Volkswagen Targets China in Group Shakeup

Under the realignment, a new group management department for China will be established under Jochem Heizmann, formerly in charge of commercial vehicles.

Volkswagen AG (IW 1000/10) announced a major shakeup to increase its focus on the Chinese market and strengthen its heavy-truck and bus sector.

"This fundamental reorganization is the right response to the increasing challenges," Volkswagen CEO Martin Winterkorn said in a statement.

"At the same time, we are laying the foundations for keeping the group and its brands on their successful course even in a difficult market environment."

Under the realignment, a new group management department for China will be established under Jochem Heizmann, formerly in charge of commercial vehicles, "thus underpinning the significance of the largest sales market in the world," the company said.

"The Volkswagen Group delivered some 2.3 million vehicles in the China region in the 2011 fiscal year and reported a pro rata operating profit there of 2.6 billion euros ($3.4 billion)," the automaker noted.

On the commercial-vehicles side, which VW called "the second pillar" of its success, Leif Oestling, head of Scania, will head a new department to enhance cooperation between MAN, Scania and Volkswagen Commercial Vehicles to "harness the substantial worldwide growth potential in this segment."

Volkswagen also announced a major reshuffle of top managers within the group from Sept. 1, affecting brands including MAN, Scania, Audi, Bentley and Bugatti.

The automaker said all the appointments have been made within the company, "including three female top managers who will assume responsibility at brand board-of-management level."

Winterkorn said: "Our clear goal is to continue our successful course of recent years with great momentum and stability. I am convinced that now more than ever, the Volkswagen Group has the right people in the right positions to make our strategy 2018 a success."

While all VW brands have a high degree of operational autonomy and responsibility, "we are now further intensifying knowledge transfer and management links within the Group," he added.

In April, Volkswagen, whose makes also include Skoda and SEAT, said that profits raced ahead in the first three months of this year, driven by strong demand worldwide for all of its brands.

Net profit soared 86% to 3.186 billion euros, while operating profit increased 10.2% to 3.209 billion euros as the auto giant sold 11.3% more vehicles -- 2.26 million worldwide -- in the three-month period, it said.

Copyright Agence France-Presse, 2012

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