New VW chief to create PAG-like group for luxury marques
The latest news in the regime change at Volkswagen is that incoming group chief Prof. Martin Winterkorn is planning some big changes in management structure across the entire corporate spectrum.
Although several don't operate in the US market, Volkswagen AG has grown to GM-like proportions in the number of marques under its umbrella. However, rather unlike GM and other auto-making conglomerates, Volkswagen group members don't cooperate as much in the development of new products. (The Volkswagen and Audi brands, for instance, will often develop separate vehicles with different engines, sometimes even competing against each other, but which could be combined into one project.) As Audi chief, Winterkorn can't have been happy to see Volkswagen stealing any of its market share.
Winterkorn plans on changing all that, placing the group's marques into two categories: volume and premium. Like Ford's Premier Automotive Group (which includes Volvo, Land Rover, Jaguar and Aston Martin), VW's new "premium" group will include Audi, Bentley, Lamborghini and Bugatti, while the "volume" group will include Volkswagen, Seat and Skoda. All this should mean better products offered in more packages at lower costs with reduced development times. And that's something any car buyer could appreciate.
What else can we expect from Winterkorn? It's doubtful he'd be willing to throw as much resources behind Bugatti as did his predecessor, but as we can see from Audi's diesel-fueled domination at Le Mans, he evidently believes in the benefits of racing.
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[Source: Motor Authority]
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Reader Comments (Page 1 of 1)
scargo 5:10PM (11/13/2006)
This is destructive move designed to placate institutional investors and based on business strategy from a half-century ago. Today we know that competition breeds success, no matter if the competition comes from within or outside the company. VW has now, in essence, gutted itself and the ability of the individual marques to create unique products that win in the marketplace. Instead we'll be seeing Ford/Lincoln type products because internal politics will drive decisions as much, or more than, market forces.
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Tool 5:15PM (11/13/2006)
Great idea! Premier Automotive Group has been an unmitigated success.
Seriously, putting the luxury marquees under one structure makes sense for all kinds of reasons, but I'm not sure I would want to be compared to PAG.
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doglet 5:26PM (11/13/2006)
i find it funny that corporate execs have to quantify things like Audi is a premium brand while VW is a volume brand.
everyone else on the face of the earth already knew that.
Audi seriously needs to move away from VW. why would anyone spend 10-15K more to get a a3 when you can get a mechanically identical 5 door GTI?
audi needs to move away from fwd. there are just too many comprimises in terms of driving dynamics, weight distrubution and performance.
either go all AWD or rwd with awd option.
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Alex 5:36PM (11/13/2006)
Winterkorn has tried to move Audi to rwd (w/awd as an option), but Pischetsrieder shot him down.
Hopefully, now Prof.W can put that idea into action.
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UK-KID 5:42PM (11/13/2006)
Where do you guys come up with all that RWD is better than FWD Bull ??
There are no advantages to RWD in normal vehicles, Especially in LOW GRIP Conditions where the FWD vehicle has an Advantage hence the popularity in Europe & UK
4WD/AWD will always be the best for Traction so I will leave that alone.
For High Performance Vehicles/Engines the FWD option is not so good as the Torque Steer and UnderSteering Tendencies will not suffice for good Driving Dynamics but for anything up to about 250Bhp FWD is Better than RWD.
(Unless you live in Arizona/Califonia or Texas type States with Dry days 360 days of the year)
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Gunnar 5:43PM (11/13/2006)
Bentley, Bugatti, and Lamborghini - my how Audi will be included in rarified company.
http://www.automobilesdeluxe.blogspot.com
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Fabulo 6:20PM (11/13/2006)
"The Volkswagen and Audi brands, for instance, will often develop separate vehicles with different engines, sometimes even competing against each other, but which could be combined into one project."
Where have you been?
Skoda, SEAT, VW, Audi: 70% shared platform, parts, suspension, engines, transmission. With a huge overlap between SEAT and VW and a big overlap overall.
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ME 6:28PM (11/13/2006)
"However, rather unlike GM and other auto-making conglomerates, Volkswagen group members don't cooperate as much in the development of new products. (The Volkswagen and Audi brands, for instance, will often develop separate vehicles with different engines, sometimes even competing against each other"
Well I can't think of a better company to follow than GM...
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doglet 6:31PM (11/13/2006)
"Where do you guys come up with all that RWD is better than FWD Bull ??...There are no advantages to RWD in normal vehicles"
if you actually like driving, there is no substitute for RWD.
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Milos 6:35PM (11/13/2006)
how there's no Porsche in the premier group, or anywhere else? Isn't it also the part of VW group and it's biggest shareholder?
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doglet 8:28PM (11/13/2006)
in a few years audi and porsche will be in direct competition just like vw was moving in on audi from below a few years ago.
there is plenty of room for vw audi and porsche if all 3 just stick to what they do best. vw should be small affordable efficient quality fun to drive cars and family cars. audi should be sports sedans from 40-100k. porsche should make pure sports cars, they will always have the 911 but the cayman is the real next step.
if the 3 brands focused on those things they would avoid flops like the phaton and avoid stepping on each others toes.
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Capn Jack 6:54PM (11/13/2006)
Porsche is an independent company. It does however own about 20% of VW.
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rbw 8:55PM (11/13/2006)
"why would anyone spend 10-15K more to get a a3 when you can get a mechanically identical 5 door GTI?
Huh? Where can I get a 5-door GTI? The 2-door GTI starts at $22k, the A3 at $25k. So I'm not sure where you get $10-$15k difference.
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Howard Kerr 10:55PM (11/13/2006)
My memory isn't what it used to be, but I could have sworn that it was only 5 to 10 years ago that VAG last shuffled (reshuffled?) it's various brands. At that point, all the supercar marques within the company were a separate group, and there were two other groupings of marques. But then, that was way back before it looked like Bugatti was going to be producing nothing but "prototypes" and Audi wasn't considered to be the luxury marque (at least within VAG) that it (apparently) is today.
As others have said, copying the example of Ford and it's PAG...or GM in general, isn't what most folks would call a plan written with overwhelming success in mind.
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Tom 6:16AM (11/14/2006)
#14, you're right, they regrouped their marques a couple of years ago, forming one "sport" group with Audi, Lambo and Seat as well as one "luxury" group with VW, Bugatti and Skoda.
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Vega 7:51AM (11/14/2006)
@rbw: A 5door GTI is available in all European markets... however, I doubt there is a 10-15k difference between an equally equipped GTI and A3. Audi offers different, more upscale styling (completely different styling/interior no GM style badge engineering job). Audi Interior quality is considered top of the industry. The current A4 and A6 use proprietary platforms not shared with other VW brands. While no one would compare a Passat with a 5 series BMW, the Audi A6 is a direct competitor, hence the higher prices.
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rbw 8:19AM (11/14/2006)
@Vega: Actually I just looked and found the 4-door GTIs are out in the US now, just not on the VW website yet. One at my local dealer has a sticker of $28,375, another one is $29,450. Those prices are totally absurd, but I'm sure like you say that a similar equipped A3 isn't $40k+.
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