The future of Volkswagen

Jun 23 2016

The future of Volkswagen

Volkswagen CEO Müller is questioning the future of the diesel at the AGM.

In an interview he talked about an ‘epochal change’ for the industry. Electro-mobility is getting cheaper and the VW emission scandal is also still burdening the organisation hugely.

He further states that he does not believe in investing further into greater development of the diesel engine. The statement comes after Volkswagen had tampered with millions of diesel vehicle software to pass exhaust tests. The fraud was uncovered in the US and had to take all diesel vehicles off the market. Whether Volkswagen will offer diesel vehicles in the US ever again remains unclear. The company has set aside 16.2 billion euros, or $18.2 billion, to cover fines and compensation to Volkswagen owners.*
VW stock exchangeIt was just announced this week that Volkswagen has reached settlement agreements with the United States Department of Justice and others. VW Media department states: ” The proposed settlement program includes vehicle buybacks and lease terminations, emissions modifications (if approved) and cash payments to affected customers for approximately 475,000 eligible 2.0L TDI vehicles. Volkswagen agrees to $2.7 billion environmental remediation fund and to invest $2.0 billion in initiatives to promote the use of zero emissions vehicles in the U.S.”*



Here is an excellent infographic by the NY Times explaining the Volkswagen emission scandal. More here.

Volkswagen had presented the group strategy – a transformation strategy – last week and announced massive changes.

The brand will continue to massively expand in electro-mobility and invest billions in new mobility areas.

The automotive group intends to reduce the number of its products significantly. The variety of brands will fall well below 300. At the brands Seat, Skoda, Audi, Porsche and VW have about 340 different models in their range.

On top of these changes the scandal has had serious implication on the top management under investigation by German prosecutors.

Volkswagen havolkswagen-matthias-mueller-dieselmotors a definite cost problem. The organisation employs about 610,000 people.  VW produces about the same number of vehicles as Toyota, which has 344,000 workers.*

The brand hasa very high cost structure and has been loosing ground to other brands. Profits are reported to have dropped by 19%.






*Source: NYTimes

*Source: Spiegel, Zeit, dpa


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