Volkswagen AG chief plans new strategy with focus on profitability

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Volkswagen AG’s new plan of attack in the wake of the huge diesel emissions crisis includes a shift of focus towards profit growth rather than sales volume, according to the newly appointed chief executive officer. The announcement effectively axes the long running drive to achieve the No.1 global sales position from Japan’s Toyota – a milestone briefly achieved following the results of the first six months of the year and a core credo for the Ferdinand Piech chairman and Martin Winterkorn chief executive officer. But following two subsequent crises this year both are now out of the picture and more importantly VW is now battling the biggest business crisis in its 78-year history – following its admission of cheating on diesel emissions testing in the US. “A lot has become secondary to going ‘higher, faster, further’, especially return on sales,” commented Matthias Mueller said in a statement, designed to showcase VW’s next moves. “It’s is not about selling 100,000 cars more or less than a big competitor. It is rather about qualitative growth,” the company added, also saying the strategy through the middle of the next decade will be outlined halfway through next year. The strategy revamp also comes after the company said its third quarter financial results were negative, the first loss in more than 15 years. The automaker has provisioned 6.7 billion euros ($7.4 billion) to cover initial costs of the scandal, while aiming to investigate the full extent of the diesel emissions cheat. Europe’s largest automaker is under pressure to repair up to 11 million autos and has already announced a wide range recall of 8.5 million cars in the European Union. Via Reuters