Post Emission Scandal, Volkswagen Focuses on Streamlining Its Brand and Manufacturing Portfolio

Published Date : Jun 16, 2016

Auto manufacturer Volkswagen is taking efforts to improve its brand image in the aftermath of the emissions cheating scandal. The Volkswagen Group is expected to sell some of its assets soon and shift its focus on the development of electric vehicles. According to Matthias Mueller, the CEO of the Volkswagen Group, the company’s current business strategies include moving into car-sharing ventures. The company is facing the largest crisis in its history with the unearthing of the emissions scandal. The company’s shares hit the lowest when the scandal was revealed. Since October 2015, the company’s share value has increased by 40% in Frankfurt stock market.

Before the emissions scandal, Volkswagen was focusing on expanding its business. The company acquired heavy duty truck manufacturer Ducati, Porsche, and Scania. According to the industry experts, the centralized and rigid management structure of the company is to be blamed for low profits. Furthermore, the brand has been struggling to keep up to the changes in the automotive sector. The emissions cheating scandal costs the company fines worth US$18.2 bn. Apart from this, the auto manufacturer is facing a deadline next week in the U.S. regarding a solution for the company’s diesel-powered vehicles with cheat devices.

Volkswagen Reviews Its Brand and Side Businesses

According to Mueller, the Volkswagen Group is reviewing it 12 brands and side businesses to help the company navigate out of the present crisis. The component manufacturing unit will be consolidated into one single division. This new unit will employ about 70,000 employees across two locations worldwide. In 2015, the company earned revenue worth US$14.6 bn Euros. While selling off some of its assets including JVs with Chinese forms, Volkswagen is expected to retain its components unit.