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Clear identities aim for VW restructure

VW Group has confirmed plans to restructure its seven car brands into two divisions centred on the Volkswagen and Audi marques.

Volkswagen will oversee the 'classic' group, consisting of Bentley, Bugatti and Skoda, while Audi will front the 'sporty' operation, with Lamborghini and Seat.

The move, first signalled over the summer, was instigated by outgoing VW chairman Ferdinand Piech. It will be gradually implemented over the first half of 2002 by his replacement Bernd Pischetsrieder, who takes control in April.

A UK VW spokesman said the changes would have "no visible affect" on the UK retail structure.

The two divisions are designed to curtail internal competition and head off criticism over VW's platform sharing strategy, which has diluted brand identities. Skoda and Seat, acquired to give VW a presence in eastern and southern European, have outgrown their home markets are now cannibalising Volkswagen sales.

VW, for years treading water, must find ways to streamline and cut costs to remain competitive with rivals like Ford (with Premier Automotive Group), General Motors and Renault-Nissan, who have been pursuing their own restructuring policies.

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