Monday, November 13, 2006

With Winterkorn Comes Big Changes

There will be sweeping changes in Volkswagen in the coming year. Dr. Pischetsrieder's replacement, Dr. Martin Winterkorn, is planning some major changes is Volkswagen's management structure. To what extent these changes will go, no one knows but they will definitely be sweeping.

As part of his restructuring, Winterkorn plans to take a page out of Ford's book and split Volkswagen brands into two distinct groups: premium and volume. Under the premium group will be Audi, Bentley, Lamborghini, and Bugatti while the volume group will include Volkswagen, Seat, and Skoda.

Winterkorn's restructuring plan has major implications for the Volkswagen brand. This means that Volkswagen's course will be to produce volume models rather than special one-off models that should be left to, say, maybe Audi (ie: Phaeton). And because of this, models in the volume category will not directly compete with models in the premium category (ie: Phaeton again).

Whether or not this will be good for Volkswagen in the long run is still up in the air but consider this: while Volkswagen's performance this year has been so-so despite releasing new models, Audi has been doing much better in North America. If that's any indication of the man taking the helm at Volkswagen, then maybe, just maybe, Winterkorn's appointment is the beginning of Volkswagen's turn-around in this market.

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