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Volkswagen Group's Vision 2030 strategy could bring revolution to the brands

One would expect a corporate plan called "Vision 2030," looking 11 years ahead through wildly tumultuous times, to involve great change and numerous forks in numerous roads. According to Automobile's breakdown of Volkswagen's path forward, though, the plans contain some lurid potential surprises. The ultimate aim is return on investment, and that means ruthless reorganization of a conglomerate with eight primary car brands, two car sub-brands, and Ducati motorcycles. The first two Vision 2030 cornerstones Automobile mentions are near boilerplate: Production network restructuring, and "streamlining of key technologies." The latter two are the ones that could upend what we know as the Volkswagen Group: focusing on the Group's core brands — meaning Audi, Porsche, and VW — and transitioning to EVs, autonomy, and other mobility solutions. Based on the report, a quote from Audi's CTO referring to the Audi brand could cover how the Group plans to handle all of its brands: "We need to find a sustainable solution for the indefinite transition period until EVs eventually take over." The boutique divisions adjacent to carmaking, Ducati and Italdesign, look likely to be spun off. For the halo car brands — Bentley, Bugatti, and Lamborghini — apparently shareholders want double-digit returns on investment, and the trio doesn't have long to hit the target. One eyebrow raiser is when the report states, "Bugatti is tipped to be gifted to [ex-VW Group Chairman] Ferdinand Piech." Piech fathered the Veyron during his tenure at VW, and it was thought he commissioned the La Voiture Noire, but he's lately stepped so far back from VW that he sold all his shares in the Group. Automobile quoted a senior strategist as saying of money-losing Bentley, "Why invest on a backward-looking enterprise when you can support a trendsetter? A proud history and excellent craftmanship alone don't cut it anymore." We guess no one at Ferrari, McLaren, or even Porsche got that memo. Bentley is reportedly close to being put in time out, and if brand CEO Adrian Hallmark can't right the Crewe ship, the hush-hush Plan B is to prop the Flying B up enough to lure a buyer. As for Lamborghini, caught between two masters at Audi and Porsche, even record-breaking numbers at the Italian supercar maker barely staved off sacrilege. It's said that VW brand CEO Herbert Diess considered putting a 5.0-liter Porsche V8 into the Aventador successor.

Is Audi getting complacent and suffering from brain drain?

The argument is made in a Reuters article: Audi is falling behind other luxury brands, such as Mercedes-Benz and BMW, due to a lack of research-and-development spending and "brain drain," or the migration of top executives and R&D chiefs to other parts of the Volkswagen Group. Reuters notes that Audi's current R&D chief is the third in 16 months.
Audi, which contributed to 40 percent of VW Group's $11.6 billion in profit the first nine months of the year, is delivering cars at a record pace: 1.31 million were delivered from January to October 2013 versus BMW's 1.35 million. Yet Audi, Reuters reports, doesn't have a halo car akin to BMW's new electrified i3 and i8 or an answer to Mercedes' plug-in-hybrid S-Class, and the R&D spending at Audi is less than BMW and Mercedes by a fair margin. It's noted in the article, however, that Audi benefits from other R&D spending within VW Group.
Reuters mentions that BMW "trumpets its new 'i' series" and the new Mercedes CLA and GLA ranges are winning "rave reviews" as part of its argument that Audi's recent lack of technological innovation could hurt future sales. Those cars do pack tons of new technology, some of which are firsts for mainstream production cars. But last time we checked, the i3 could be causing BMW's stock to slide, the CLA isn't receiving the rave reviews that Reuters would have you believe and the GLA hasn't been reviewed yet.

Coronavirus prompts VW to stop production throughout Europe

FRANKFURT — Volkswagen Group, the world's biggest carmaker, is suspending production at factories across Europe as the coronavirus pandemic hits sales and disrupts supply chains, the company said on Tuesday. The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, also said that uncertainty about the fallout from coronavirus meant it was impossible to give forecasts for its performance this year. "Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands," Chief Executive Herbert Diess said on Tuesday. Volkswagen's powerful works council concluded it was not possible for workers to maintain a safe distance from each other to prevent contagion and recommended a suspension of production at its factories from Friday. Production will be halted at VW's Spanish plants, in Setubal in Portugal, Bratislava in Slovakia and at the Lamborghini and Ducati plants in Italy before the end of this week, Diess said. Most of its other German and European factories will prepare to suspend production, probably for two to three weeks, while Audi said separately it would halt output at its plants in Belgium, Germany, Hungary and Mexico. Volkswagen's vast factories in Chattanooga, Tennessee, in Puebla, Mexico, and plants in Brazil were not affected, but that would depend on how the coronavirus spreads, VW said. Volkswagen has 124 production sites worldwide of which 72 are in Europe, with 28 in Germany alone. "2020 will be a very difficult year. The coronavirus pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts," Diess said.   Production in China resumes Volkswagen Group sold 10.96 million vehicles last year, putting it ahead of Toyota based on the latest figures from the Japanese carmaker. Globally, VW employs 671,000 people and it delivered 4.86 million vehicles to European customers in 2019. Only last month the car and truck maker based in Wolfsburg, Germany, predicted that vehicle deliveries this year would match 2019 sales and forecast an operating return on sales in the range of 6.5% to 7.5%. "The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group.