Volkswagen names Ralf Brandstaetter as the new CEO of its core VW car brand
- Volkswagen names Ralf Brandstaetter as the new CEO of its core VW car brand.
- Herbert Diess to continue his role as the CEO of the Volkswagen Group.
- Volkswagen to consider broader cost cuts to combat COVID-19 impact.
In a statement on Monday, Volkswagen Group (ETR: VOW) said that its current Chief Executive Officer (CEO) of the VW car brand, Herbert Diess, will step down on 1st July. The company also named Ralf Brandstaetter as the new CEO to replace Diess. Brandstaetter has previously been serving as the chief operating officer of the VW car brand. Among other candidates expected to replace Diess was Porsche’s CEO Oliver Blume. Volkswagen recently closed its £2.07 billion investment in a self-driving startup, Argo AI.
VW is currently more than 15% down year to date in the stock market. The £69.29 billion company has a price to earnings ratio of 6.87.
Diess to continue his role as the CEO of the Volkswagen Group
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The announcement also highlighted on Monday that Diess will continue his role as the CEO of the Volkswagen Group that includes multiple brands like Skoda, Audi, Porsche, Seat, and Bentley brands. The decisions were made in the extraordinary supervisory board meeting held on Monday.
Following VW’s emissions scandal, Diess took an aggressive stance to expand VW’s footprint in the EV market. Volkswagen recently finalised its largest M&A investments in two Chinese firms. Diess also appointed Markus Duesmann as the CEO of Audi. Duesmann had previously served BMW in managerial capacity.
As the CEO of the VW car brand, Diess faced criticism in recent months as the German auto manufacturer struggled to launch the next generation of its modern hatchback VW Golf. The compact car marks a flagship model for Volkswagen since 1974 when it was first released in the European market. All eight generations of the VW Golf have been a worldwide success for the car manufacturer in the past five decades.
Diess proposes wider cost cuts in Germany
In the wake of the falling demand amidst the Coronavirus pandemic, Diess has been trying to convince the company’s labour leaders to approve a broader cost-cutting strategy. The CEO proposed to massively slash costs in Germany to fund Volkswagen’s £30.23 billion investment in self-driving and electric vehicles, and another £44.45 billion investment in EV battery procurement.
VW’s supervisory board has 19 seats in total, out of which, the labour leaders currently control nine. Lower Saxony holds a 20% stake in the world’s largest carmaker. If directors from this German state vote in favour of the labour leaders, the VW management will lose its authority to impose several of its decision.