Daily Management Review

To Boost Efficiency, Volkswagen To Make Brands More Distinct


10/12/2017




To Boost Efficiency, Volkswagen To Make Brands More Distinct
With the aim of defusing prevailing tensions within the carmaking group and to reduce overlaps, German auto giant Volkswagen will make its three mass-market brands more distinct, said the chief executive of the company on Thursday.
 
In the wake of its diesel emissions scandal, the car maker is in serious attempts to help fund a costly shift to electric vehicles and hence this German company is striving to make savings and become more efficient.
 
Based on 14 customer groups in its core European market, a new focus for its mass-market VW, Skoda and Seat brands have been set out as a new focus by the automaker’s executive board of the company, said the CEO of the company Matthias Mueller.
 
“The key challenge is (to achieve) a perfect market coverage with clear territories for the brands,” he told a strategy meeting of about 400 managers in Wolfsburg.
 
“We must now be able to better use the synergies that our unique alliance of brands offer than we have done to date.”
 
The relations between the brands may be helped to be smoothened by the move.
 
Managers and unions were seeking to make the Czech brand pay more for shared technology, to move some of its production to Germany and to curb competition from lower-cost stablemate Skoda, reported the media last week quoting several sources from within the company.
 
But a backlash at Skoda was sparked off by that move by the managers. The Czech brand’s main union threatened to cut back on overtime work as it was concerned about the possibility of losing work to Germany. Talks on the issue with Skoda’s leadership was also demanded by Czech Prime Minister Bohuslav Sobotka.
 
The positioning of the brands is “an emotional theme that recently made waves,” Mueller said.
 
“Of course, it is an extreme challenge sometimes to steer this tanker and to balance the (different) interests,” he added.
 
Mueller said, without being more specific that Volkswagen will expand the strategy to other regions and will also pursue greater differentiation between its premium brands as a part of its next step.
 
Making use of their new shared PPE production platform for electric cars, the group expected to make major savings in development costs at premium brands Audi and Porsche, Mueller said separately.
 
“On balance we expect 30 percent less workload” compared with the current MLB and MSB platforms operated separately by Audi and Porsche, the CEO said, without being more specific.
 
(Souorce:www.reuters.com) 






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