Volkswagen Announces Reorganisation of Brands

26 November 2001

German auto group Volkswagen is to divide its array of brands into two divisions – sporty and traditional.

The sporty segment will have at its head the Audi marque, and also encompass Lamborghini and Spanish make Seat. Meanwhile, the Volkswagen brand will lead the auto giant’s traditional side, which will include Bugatti, Bentley and Czech business Skoda.

The move is designed to better differentiate the group’s brands, whose identities, VW executives admit, had been blurred by parts-sharing strategies and brand-repositioning campaigns. However, some industry observers fear the group will try to force its marques to fit the new groupings – Audi, for instance, currently has both sporty and traditional cars on the market.

Announcing the decision on Friday, VW revealed there was another motive behind the reorganisation: to enhance the group’s investor-appeal. “Reporting in the Volkswagen group will follow this structure, thereby improving the transparency of the company in the interests of our shareholders and customers,” it said.

The restructuring will coincide with the arrival of new chairman Bernd Pischetsrieder, who takes up the post in April and will also head the new VW-led group.

News source: Wall Street Journal