VW to Revamp its Corporate Structure When New CEO Takes Over

Washington DC November 15, 2006; The AIADA newsletter reported that upon taking the helm as Chief Executive on Jan.1, Martin Winterkorn plans to change Volkswagen AG's corporate structure, according to people familiar with the situation.

Winterkorn plans to reorganize the company's brands into two groups, the sources said – a premium group made up of Audi, Bentley, Bugatti and Lamborghini, and a so-called volume group of Volkswagen, Skoda and Seat.

Currently, the automaker organizes its brands with VW, Skoda, Bentley and Bugatti in the VW group, and Audi, Seat and Lamborghini in the Audi group, reports The Wall Street Journal.

Despite strong rationale for these groupings - Audi and Seat brands share "core competencies" and the brands in the VW group gave consumers a wide spectrum of choice in terms of quality and size segments – consumers remained unaware of the distinction and the brands often competed against each other.

Winterkorn also has plans to reestablish a seat for a development head on the board of directors, which was something departing Chief Executive Bernd Pischetsrieder had done away with. Winterkorn's move would likely curb the influence of chief executives from the various brands.