No internal competition

The future head of Volkswagen promises to reform the concern

The largest German automaker, Volkswagen, which will change its leadership on New Year's Eve, is awaiting restructuring. The new chairman of the board of the company, Martin Winterkorn, named stopping the copying of products within the concern as a priority for his future activities in order to get rid of internal competition.

Mr. Winterkorn now heads Audi, which is part of Volkswagen. The decision that from January 1, 2007 he will take the post of head of the entire concern (see Issue 206 of November 9 ) was made public last week and turned out to be quite unexpected. However, the fact that the contract with the current head of VW, Bernd Pischetsrieder, will not be renewed was the first to speak out this summer by the head of the concern’s supervisory board, Ferdinand Piëch. But then this was associated not so much with the financial and production crisis of VW, but with the scandalous story of the delivery of prostitutes to Germany for the top managers of the concern at the expense of the company. Nevertheless, the automaker was far from in the best shape, and the disastrous results of its activities were primarily the result of the failure of Mr. Piekh’s expansionist strategy. His idea to penetrate the upper class of cars with his own expensive Phaeton model had a particularly detrimental effect on the company. However, to Mr. Pischetsrieder’s attempts to change the strategy, Mr. Piech replied: “We will not enter into such a disgusting turn.” Even then, many expressed the opinion that most likely Mr. Piech, whose contract as head of the supervisory board expires in May next year, would put his comrade-in-arms, Mr. Winterkorn, at the head of the concern.

As the German magazine Spiegel reported last Saturday, Mr. Winterkorn, as soon as his future appointment was announced, announced the need to reform the concern's activities. In his opinion, it is necessary to define a niche for each brand included in Volkswagen. To do this, the future head of the company is going to create a group of premium brands, which will include brands such as Audi, Bentley, Bugatti and Lamborghini, and a group of less prestigious mass brands - Volkswagen, Seat and Skoda.

In reality, these groups have been around for a long time. The “people's” Volkswagen, Skoda purchased from the Czechs and the not very popular Spanish Seat can hardly produce Bentley, Bugatti or Lamborghini. Audi is another matter. The specifics of this brand have not been fully determined, and so far this is the only enterprise of the German concern that can offer a car in different price categories. Only in recent years has the brand’s policy changed in favor of raising the price level. Apparently, Mr. Winterkorn has decided to finally transfer Audi into the category of premium cars.

The new head of Volkswagen also intends to focus on the development of concept cars, Spiegel reports. In fact, this means that the concern is committed to the active implementation of new technologies and design solutions. For this purpose, a new position will be created in the company - director of concept development, and the responsibilities of board members will be redistributed.

There will also be the usual dismissals in such cases in order to reduce costs. It is already known that with the arrival of Mr. Winterkorn, about 4 thousand Volkswagen employees will receive corresponding notifications. Most of the staff reductions will take place at Volkswagen's Brussels plant.

Denis UVAROV