Leadership Recriminations

VW to Launch Chinese Car

VW santana Caro Muhs
Volkwagen's Santana taxis are everywhere in Shanghai and Beijing. Will VW's new budget cars be embraced in the same way?
  • Why it matters

    Why it matters

    Volkwagen is fighting on all fronts to ensure its future success, overhauling and decentralizing its corporate structure and making budget cars that could increase its share of Asian markets.

  • Facts

    Facts

    • Herbert Diess takes up his post as chairman of VW passenger cars this week.
    • Volkswagen Automobiles, though the group’s largest brand, saw its operating return on sales decline from 2.9 to 2.5 percent in 2014.
    • Martin Winterkorn confirmed that VW would build a new range of budget cars in and for the Chinese market.
  • Audio

    Audio

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After weeks of silence, Volkswagen CEO Martin Winterkorn has spoken publicly for the first time since Ferdinand Piëch attacked him in Spiegel Online in April.

Mr. Winterkorn also announced new plans for a budget car to be produced in China.

In the Sunday edition of Bild, Germany’s most popular tabloid, Mr. Winterkorn first gave his version of the events that were triggered when the former supervisory board chairman said he had “distanced” himself from the popular CEO’s leadership. Mr. Winterkorn said he didn’t know why Mr. Piëch had distanced himself and called this the most difficult time in his career.

“This affected me deeply. Who wouldn’t be affected by such a thing?” he told Bild. The CEO said he had not sensed any estrangement at his meetings with Mr. Piëch. The two had worked together for 35 years and Mr. Winterkorn said he would have never considered throwing that away.

Now, though, what matters is moving forward and that is Mr. Winterkorn’s area of focus.

He said Volkswagen planned to build a budget car, saying that it must pay off for the automaker as well as for the customer.

“We will bring a family of budget cars onto the market starting in 2018 with an SUV, saloon (sedan) and a hatchback,” Mr. Winterkorn told Bild am Sonntag.

The cars will be manufactured in China and cost between 8,000 ($8,800) and 11,000 euros.

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