While not actually setting out Volkswagen Group's new mid-term strategy, new CEO Matthias Müller has outlined five key steps to “realign the VW Group” and effectively replace the current company strategy, in the wake of the company's current crisis.
Müller says the cornerstones of the Group’s Strategy 2025 will be developed over the coming months, and the strategy itself will be unveiled mid-way through next year, replacing the current Group Strategy 2018.
Go deeper with GlobalData
In his latest remarks, Müller appears to recognise that the company's existing strategy may have been misunderstood by people outside – and inside – VW Group as placing growth, scale and volume above all else, something that many analysts and commentators believe contributed to the company's current woes.
“We have to look beyond the current situation and create the conditions for Volkswagen’s successful further development,” said Müller.
The Volkswagen CEO said his top priority is to support the customers affected by the diesel issue. “Our customers are at the core of everything that our 600,000 employees worldwide do,” he said. According to Müller, Volkswagen is working intensively to develop effective technical solutions. In contact with the Kraftfahrtbundesamt (KBA – German Federal Motor Transport Authority) the implementation is set to begin in January 2016.
Müller’s second priority is to systematically drive forward and complete the investigation into what happened. “We must uncover the truth and learn from it”, he said, adding that Volkswagen is being extremely thorough in its analysis. Deloitte has been engaged in addition to the steps already announced. According to Müller, those responsible for what has happened must “face severe consequences”.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataMüller’s stated third priority is to introduce new structures in the Volkswagen Group. “The key point is that Group management will be decentralised to a greater extent in the future,” he said, with more independence for the brands and regions. Müller stated that the Board of Management will focus on addressing cross-brand strategies, leveraging synergies and ensuring that group resources are used effectively. “We will review in detail our current portfolio of more than 300 models and examine the contribution that each one makes to our earnings.”
As his fourth priority, Müller said he is “driving forward a realignment of the group’s culture and management behaviour”. He noted that the pursuit of perfection, the employees’ commitment and social responsibility in the Volkswagen Group must be retained. However, he believes that changes are necessary in how Volkswagen communicates and how it handles its mistakes. “We need a culture of openness and cooperation,” he said. Müller also called on everybody at Volkswagen to display more courage, greater creativity and a more entrepreneurial spirit in their dealings with one another.
He said the fifth priority will be to transform the Group’s Strategy 2018 into a Strategy 2025. His remarks here get to the heart of what many feel has created the conditions – growth at all cost to become global number one – under which the diesel emissions scandal could happen.
“Many people outside of Volkswagen, but also some of us, did not understand that our Strategy 2018 is about much more than production numbers. A lot of things were subordinated to the desire to be “Faster, Higher, Larger”, especially return on sales.” According to Müller, the point is not to sell 100,000 more or fewer vehicles than a major competitor. Instead, the real issue is qualitative growth. Müller announced that the cornerstones of the Group’s Strategy 2025 will be developed over the coming months, and that it would be unveiled mid-way through next year.
Earlier this week it emerged that Toyota has overtaken Volkswagen Group to sell more vehicles globally in the first nine months.
See also: JAPAN: Toyota takes back global number one spot from VW
