The Strategist

Head of Volkswagen announced major "paradigm shift" in the company's history

06/16/2016 - 15:57

Volkswagen will focus on the most attractive and fastest growing segments of the market. To do this, the company’s current portfolio, consisting of 340 different models, will be optimized based on characteristics of the regional markets and customer needs. In the coming months, Volkswagen will present a detailed strategic program for each brand with concrete steps and financial goals before the end of this year.
Regional development strategy will focus on particularly attractive automotive markets such as North America and China.

One of the priorities include development of electric vehicles. Volkswagen plans to launch more than 30 new EVs by 2025. Sales are expected to be about two - three million units per year, which is about 25% of expected total number of vehicles sold by concern.

Auto giant will also give consideration to the emerging autonomous driving technologies. The company sets a goal to develop a competitive self-driving system by the end of the decade. Technologies of the future will be boosted by billions of investments. 

Volkswagen is not going to part with commercial traffic brands Scania and MAN. These business units will be evolving from the car manufacturer to a supplier of intelligent solutions for transportation.

All of this should increase operating income of the auto giant by 8% before 2025. It is also planned that the return on capital invested in the automotive division will exceed 15%. The coefficient of dividend payments to shareholders will be maintained at around 30% of net profit.

In late May, when commenting a $ 300 million-worth investment in online taxi service Gett, Mueller said that "cars are no longer our only key product," reported The Wall Street Journal. "Our key product, which we promise to the people, is portability" - elaborated VW’s CEO.

VW Investments in Gett were made as part of "attempts to go beyond the large corporate crisis and launch a new division focused on new technology." Gett’s creator Shahar Waiser, in turn, explained that the deal will allow his service to "accelerate its expansion in Europe and strengthen its position in New York."

In April, Head of Volkswagen Group Matthias Müller at the annual company’s conference identified priorities for the near future as "the return of consumer confidence." 

"The desire to set sales records has at least been suspended, as a top priority for us now is to return consumer confidence after 'Dieselgate', - said Müller. – However, that does not mean that the Volkswagen Group has set a less ambitious goal. There are several aims priorities of which were adjusted. In the next few months, all efforts will be made to work with consumers and their trust in the brand. "

Mueller was appointed Head of Volkswagen in September 2015 to help the company overcome the consequences of the scandal involving falsification of data on diesel vehicles emissions.