New boss Herbert Diess outlines his grand plan for the company

The new chief of the Volkswagen Group, Herbert Diess, has said that the company must change from “a slow, lumbering supertanker to a powerful group of speedboats.”

Speaking for the first time since his appointment last month, addressing the car maker’s shareholders at its annual general meeting, Diess outlined the importance of changing the corporate culture following the Dieselgate crisis and his plans for the future. In reference to his “supertanker” comment, he said: “Decision-making is too slow.”

Car makers subject to new EU regulatory laws after Volkswagen scandal

He also acknowledged Volkswagen’s part in the mass decline in diesel sales. “As Europe’s biggest car maker, we need to break new ground for diesel engines. It's due in part to us that diesel has wrongfully fallen into disrepute.”

Diess added that he thought bans on diesel, such as those that have been suggested in Germany, UK and Norway, were “the worst possible solution”.

Dieselgate progress

Diess said the Volkswagen Group aims to conclude all fixes to affected diesel cars this year.  So far, recalls stand at 69% complete worldwide and 76% complete in Europe.

He claimed that the pollutant nitrogen oxide (NOx) had been cut by 30% on cars fixed so far and added that 200,000 old diesel cars had been scrapped in Germany under scrappage schemes.

Our Verdict

Volkswagen Golf

New 1.5-litre petrol engine promises to help keep the refreshed Volkswagen Golf ahead of rivals

Find an Autocar car review

Driven this week

“We’re still investing in petrol, diesel and CNG," Diess said. "Future engines will emit 6% less CO2 and up to 70% fewer pollutants (including NOx) compared with today’s".

He admitted that the diesel crisis had been “a painful watershed”, and said: “We must and will do everything we can to make sure nothing like this ever happens again in this company.”

Diess also spoke at length about the need to have a good corporate culture. “Sustainable financial success is only possible if we have a healthy corporate culture," he said. "It's a first priority for me. The Volkswagen Group needs to become more honest and more truthful. We need to be an upstanding corporate citizen. We need to be role models for our employees. That means we at Volkswagen walk the talk.”

New structure for all Volkswagen Group brands

In order to be able to make decisions quicker and more efficiently, Diess outlined a new company structure consisting of seven clusters that incorporate all areas of the business. These are:

- Volume: Volkswagen, Skoda, Seat, Volkswagen Commercial Vehicles, Moia

- Premium: Audi, Lamborghini, Ducati

- Super Premium: Porsche, Bentley, Bugatti

- Truck & Bus: MAN, Scania

- Procurement/ Components

- Volkswagen Financial Services

- China region

Board members responsible for a brand will also have group responsibility, explained Diess. For example, Porsche boss and board member Oliver Blume will be responsible for group production and Audi boss and board member Rupert Stadler will assume responsibility for group sales.

Upcoming challenges

“Our realignment must gather great momentum now,” said Diess. “New competitors are entering our established markets.” He added that “geopolitical uncertainty and unmistaken trend for protectionism” – no doubt alluding to Brexit and President Trump – were also cause for concern.

Diess also flagged the issues surrounding the new WLTP emissions tests coming in to force on 1 September. “We were prepared thoroughly for this change early on,” he said. However, given the wide range of models that need technical work and the necessary testing – and availability of that testing – he warned the process could lead to temporary bottlenecks, although he added that everything was being done to “minimise the impact”.

The electric future

According to Diess, the Volkswagen Group’s strategy is “the most far-reaching electrification initiative in the industry”. He described electric as the “engine of the future” and reiterated that the Group would sell three million EVs annually by 2025. There will be 18 new EV models by then, starting with the Audi E-tron, whose production starts in August. Diess claimed that the E-tron, which will rival the Jaguar I-Pace, will set a new benchmark, and that the upcoming Porsche Mission E and Volkswagen ID family would do the same.

Talking more broadly on 2018, sales revenue for the Volkswagen Group was up 5% in the first quarter. Diess predicted that there will be a moderate increase in sales this year compared to the 10.7m sales of 2017. A profit margin of between 6.5% and 7.5% is predicted. “We expect a tailwind from our large model initiative," Diess said. "It’s the first full year for some new SUVs and will be further bolstered by the new Audi Q8, the Volkswagen compact car for China, the Audi A6 and the Volkswagen Touareg.”

Diess closed the meeting by saying this: “I expect 2018 to be another good year for the Volkswagen Group. We will make progress on being a better company in every aspect. My goal is to transform the company.”

Diess was appointed as head of the Group in April, replacing Matthias Müller, who had been at the helm since the Dieselgate scandal broke in September 2015. Diess has kept his existing role as chief of the Volkswagen brand.

Read more 

Car makers subject to new EU regulatory laws after Volkswagen scandal

Volkswagen mild hybrid and natural gas engines to drastically cut CO2

Volkswagen to sell EV home chargers ahead of ID launch

Join the debate

Comments
8

3 May 2018
Only he got the tense wrong. Evidence suggests Volkswagen is still a lumbering and out of control car giant. I do hope though and wish him good luck in streamlining this out of shape uncontrollable and insatiable beast.

3 May 2018

it always wants to regenerate and fuel economy 10% worse from what was lousy even befre official 64mpg gets 38 to 41mpg. never to get audi vw again

3 May 2018

2 statements which one is Right and which is wrong

Electric as the “engine of the future”

"Audi E-tron, whose production starts in August"

How did they get so far behind.

 

typos1 - Just can’t respect opinion

3 May 2018

Yeah, cos every major manufacturer has a massive range of EVs nowadays., you cant move for em.

XXXX just went POP.

3 May 2018

EV rather than converted ICE. Nissan, Renault, Tesla of course, BMW, GM, Honda, Hyundai, Honda, Jag in a couple of months.

typos1 - Just can’t respect opinion

3 May 2018

How is Lamborghini premium and Porsche super-premium (see text)?

In order to maintain its position, VW needs a Golf for the electric era. The ID hatchback looks promising but it needs to come out soon.

3 May 2018

This reorganization is about which company undertake the engineering which brands. Thaht's why you can see in some details, electronics or software parts from another Volkswagen brand comapny. 

- Volkswagen is in charge of Volkswagen, Seat and Skoda. 

- Audi takes Lamborghini and Ducati because they're direct owners of those brands, so that's a good news for the Audi R8's future. 

Porsche takes charges of Bentley and Bugatti as they have more legitimacy and prestige to take care of those brands instead of Volkswagen itself. So we can expect a new future for Bugatti as they're runned by Porsche.

3 May 2018

Make solid reliable cars that are good to drive.

Steam cars are due a revival.

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week