VW to Give More Freedom to Brand and Regional Leaders

The VW Group, which stretches from luxury brands like Bentley to affordable ones like Skoda, has a total of 108 factories worldwide and its annual sales nudge the €200 billion (US$245 billion) mark.

Even though its profits have almost doubled since 2007, when Martin Winterkorn became CEO, to 2013, reaching €11.7 billion (US$14.4 billion) and the group is on its way to dethrone Toyota as the world’s number one car manufacturer, not everything is rosy.

The reason is that the core VW passenger car brand has been underperforming in certain markets, such as the US, where its sales fell by 11 percent this year. Thus, as Bernd Osterlock, General Works Council Chairman of VW group, told Reuters, regional managers will be given more freedom in order to reverse this situation.

“I think a company of this size cannot steer everything from Wolfsburg”, said Osterloh. “Our approach is: centralize as much as necessary and decentralize as much as possible.”

In the US, the world’s largest market after China, VW is setting up a planning center and will hire nearly 200 engineers to closely watch the market and revamp the brand’s line-up more quickly.

Osterloh also said that Winterkorn will most likely extend his contract, which expires in 2016, for another two years. The 67-year old said in a recent interview that when he contract runs out he will be 69 years old, possibly hinting at retirement, but Osterloh insisted that “we are not interested in letting the best manager in the industry go”.