – or, more precisely, the maker’s labor chief is saying “enough is enough.”

Having recently completed the takeover of German sports carmaker Porsche, Volkswagen reportedly was already moving on and looking at the possibility of acquiring the Malaysian-based Proton and its British subsidiary Lotus.  That could have brought VW’s brand count up to 14.

But Bernd Osterloh is putting his foot down over that idea, telling the German newspaper Handelsblatt, “We already have 12 brands and we first have to stabilize the group.”

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As the head of Volkswagen’s works council it might not seem like Osterloh’s opinion would matter.  It would only carry minimal weight with most companies around the world.  But under Teutonic rules, labor gets a very large say in the management of a manufacturer like VW, so his thumbs-down response on the Proton talks would be difficult to override.

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VW – Porsche Formally Say “I Do”

Unlikely merger now complete.

by on Aug.02, 2012

Now kissing cousins? Wolfgang Porsche, (l), and Ferdinand Piech bring two sides of the family together.

The on-again/off-again marriage of Volkswagen and Porsche has been completed, the two German makers saying, “I do” after resolving a list of legal problems that seemed likely, only months ago, to scuttle the proposed alliance.

The tie-up, which actually brings together long-feuding heirs of German automotive legend Ferdinand Porsche was the end result of an unlikely David-v-Goliath bid by the little sports carmaker to acquire its bigger rival.

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“The path is now finally clear for a bright future together,” said Martin Winterkorn, chief executive officer of Volkswagen and Porsche SE, in a prepared statement. “Even closer cooperation will enable us to significantly strengthen Volkswagen and Porsche, and further expand the Group’s product portfolio with fascinating new vehicles.”

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Updated: Lotus Pulls Back on Ambitious Product Plan – Is VW Bid in Offing?

Lutz and advisory board dumped.

by on Jul.27, 2012

Lotus originally developed the Evora GTE for the Le Mans circuit but had hinted it might do a version for the street.

This story has been updated to reflect the latest development involving the Lotus advisory board.

For long-time Lotus fans it seemed too good to be true: the British maker promising to turn out a whopping five new cars in a five-year burst of activity unlike any period in its long but oft-troubled history.

Well, indeed, it was too good to be true.  After discharging Chief Executive Dany Bahar, the automaker’s parent, DRB-Hicom Bhd, has scrapped that ambitious plan and is aiming at what several observers are referring to as a “much more realistic,” meaning downsized, product roll-out.

Meanwhile, former General Motors car czar Bob Lutz confirmed he and the rest of the Lotus advisory board have been terminated as part of the maker’s cost-cutting efforts.

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Could Lotus be leaning out its product plans to make the company seem more appealing for a buyer? That’s one possibility, industry sources suggest, new reports surfacing that suggest Germany’s Volkswagen AG might be interested in buying both the Lotus Group but also Hicom’s Malaysian-based Proton.

“In this day and age, with the cost of developing a new vehicle, building the tools and homologating a sports car,” said analyst Joe Phillippi, of AutoTrends Consulting, the Lotus plan to turn out five new product seemed “overly ambitious.”

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VW, Porsche Will Complete Merger After All

On-again/off-again tie-up to take effect in August.

by on Jul.05, 2012

Vanquished and victor - Porsche Chairman Ferdinand Porsche meets with VW Chairman Ferdinand Piech.

The on-again/off-again tie-up of Porsche and Volkswagen finally is set to be completed after a series of potentially costly snags that threatened to scuttle the deal.

The marriage – which follows an abortive David-and-Goliath effort by the smaller maker that triggered an assortment of lawsuits and a feud within the extended Porsche family – is “expected…to take effect as of August 1, 2012,” Volkswagen says.

Despite earlier fears that the tie-up could leave them vulnerable to billions of dollars in legal costs due to those lawsuits, the makers now contend the merger will generate a “clearly positive impact on consolidated profit(s).”

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“We will concentrate all our strength on the operative business and the solid, profitable growth of the company,” says Volkswagen CEO Martin Winterkorn, adding that the newly combined firm should achieve “long-term synergies of about €700 million per year.”

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Audi Acquires Ducati Motorcycles

$1.1 Bil deal positions VW subsidiary as BMW rival.

by on Apr.18, 2012

A Ducati sport bike sits alongside an Audi. It remains to be seen what synergies will emerge.

Audi has confirmed the widely rumored deal that will see it spend an estimated $1.1 billion to acquire Italian sport motorcycle manufacturer Ducati.

The move by the Volkswagen AG luxury brand better positions Audi as a direct rival to BMW AG – as well as Japanese auto and motorcycle manufacturer Honda Motor Co. The acquisition still has to be approved by regulatory authorities in Europe, though Audi indicated it expects the deal to win approval and “be completed as quickly as possible.”

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Audi Chairman Rupert Stadler described the purchase of Ducati as “another building block” in the luxury maker’s growth strategy. Long relegated to the second tier of luxury brands, Audi has been expanding rapidly in recent years and is now in a race with BMW and Daimler’s Mercedes-Benz for global sales leadership.

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