Revised VW/Audi Article in WSJ with the rest of the story...
06-26-2001, 06:19 AM
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Revised VW/Audi Article in WSJ with the rest of the story...
VW Ponders Shuffling Its Operations,
Forging Distinct Brand for Luxury Cars
By SCOTT MILLER
Staff Reporter of THE WALL STREET JOURNAL
PRAGUE -- Volkswagen AG is considering reorganizing its operations into three divisions, but the company is still far from any decisions, a senior executive said.
Robert Buechelhofer, board member for sales and marketing, said he sees some merit in a reorganization of VW's nine brands into a trio of operational divisions -- volume cars, premium cars and commercial vehicles. "There is some logic behind it," he said on the sidelines of an automotive conference here, but he quickly added, "It would have to be worked through in detail."
The possibility of VW reorganizing its operations first arose last week when Chairman Ferdinand Piech told a German newspaper that he favored a simplification of VW's operational structure. VW has officially refused to comment on that newspaper report.
It is unclear how a new structure would affect VW's management board, but Mr. Buechelhofer said the company isn't considering shaking up its eight-member board, which is now organized along functions such as strategy, quality, and research and development.
A reorganization would be in keeping with a trend among auto companies to give their luxury brands greater independence from the rest of their operations. In 1999, for example, Ford Motor Co. formed its Premier Auto Group composed of five up-market brands, including Volvo and Jaguar.
Mr. Buechelhofer told auto executives attending the conference, sponsored by Automotive News Europe, that if the company were to decide to form a luxury division, it would under no circumstances spin off the division. People close to VW said last month that the auto maker was thinking of selling part of its Audi division to assist it in defending against a possible hostile takeover.
The luxury division would likely include the Audi, Bugatti, Bentley and Lamborghini brands; the mass-car division would be composed of most, but not all, of its VW models, Skoda and Seat. VW also makes commercial vehicles under its own brand and holds a stake in Swedish truck maker Scania AB. Mr. Piech has said repeatedly that he would like to join forces with yet another truck maker.
Mr. Piech's brief time left as chairman could be complicating discussions of a possible reorganization. Officially he must retire next year, but people close to the company say he could step down as early as this November and then take a post on VW's supervisory board. Bernd Pischetsrieder, former Bayerische Motoren Werke AG chairman and current board member, is widely expected to take over as head of VW when Mr. Piech steps down.
A reorganization could have a number of advantages for VW. First, it could help create the impression that the company's luxury brands are distinct from its mass brands. Public awareness that VW widely shares major components throughout its range has hurt Audi, analysts say.
A reorganization might also make it possible for the VW chairman to become more involved in the company's wide-ranging interests. Mr. Piech, who says he gives the brands considerable freedom, has recently expressed dissatisfaction with Audi's sales performance. Mr. Buechelhofer acknowledged that "there is always room for improvement."
Another advantage would be to fold up-market VW brand cars such as the D1 model clearly into a luxury operation. VW has been steadily pushing its core brand into increasingly pricey market segments, but analysts worry that customers will be put off paying luxury-car prices for a car carrying the VW badge.
Although one of the themes at the conference here is the difficult European auto market, Mr. Buechelhofer said he is sticking to VW's forecast that it would finish the year with higher sales than last year's 5.2 million units. "We will be able to surpass last year," he said. "We are on track."
Forging Distinct Brand for Luxury Cars
By SCOTT MILLER
Staff Reporter of THE WALL STREET JOURNAL
PRAGUE -- Volkswagen AG is considering reorganizing its operations into three divisions, but the company is still far from any decisions, a senior executive said.
Robert Buechelhofer, board member for sales and marketing, said he sees some merit in a reorganization of VW's nine brands into a trio of operational divisions -- volume cars, premium cars and commercial vehicles. "There is some logic behind it," he said on the sidelines of an automotive conference here, but he quickly added, "It would have to be worked through in detail."
The possibility of VW reorganizing its operations first arose last week when Chairman Ferdinand Piech told a German newspaper that he favored a simplification of VW's operational structure. VW has officially refused to comment on that newspaper report.
It is unclear how a new structure would affect VW's management board, but Mr. Buechelhofer said the company isn't considering shaking up its eight-member board, which is now organized along functions such as strategy, quality, and research and development.
A reorganization would be in keeping with a trend among auto companies to give their luxury brands greater independence from the rest of their operations. In 1999, for example, Ford Motor Co. formed its Premier Auto Group composed of five up-market brands, including Volvo and Jaguar.
Mr. Buechelhofer told auto executives attending the conference, sponsored by Automotive News Europe, that if the company were to decide to form a luxury division, it would under no circumstances spin off the division. People close to VW said last month that the auto maker was thinking of selling part of its Audi division to assist it in defending against a possible hostile takeover.
The luxury division would likely include the Audi, Bugatti, Bentley and Lamborghini brands; the mass-car division would be composed of most, but not all, of its VW models, Skoda and Seat. VW also makes commercial vehicles under its own brand and holds a stake in Swedish truck maker Scania AB. Mr. Piech has said repeatedly that he would like to join forces with yet another truck maker.
Mr. Piech's brief time left as chairman could be complicating discussions of a possible reorganization. Officially he must retire next year, but people close to the company say he could step down as early as this November and then take a post on VW's supervisory board. Bernd Pischetsrieder, former Bayerische Motoren Werke AG chairman and current board member, is widely expected to take over as head of VW when Mr. Piech steps down.
A reorganization could have a number of advantages for VW. First, it could help create the impression that the company's luxury brands are distinct from its mass brands. Public awareness that VW widely shares major components throughout its range has hurt Audi, analysts say.
A reorganization might also make it possible for the VW chairman to become more involved in the company's wide-ranging interests. Mr. Piech, who says he gives the brands considerable freedom, has recently expressed dissatisfaction with Audi's sales performance. Mr. Buechelhofer acknowledged that "there is always room for improvement."
Another advantage would be to fold up-market VW brand cars such as the D1 model clearly into a luxury operation. VW has been steadily pushing its core brand into increasingly pricey market segments, but analysts worry that customers will be put off paying luxury-car prices for a car carrying the VW badge.
Although one of the themes at the conference here is the difficult European auto market, Mr. Buechelhofer said he is sticking to VW's forecast that it would finish the year with higher sales than last year's 5.2 million units. "We will be able to surpass last year," he said. "We are on track."
06-26-2001, 08:39 AM
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I specificly ignored nodotradar poor attempt at "one-upmanship"
I travel too much to read the WSJ in paper. That is why I read it on-line.
I am still waiting for him to post something, anything of substance, otehr than some grainy picture of some rusted Blues Brother car
I am still waiting for him to post something, anything of substance, otehr than some grainy picture of some rusted Blues Brother car
