Volkswagen Mulls Divisional Revamp

PRAGUE–Volkswagen AG is considering reorganizing its operations into three divisions, but the company is still far from any decisions, a senior executive told The Wall Street Journal.

Robert Buechelhofer, board member for sales and marketing, said he sees some merit in reorganizing VW’s nine brands into three operational divisions — one for mass-brand cars, one for premium cars and another for commercial vehicles. “There is some logic behind it,” he said.

The possibility of VW reorganizing its operations first arose last week when Chairman Ferdinand Piech told a German newspaper that he favored a simplification of VW’s operational structure. VW has officially declined to comment on that report.

It is unclear how a new structure would affect VW’s management board,but Mr. Buechelhofer said the company isn’t considering shaking up its eight-member board, which is now organized along functions such as strategy, quality, and research and development.

A reorganization would be in keeping with a trend among automobile companies to give their luxury brands greater independence from the rest of their operations. In 1999, for example, Ford Motor Co. formed its Premier Auto Group composed of five more-expensive brands, including Volvo and Jaguar. Mr. Buechelhofer, speaking at an Automotive News Europe conference, said that if VW were to decide to form a luxury division, it wouldn’t spin off the unit.

The luxury division would likely include the Audi, Bugatti, Bentley and Lamborghini brands; the mass-car division would comprise most, but not all, of its VW models, Skoda and Seat. VW also makes commercial vehicles under its own brand and holds a stake in Swedish truck maker Scania AB.

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