Paefgen, chief executive of Audi, Volkswagen Group’s premium car subsidiary, may
be leaving his job within the next month according to a report in the Financial

Audi has come under strong attack from VW Group boss Ferdinand Piëch this
year and an announcement over Paefgen’s future could follow the next VW supervisory
board meeting later this month.

The criticism of Audi’s strategy by Piëch has been very public and has
surprised many observers.

The premium Audi brand made more than 650,000 of VW’s 5.2 million cars last
year. While VW’s other brands fight in the highly competitive market for high-volume
cars, Audi has been able to enjoy higher profit margins.



However, comments by Ferdinand Piëch published in the Frankfurter Allgemeine
Zeitung newspaper this summer clearly showed a degree of frustration with the
Audi strategy:

"Skoda is the only really cocky brand in the group and they show success.
Audi in contrary is in puberty and has no idea where to go. I had hoped that
they had continued where I finished in 1992 – focussing on more innovative technology
and more interesting demand….I will watch that the still good profitability
of Audi will not be burned."

Franz-Josef Paefgen could be replaced by Martin Winterkorn, head of product
development at VW, according to the FT report.

The prospective shake-up follows the appointment of Bernd Pischetsrieder, former
chairman of BMW, as Mr Piech’s successor. Mr Pischetsrieder is due to take over
next April.

A new structure for the VW premium brands is thought to be on the cards, taking
a cue from Ford’s PAG.

However, the VW plans are rumoured to include two new divisions – a sporty
group embracing Audi, Seat and Lamborghini and a separate group comprising VW,
Skoda and Bentley.

More personnel changes within the group are expected.

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world’s car manufacturers: A financial and operating review (download)