Winterkorns four holding company strategy would unwind Piechs autonomous brands approach. And unseat group sales and marketing chief Christoph Klingler

Winterkorn's four holding company strategy would unwind Piech's autonomous brands approach. And unseat group sales and marketing chief Christoph Klingler

Volkswagen's steering committee met ahead of the weekend to discuss development of a new structure for the company which would gather 12 brands under four holding companies.

Reuters sources had said the meeting was not about personnel but about a new structure being drawn up to tackle problem areas laid bare by the showdown between its chief executive Martin Winternkorn and now ousted chairman Ferdinand Piech.

"They are talking about daily business and about structures, not about personnel," one of the sources said of the meeting.

Volkswagen is looking for a chairman to replace Piech, who quit in April after a confrontation he had provoked with Winterkorn.

Berthold Huber, the former boss of trade union IG Metall is acting as interim chairman.

On Monday, German paper Handelsblatt, citing company sources, said former BMW manager Herbert Diess would be in charge of the holding company that would include the four core, high volume VW, Skoda and Seat passenger car brands and would scrutinise the high costs of the German factories.

Audi, Lamborghini and Ducati will form another holding company. Porsche, Bentley and Bugatti would be grouped together in a single unit and VW Commercial vehicles would form another division with the Scania and MAN heavy truck brands, Handelsblatt said, according to Reuters.

The report noted reorganisation Piech's strategy of giving individual brands autonomy to encourage competition between them. Many industry watchers said Piech made VW Group difficult to control and slow to react to market changes. The group has 600,000 employees worldwide and 119 factories.

The new structure was designed to improve efficiency and make decision-making quicker, Handelsblatt said. The head of each holding company will sit on VW Group's management board. Group roles such as the groupwide head of sales and marketing post held by Christoph Klingler would be eliminated.

According to Reuters, Evercore ISI said the bundling of the mass market brands VW, Skoda and Seat would create a unit that sells 7.6m vehicles a year with with combined revenues of EUR119.2bn; earnings of EUR3.2bn and an operating margin of 2.7%, based on 2014 results.

The new structure primarily addresses VW's mass market businesses, Evercore ISI global automotive research head Arndt Ellinghorst, said in a researdch note.

"VW, rightly so in our view, didn't go to the extreme of bundling Audi and Porsche under one roof," Ellinghorst wrote. "Allocating Bugatti and Bentley to Porsche isn't a big deal, at least not for shareholders. For Audi things remain unchanged. Skoda would be most affected and potentially disappointed given its very strong performance over the years," he said, according to Reuters.

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