VW CEO: We Won’t Be World’s No. 1 Automaker by 2018, Every Single Model Under Review


VW CEO: We Won’t Be World’s No. 1 Automaker by 2018, Every Single Model Under Review

Nov 7, 2015

Volkswagen, nearly four years after declaring it would become the number-one automaker by 2018, is scaling back its plans for world domination in the wake of its diesel-emissions scandal and putting every single model it builds under strict review.

In less than a month since VW’s supervisory board moved Matthias Müller to CEO, the former Porsche chief has been righting the company’s ship with a new North American division (that’s since been put on hold), a few suspensions, an internal audit, changes to diesel and electric powertrains, government investigations, a recall in Germany, and, now, the beginnings of a revised corporate strategy. The company’s 2018 goal to sell 10 million cars per year (and 800,000 within the U.S. alone) is being pushed out to 2025, with specifics Müller will detail sometime next year. The goal now is to achieve “qualitative growth” over sheer volume supremacy.

“Many people outside of Volkswagen, but also some of us, did not understand that our Strategy 2018 is about much more than production numbers,” he said in a statement. “A lot of things were subordinated to the desire to be ‘Faster, Higher, Larger,’ especially return on sales.”

In previous interviews with the German press, Müller mentioned he would place all of the VW Group brands under a profitability review—particularly Bugatti—as the company faces billions of dollars in repair costs, fines, and lawsuits likely to exceed its allotted $7.2 billion. This strategy is now official and likely will introduce significant model-line cuts across VW’s 11-brand empire.

“We will review in detail our current portfolio of more than 300 models and examine the contribution that each one makes to our earnings,” he said.

In the meantime, Volkswagen has hired Deloitte to audit its diesel misdeeds so they may “uncover the truth and learn from it” and punish those responsible with “severe consequences.” At least three top executives—Audi, Porsche, and VW R&D heads Ulrich Hackenberg, Wolfgang Hatz, and Heinz-Jakob Neusser—have been placed on temporary, if not permanent, leave. Repairs for the estimated 11 million cars will start in January.

As General Motors CEO Mary Barra did after facing deadly ignition-switch defects that led to 80 recalls in one year, Müller also is hoping to convince customers, investors, and regulators that VW’s enormous bureaucracy will become more caring and open-minded. From the CEO down to the worker bolting dashboards into Passats in Chattanooga, VW employees are said to need “more courage, greater creativity, and a more entrepreneurial spirit.”

(source: caranddriver.com)


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