VW Group to be split into four companies, report claims

No sooner is Ferdinand Piech out of the way than the Volkswagen Group prepares for its biggest organisational shake-up in a generation.

German media is reporting that the 12-brand Volkswagen Group plans to split up into four separately run holding companies.

Handelsblatt, regarded as well connected with the Volkswagen Group board, made the claim on Monday, insisting it is the master plan of chairman, Dr Martin Winterkorn, to push the brand to greater profitability as it closes in on Toyota in the race to be the world's biggest seller.

The report insists the new setup would be more intuitive than it is now, with the volume brands Volkswagen, Skoda and Seat joining forces under one umbrella lead by ex-BMW engineering and purchasing director, Herbert Diess.

Diess cannot begin work at Volkswagen until July due to a non-compete clause in his BMW contract, but he was hired to manage the Volkswagen brand.

The second group would be under Audi's control, with Audi Chairman Rupert Stadler reportedly in charge of Audi, Lamborghini, Ducati and ItalDesign Giugiaro – so that one would be largely business as usual, because the first three brands already answer to Stadler.

Porsche, whose power and influence struggles with Audi go well beyond last weekend's Le Mans 24 Hour race, would join up with Bugatti and Bentley under the stewardship of Porsche chief executive, Matthias Mueller.

The final holding company would encompass the group's work wear, including Volkswagen's commercial vehicles and the trucking firms, Scania and MAN and would be governed by ex-Daimler truck chief, Andreas Renschler.

The reorganisation might not stop there, either, with Dr Winterkorn said to be examining whether the reorganised company would still need a Group-level executive for sales, marketing, production and China.

That would leave the positions of former Piech acolytes like current sales and marketing boss Christoph Klingler and China boss Jochem Heizmann in peril.

The reports said Dr Winterkorn wanted to change the structure away from Piech’s heavily centralised head-office culture, plus making the brands compete harder with each other was also a driver.

He reportedly wants to give the Audi, Volkswagen and Porsche brands more independence, while freeing up the decision making of people on the ground in major markets like the US and China.

Volkswagen employs more than 600,000 people and has 119 factories around the world.