Volkswagen Restrategizes Top Level Honchos As It Expands In China
Unnerved by a slowing Chinese economic growth, Germany's Volkswagen AG over the weekend announced a massive shakeup of its top level honchos to realise ambitious growth plans in the second-largest economy.
Volkswagen AG opened and appointed Jochem Heizmann to fill up a management board position that is solely focused on China. The German automaker also selected a new trucks chief as well as changed three Audi board members.
"Our company has grown strongly and become more international in recent years. This fundamental reorganisation is the right response to the increasing challenges," Martin Winterkorn, chief executive of Volkswagen, told reporters at a news conference in Stuttgart.
Volkswagen AG explained the reshuffle is essential to better control and maintain the company's outstanding growth. Volkswagen AG, since Mr Winterkorn's entry in January 2007, has churned in remarkable sales from 5.7 million vehicles annually to nearly 8.4 million, Reuters News reported. It was the first foreign automaker that entered China 30 years ago.
"We want to further increase our pace there," Mr Winterkorn said. Last year, Europe's biggest carmaker sold a total of 2.3 million cars in China alone, contributing $3.2 billion to overall operating profit.
Mr Heizmann, who used to be head of the group's truck business, will be succeeded by Leif Ostling, the chief executive of Sweden-based truck manufacturer Scania AB. Ostling's position will go to Scania board member Martin Lundstedt.
"All of the appointments are internal," Mr Mr Winterkorn said at the news conference. "It is important to have people in leadership positions who know the company."
Volkswagen AG recently acquired majority stakes in Scania and Germany's MAN. Thus, Ostling's focal work now is to create a seamless cooperation between the two companies and merge it with Volkswagen's own utility division.
"They're admitting that China is so unique a market that they can't manage it together with the other businesses - it's not a different country, it's a different planet. You need to treat China independently from the rest and not tether it to the mothership," analyst Christoph Stuermer tols Reuters News.