Tag Archive | "Volkswagen"

U.S. Brands Tap European Auto Recovery as Volkswagen Left Behind

European car sales rose 13.7 percent in November, according to industry data published on Tuesday, with U.S. brands recording strong gains as Volkswagen continued to pay the price of its diesel emissions test-rigging scandal, reports Reuters.

Registrations rose to 1.12 million cars last month from 989,758 a year earlier, the Brussels-based Association of European Carmakers said, with Ford and General Motors’ Opel among the best performers.

Volkswagen, Europe’s biggest carmaker by sales, saw its core brand market share tumble to 12.2 percent from 13.5 percent, as sales edged just 3.1 percent higher, underperforming the market. The German group as a whole posted a 3.9 percent gain.

The VW brand, struggling to contain the damage after being exposed in September for cheating U.S. tests for toxic diesel emissions, suffered a more marked 20 percent sales decline in Britain, according to data release on Dec. 4.

The broader European auto recovery is set to continue into 2016 after an 8.6 percent expansion in January-November, Ernst & Young analyst Anil Valsan said.

“The car market is expected to remain on the growth track driven by the positive economic environment, low financing costs, low fuel prices, high discounts and some remaining pent-up demand,” Valsan said.

“However, growth is expected to be slower, with interest rates likely to edge up.”

Fiat Chrysler, Ford and Opel all saw November sales rise more than 18 percent, with GM’s European arm helped by the recently launched Astra compact.

Sales by France’s Renault advanced 15.1 percent, while domestic rival PSA Peugeot Citroen rose 12.8 percent, with a buoyant Peugeot brand tempered by a weaker Citroen performance.

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VW Will Cut Spending By $1 Billion, Launch All-Electric Phaeton in EV push

MUNICH — Volkswagen Group said it will reduce investment spending at the VW brand by 1 billion euros ($1.1 billion) a year, as well as switch to a different diesel emissions treatment technology and launch an all-electric Phaeton sedan as the flagship for a new focus on electrification, reports Automotive News.

VW will increase its focus on long range plug-in hybrids and high-volume electric vehicles with a range of up to 300 km (186 miles), the company said in a statement today. The automaker also said it will speed up cost cuts and will overhaul the VW brand model strategy.

“The Volkswagen brand is repositioning itself for the future. We are becoming more efficient. We are giving our product range and our core technologies a new focus,” VW brand chief Herbert Diess said in the statement.

Diess said the brand will create room for forward-looking technologies by speeding up an efficiency program that targeted 5 billion euros in savings and operational improvements by 2017.

VW will cut spending on models, technology and production facilities at the VW brand by 1 billion euros a year through 2019 from its previous plans, a spokesman said. He declined to say what those investment plans had been.

Audi, Porsche to seek savings

In November, VW announced 85.6 billion euros of investments across the group between 2015 and 2019, with half earmarked for modernizing and expanding the model range.

Other brands in the group, which includes Audi, Porsche, Seat and Skoda, are working on similar efficiency-boosting programs, the spokesman said, without giving details.

Audi, the biggest earnings contributor at VW Group, is continuing an efficiency program that started before the diesel scandal hit, spokesman Juergen de Graeve said. The luxury-car unit planned last year to rein in annual costs by about 2 billion euros to offset spending on new technology, according to people familiar with the matter.

Pushed by Diess, who joined in July from BMW, VW will adopt diesel technology it previously eschewed for smaller models. The brand is now moving to the “best environmental technology” for its diesel cars, the statement said.

VW said it has decided to switch over to installing only diesel drivetrains with selective catalytic reduction (SCR) and AdBlue technology in Europe and North America “as soon as possible.”

VW engines affected by the diesel emissions rigging scandal used lean NOx traps to reduce nitrogen oxides emissions rather than the more expensive urea-based SCR and AdBlue systems. The tanks make diesel models heavier and more expensive, and they also must be refilled, making the cars less convenient to own.

Electric architecture

With diesel technology under pressure, VW plans to develop standardized components for electric vehicles with ranges as far as 500 km (310 miles).

VW said it will develop a new modular electric architecture dubbed MEB for compact vehicles for all group brands. The architecture will be designed for all body structures and vehicle types. It would allow the development of “particularly emotional vehicle concepts” and an all-electric range of 250 km to 500 km, the statement said.

At the Frankfurt auto show last month, VW said it would launch 20 battery-powered and plug-in hybrid vehicles by the end of the decade, including the first all-electric Porsche based on the Mission E concept and a production version of Audi’s e-tron Quattro concept.

The shift includes redesigning the Phaeton as an all-electric model. The current model’s gasoline and diesel versions will be axed. The next-generation Phaeton is due to hit showrooms by about 2019-2020.

“There is a real chance for VW to even extract something positive from the diesel fiasco,” said Stefan Bratzel, head of the Center of Automotive Management near Cologne. “Funneling more resources into electric mobility gives them a credible future perspective to try to overcome this crisis.”

The VW brand is likely to slump to a loss this year as it will shoulder the bulk of costs from the diesel emissions cheating that also affected the Audi, Skoda, Seat and light commercial vehicle brands, Reuters reported on Friday.

Supplier cuts

VW wants to extract 3 billion euros ($3.41 billion) in price cuts from its suppliers to help mitigate the costs of the emissions scandal, German newspaper Handelsblatt reported.

The measure would be part of a broader cost-cutting program including pay, marketing and sponsoring activities to help VW bear an estimated 40 billion euros in costs of the scandal, the paper reported, citing company sources.

The cuts come amid renewed criticism for Volkswagen’s handling of the scandal, which affects some 11 million cars worldwide. The company was far too slow to disclose its use of software to enable its diesel cars to pass U.S. laboratory emissions tests despite far higher on-road pollution, said Stephan Weil, prime minister of the German state of Lower Saxony and a VW board member.

“This admission should clearly have come much sooner — a further serious mistake,” Weil told the Lower Saxony parliament today. “Who decided this course of action and when is also something that’s being investigated.”

A VW supervisory board committee charged with overseeing the external investigation into the emissions cheating was meeting today in Wolfsburg.

VW presented German authorities with a plan last week for fixing affected cars in its home market. Regulators are still reviewing the proposals, which range from a software update to new parts for diesel engines.

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VW CEO Resigns Amid Emissions Scandal

Volkswagen AG has accepted the resignation of CEO Martin Winterkorn, who said in a statement posted today on the automaker’s media site that he was shocked and stunned by the revelation that the company’s diesel vehicles included software to evade emissions standards.

A separate statement from the company’s executive board was posted to its media site. In it, the board noted that it has accepted Winterkorn’s resignation but maintained that he had no knowledge of the manipulation.

“I am shocked by the events of the past few days,” read Winterkorn’s statement, in part. “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO, I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the supervisory board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company, even though I am not aware of any wrong doing on my part.”

On Sept. 18, the EPA accused Audi and Volkswagen of using a software algorithm in its four-cylinder diesel engines to circumvent federal emissions standards. The vehicles, model years 2009 to 2015, are able to detect when they are undergoing official emissions testing and were programmed to turn on full emissions controls only during that test — a violation of the Clean Air Act.

The allegations cover about 482,000 models, including the Jetta TDI, Beetle TDI, Golf TDI, and Audi A3 TDI. The Passat TDI is affected from the 2014-MY and 2015-MY.

In accepting Winkerkorn’s resignation, Volkswagen’s executive committee praised his contribution to the company. The board plans to make a recommendation about his replacement at its Sept. 25 board meeting.

“Winterkorn had no knowledge of the manipulation of emissions data,” read the board’s Sept. 23 statement, in part. “The executive committee has tremendous respect for his willingness to nevertheless assume responsibility and, in so doing, to send a strong signal both internally and externally. Winterkorn has made invaluable contributions to Volkswagen. The company’s rise to global company is inextricably linked to his name.”

In addition to federal and California probes, Volkswagen officials said they are conducting their own internal review. Those responsible “will be subject to the full consequences,” the board said. The board has set up an ad hoc committee to determine the company’s next steps. It added a criminal investigation may be necessary and submitted a complaint to the state prosecutor’s office in Brunswick, Germany.

Winterkorn departure comes at a time when the German automaker surpassed Toyota as the world’s largest automaker for the first half of 2015.

“Volkswagen needs a fresh start — also in terms of personnel,” Winterkorn said. “I am clearing the way for this fresh start with my resignation. The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”

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VW Interim Chairman to Stay On, Hunt for Piech Successor Continues: Bild

Volkswagen is still looking for a successor to former chairman Ferdinand Piech, meaning the interim holder of the position, Berthold Huber, is likely to stay until at least the end of the year, reports Reuters.

Following the departure of patriarch Ferdinand Piech in April, who resigned after losing a showdown with Chief Executive Martin Winterkorn, former union boss Huber was meant to hold the role for only a few months, Bild am Sonntag reported.

But one candidate, Wolfgang Porsche, who already sits on the supervisory board, has said he is not available for role, Bild said without citing its sources.

The paper said Porsche’s nephew, Ferdinand Oliver Porsche, is also a candidate, as is Winterkorn.

Volkswagen declined to comment on the article.

Separately, Sueddeutsche Zeitung reported on Saturday that works council boss Bernd Osterloh felt he was better off staying as part of the works council, rather than taking up a position on the carmaker’s executive board, as had been under discussion.

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VW Does Not Need Chairman Until New Structure in Place – Labour Chief

WOLFSBURG, Germany – Volkswagen needs to come up with a new structure before thinking about appointing a permanent chairman, the powerful labour chief at Europe’s biggest carmaker said in an interview, reported Reuters.

For the first time in more than two decades, Volkswagen no longer has Ferdinand Piech at the helm, a corporate scion who controlled the balance of power between the interests of shareholders and workers representatives.

Analysts and investors had hoped for the appointment of a strong chairman to work with Chief Executive Martin Winterkorn to tackle some of the company’s problems, such as a low profitability at the core VW brand, which posted an operating margin of 2 percent in the first quarter.

Since Piech was ousted in April, Volkswagen’s workers representatives have sought to exert more influence over strategy, to strengthen the focus on raising production efficiency without cutting jobs.

“We want to first have a debate about the company structure, then we can talk about a supervisory board chair,” Bernd Osterloh, who is head of VW’s works council, told Reuters.

Winterkorn promised to present a new company structure by October after surviving a showdown with Piech in April, thanks to support from Osterloh and the State of Lower Saxony.

Workers representatives control half the seats on VW’s supervisory board while Lower Saxony, which owns 20 percent of the company, has another two seats, meaning they could potentially veto any candidate for chairman.

The power vacuum at the top comes at a crucial time for Volkswagen. The company wants to raise profits and boost sales in the United States in a bid to overtake rivals such as Toyota and become the best selling carmaker in the world.


In the past, Piech played a key role helping to chart the carmaker’s strategic direction, first as chief executive and then as chairman of Volkswagen.

Piech masterminded a push into so-called modular construction techniques and bought truckmakers MAN and Scania, as well as Bentley, Bugatti, Lamborghini and Porsche and took the Audi brand upmarket.

In a bid to improve profitability, the company has long faced calls to cut fixed costs in Germany and improve production efficiency at its factory in Wolfsburg, where 50,000 of its nearly 600,000 employees around the world work.

Osterloh and representatives from Lower Saxony, where Wolfsburg is based, have been opponents of any such cuts and are now in a stronger position, since Winterkorn relied on their backing to fend off Piech’s challenge.

Rather than opening the door to deeper cuts in Wolfsburg and other German VW plants, Osterloh’s proposals for a new structure would further centralise power at the company’s headquarters in Lower Saxony.

For example, he wants the company’s 12 brands to stick to specifications set out by headquarters so VW can benefit from economies of scale across the board, rather than making costly modifications to suit the needs of individual brands.

“Corporate headquarters needs to be able to supervise whether the technical specifications of the modular platforms have been adhered to,” Osterloh said.

He is also demanding the management board be reduced and the corporate structure be adjusted to reflect the company’s various modular production platforms: MQB for small to mid-sized cars, MLB for larger vehicles and MSB for sports cars.

At the moment, Volkswagen Group’s structure is devolved and based around its various brands such as Audi, Lamborghini, Bentley, Bugatti, Skoda, Seat, Ducati, MAN and Scania.

“The company needs to be able to take decisions quicker, and a smaller management board. Regions need more competence to take decisions,” Osterloh said.

Volkswagen’s management board is made up of nine members and includes positions responsible for procurement, China, commercial vehicles, production, sales and Audi.

Osterloh declined to elaborate on how the board should be reduced, but said the company should think about whether the board needs members for production and sales.


Osterloh said a new company structure should be ready to be presented in September, including a strategy that goes beyond 2018. He is against the idea of raising profits by selling off some of the company assets, such as MAN Diesel & Turbo.

“Before we sell anything we will make acquisitions in this area,” Osterloh said.

Expansion is also his preferred strategy for fixing problems in the United States. He said that to succeed going forward, the company should think about making large pick-up trucks.

“We want to accelerate efforts to catch up with rivals. To do this, a pick-up is needed in the medium term,” Osterloh said.

As a stop-gap solution, VW has appointed Berthold Huber, a former boss of the IG Metall labour union as interim chair, pledging to find a permanent chairman quickly.

Asked whether Wolfgang Porsche, head of the family which controls Volkswagen, could become chairman, Osterloh said:

“I value and respect Mr. Porsche, we worked together in a confidential and close manner in the past weeks, but the structure has to take precedent. The question of the supervisory board chairman still has some time to be resolved.”

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VW’s Audi Sales Up 2.5 Percent in April to 152,850 Cars

Volkswagen’s Audi luxury division said on Friday sales increased 2.5 percent in April to 152,850 cars and sport-utility vehicles, the highest-ever level recorded for any month in the carmaker’s history, reported Reuters.

Sales in Europe edged up 0.9 percent as gains in Italy and Spain offset a 42 percent slump in deliveries in Russia to 2,116 vehicles, Ingolstadt-based Audi said.

In the Americas, sales were up 12.7 percent, bolstered by a two-thirds increase in Brazil to 1,856 cars and a 37 percent jump to 3,219 cars in Canada.

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