Empire’s come and go, one thing they all have in common is that when they grow they become more difficult to manage and VW has found that managing all of its 12 brands under one roof is no longer a viable solution if the company is react quickly to changing market conditions.
Today Volkswagen has announced it is ‘de-centralising’ its core businesses into four separate holding companies run by four CEO’s. Herbert Diess, a former Manager at BMW will be in charge of the VW, Skoda and Seat brands.
Bugatti, Porsche and Bentley will be under the control of the current boss of Porsche, CEO Matthias Mueller. Current Audi CEO, Rupert Stadler will have control of Audi, Lamborghini and Ducati. VW’s truck division will be handled by former Daimler boss, Andreas Renschler.
Former VW Chairman, Ferdinand Piech, wanted to give all 12 brands individual autonomy in order to increase competition from within. However many within VW felt it was time to de-centralise control in order to improve efficiency, cut costs and more importantly speed up the process of decision making.
Putting VW, Skoda and Seat under one roof effectively creates a single entity that sells 7.6 million vehicles per year with operating margins of 2.7 percent, that equates to around 119.2 billion euros of revenues and earnings of 3.2 billion euros per year.
Currently VW employs 600,000 and has 119 factories located around the world.