VW Strategist

Squeezing VW to Become Number One

HErbert diess picture aliance
Herbert Diess is under pressure to lower costs.
  • Why it matters

    Why it matters

    If Herbert Diess succeeds in making the core VW brand more profitable, it will boost overall earnings and the group’s share price.

  • Facts

    Facts

    • Mr. Diess, a former BMW executive, started as the new head of the VW passenger cars brand on July 1.
    • Mr. Diess had a fierce reputation for cost cutting at BMW, where he saved €4 billion in parts purchasing over four years.
    • Toyota, the world’s largest carmaker, employs 340,000 people compared with 600,000 at Volkswagen but makes €5 billion more in profits.
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    Audio

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It wasn’t long after Herbert Diess was named new Volkswagen brand chairman in December, that he toured the company’s main plant in Wolfsburg.

The former BMW manager walked down production lines and examined the latest equipment where VW workers produce Golfs, Tiguans and Tourans. The plant is equipped with many expensive robots to facilitate the work of employees.

Later, Mr. Diess was reported to have asked why, with so many robots doing the work, were there not fewer people required. Or, put another way: Why hasn’t the best technology resulted in lower production costs?

Mr. Diess officially started work on Wednesday at Volkswagen and one of his biggest tasks is to curb escalating costs for the core brand of Germany’s largest corporate group and the world’s second-largest carmaker after Toyota.

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