VW Group Seeking Ways To Defuse Tensions Between Its Brands

VW Group will focus on making VW, Skoda and Seat more distinct in order to reduce tensions within the company.

Matthias Mueller, VW Group CEO, said that the company’s executive board has laid out a new plan for the three mass-marker brands in Europe based on 14 customer groups, Reuters reports.

“The key challenge is (to achieve) a perfect market coverage with clear territories for the brands,” Mueller said during a strategy meeting in Wolfsburg on Thursday. “We must now be able to better use the synergies that our unique alliance of brands offer than we have done to date.”

This move comes after last week’s report saying that certain VW managers and unions were looking into curbing the competition from Skoda by demanding to move some of its production to Germany and force the Czech brand to pay more for the shared components.

Skoda’s main union reacted to the news, threatening to cut back on overtime work, while Czech Prime Minister Bohuslav Sobotka demanded talks on the issue with Skoda executives.

Mueller said that the positioning of the brands is “an emotional theme that recently made waves. Of course, it is an extreme challenge sometimes to steer this tanker and to balance the (different) interests,” he added.

VW Group’s CEO also said that the next step is to pursue greater differentiation between its premium brands and expand the new strategy to regions outside Europe, without providing more details.

PHOTO GALLERY

  • salamOOn

    they (VW) are asking for troubles with this move….

  • Janar Siniväli

    Some years ago the boss of Škoda was already sacked because the cars were better than Volkswagens.

    Wouldn’t it just be easier to exchange badges on these two cars to make the marketing strategy fall into place?

    • CarCzarDesigner

      No! Competition improves the breed. Mueller knows this. It is better for VW to have Skoda challenge VW’s leadership, because it will help stop complacency within the brand, making VW even better.

  • Auf Wiedersehen

    They wanted to be number one in the world!!…This is what happens when you buy up brands around the world and badge engineer models to fit in those brands and share platforms and engines. I mean, look at Audi, Lambo, Bentley now Porsche. You want to be the biggest, you asked for this. You have no room to bitch. And frankly we don’t wanna hear it.

    And looking at the picture above…why does the US get 6-7 primary colors and that’s it!? I’m FNDUN with VW. Tired of being the step-kid getting the basics while Europe gets all the good stuff.

    • Łukasz

      It’s not like that across the whole Europe. In Czech Republic, where Skodas are made normal Octavia is available in nearly 70 colors to choose from, including bright yellow, purple etc., where’s in Poland there are only 11 colors, mostly shades of grey. It’s the same way with VW in Germany vs. rest of Europe.

    • Alexander Carabitses

      This is exactly why GM’s sale of PSA was a great move for GM (at least for the time being) and a terrible move for PSA. Good luck carving a niche for Opel and Vauxhall, especially with their desire to sell Vauxhall in other markets outside of the UK.

      • PB

        Vauxhall has been pointless since the 70s.

    • Exactly! US customers are treated like peasants…lack of choices, majorly decontented and cheap interiors…

  • XtremWize

    Skoda and Seat are better made and have fewer problems, in addition they are better looking than those boring VW’s.

  • Daniel

    About time! Having three brands focused on pretty much the same market categories is a sure way to lose money. The Group could make Škoda the low-cost brand it wants to offer, so it wouldn’t need to go through all the work required to create a new one. Seat, on the other hand, could become the sporty branch of the generalist categories. The Volkswagen brand could become the purely generalist brand, almost like Peugeot in PSA.

  • jh

    What are you talking about? They are all THE SAME! And belong to vw… just with different styling and badge. That is the reason for the ‘competition’. Why buy a golf R if you get the exact same package with a seat-badge for 10grand less?! So what is this bogus about??

    First they make all their class-models the same and then wonder why people aren’t dumb enough to buy the most expensive one…

    • Axel Cortez

      you dont get seat with haldex wrong car to compare….

      • jh

        Since you get the cupra with awd, you get the haldex, as well… ;*

        • Axel Cortez

          you get the cupra station wagon with awd is far from a hot hatchback

  • iKaizen

    And not too long ago, VW actually wanted to buy and create more brands. I’m surprised these tensions didn’t happen sooner.

  • EU

    VW…. The “EU” of cars….

  • fabri99

    Easy:
    VW – nearly premium, move it upmarket;
    Skoda – entry-level, good quality, practical but not too focused on trends;
    Seat – entry-level but sporty and appealing to young people, aggressive styling and not too many worries about practicality;

  • SteersUright

    This is because these monster conglomerates are bad business. They do a disservice to the consumer, the marketplace, and the industry when any business become excessively large. There’s a reason economists have written for hundreds of years about the importance of recognizing monopolies and breaking them down into separate competing entities.