VW CEO Winterkorn to present new structure for automaker by October

Volkswagen Group CEO Martin Winterkorn has told senior staff that he will present a new structure for the automaker by October at the latest.

"We are preparing the company for the coming 10, 20 years," Winterkorn told 1,000 high-ranking VW employees at a meeting in the company's home town of Wolfsburg, Germany, on Thursday, with another 4,000 viewers at nearly 60 of the company’s 118 facilities worldwide watching by videocast.

“It is time to further develop our management model and rearrange structures. We must become faster, more efficient and more agile,” he said, according to Automobilwoche sources. Automobilwoche is a sister publication of Automotive News Europe.

Winterkorn made no reference to the changes under consideration but a supervisory board member said last month that the company will hold a special meeting in June to discuss further changes to its leadership structure, such as possibly aligning individual brands more closely.

Winterkorn said problem areas within the company are being tackled such as the company's flagging U.S. business, the delayed launch of a budget car for China and low profitability of the core VW brand.

"We will redouble our efforts everywhere where we are still punching below our weight. We have long since started tackling our tasks with the full support of the supervisory board," he said.

The CEO welcomed the coming arrival of former BMW executive Herbert Diess, who takes charge of the core VW brand on July 1. "He is the right man in the right position at the right time. I look forward to working with him," he told the meeting, according to sources.

Winterkorn said he still cannot understand why former VW Chairman Ferdinand Piech criticized his leadership but thanked Piech for his "enormous" contribution to the automaker.

A VW spokesman confirmed a management conference had been called Thursday on short notice.

Winterkorn's comments come as he returns his focus to business after a showdown with Piech led to the former chairman's shock ouster two weeks ago.

VW has pledged to make annual cost savings of 5 billion euros ($5.6 billion) at its passenger-car brand by 2017 as it seeks to close a profitability gap with global leader Toyota.

Henning Krogh

Report Here

Opels Image is at last turning around with a raft of brand new models.

Opel is succeeding in turning around its tattered image in Germany, the brand's marketing chief Tina Mueller said.

General Motors' money-losing brand has been harmed in its key home market by bad publicity over job losses and the closure of the Bochum factory. But a major marketing campaign and new models such as the Adam minicar and Mokka small SUV are winning back customers.

"Last autumn more people thought Opel as a brand was on its way down than on its way up, that has now changed thanks to the new models and with our new image campaigns," Mueller said.

Mueller said negative publicity over job cuts had not affected the brand in other European markets but in Germany owning an Opel car in Germany had become a social stigma, also in part due to an aging product lineup in the past. “The brand became an invisible wall in the heads of customers, people that said the car is super but I wouldn’t drive an Opel,” she said.

To fix the brand's image, Mueller, who joined Opel in August 2013 from the consumer goods industry, launched a marketing campaign called “Umparken im Kopf” – roughly translated to "change parking spots in your head."

The campaign took an unusual approach. Mueller deliberately left out any association to Opel as a brand initially and instead aimed at generating interest by challenging people’s preconceived notions and prejudices in general.

Only later did Opel take credit for the campaign and begin using it as an advertising slogan to position itself as a challenger of the status quo.

The brand's advertising for the Insignia midsize sedan was a success even though initial ads for the brand's top-line model did not mention the car at all. Opel took advantage of the popularity in Germany of Juergen Klopp, the charismatic trainer of soccer club Borussia Dortmund, as a brand ambassador.

In an advertising spot for the Insignia, an airline stewardess discovers a set of dropped Opel keys on the floor close to a curtain that divides business class passengers from those in economy.

Immediately assuming they must belong to a passenger in the economy class, the stewardess is surprised to find out that they belong to Klopp, who comes out from behind business class curtain to claim them without any sign of shame. “We sold 35 percent more Insignias since this relaunch,” Muelller said.

The brand still has a "way to go" in changing public perceptions but it is moving in the right direction, she said. "We have the foundation for progress. We are confident," Mueller told the Automobilwoche Congress here earlier this month.

New products such as the Karl minicar and a new-generation Astra compact, both launching next year, will continue the brand's revival, she said.

Opel vehicle sales in Germany were up 6 percent to 185,740 in the first ten months, giving it a 7.3 percent market share, an increase of 30 basis points, according to data from the German Federal Transport Authority.

Henning Krogh contributed to this report

You can reach Christiaan Hetzner

REPORT HERE