The Volkswagen Group (VAG) is about to undergo its biggest organisational change by splitting its 12 brands into four distinct holding companies, Automotive News Europe reports.
In group one will be the Volkswagen passenger vehicle brand, Seat, and Skoda, said to be led by former BMW R&D Chief, Dr. Herbert Diess. Group two will consist of Audi, Lamborghini, and motorcycle producer Ducati, which will be managed by Audi Chairman Rupert Stadler.
Porsche, Bentley, and Bugatti will form the third group under the guidance of Porsche CEO Matthias Müller. Lastly, the fourth group will comprise of commercial vehicle brands including Volkswagen Commercial, Scania, and Man, with former Daimler man Andreas Renschler in charge there.
This elaborate move is part of VAG’s effort to decentralise the current single leadership structure into four smaller units that can share technologies and platforms, allowing for a more efficient and quicker in decision making. With this expected measure, the company is expected to respond quicker to changes in the market.
Industry watchers have said that previous Chariman of VAG Ferdinand Piëch made the group difficult to control. The group employs an estimated 600,000 people and has 119 factories worldwide. In comparison, Toyota, who is Volkswagen’s main rival, employs around 330,000 people but managed to deliver more vehicles last year to maintain its global lead.
Forbes reports that the split could be beneficial for VAG with better margins and a refocus of resources on conceiving products more in line with current demand trends to improve its profitability.