Post-Dieselgate, Volkswagen retools itself for faster ride

Sun Feb 28, 2016 7:08am EST
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By Andreas Cremer

BERLIN (Reuters) - The biggest engineering feat on display when Volkswagen unveils its new concept car on Tuesday will be the team developing it: a post-Dieselgate management system crafted to operate faster, cheaper and with a lighter grip on the wheel.

Last year's scandal over falsified diesel emissions tests caused a cull of top managers at Europe's biggest automaker and brought a promise to overhaul the corporate culture.

But the most meaningful management change taking place was already under way when the scandal broke: aimed less at preventing misdeeds than at improving profit margins, which had fallen behind competitors under an inefficient hierarchy.

Its concept for the Geneva car show will be the first vehicle the Volkswagen brand develops under a new, decentralized system designed to emulate rival BMW, which has a track record of quickly and efficiently getting new cars to market.

VW (VOWG_p.DE: Quote) will present the concept version of an entry-level sport-utility vehicle (SUV) in Geneva on Tuesday, three sources at the company said, and will develop the road version more rapidly under the new streamlined process.

Analysts following the company say it could lift margins at the core brand as the parent grapples with the costs of its scandal.

The move is pioneered by brand chief Herbert Diess who previously oversaw R&D while an executive at BMW, where an agile structure has long allowed expert teams to run vehicle development without interference from top management.

Volkswagen has previously been known for a system that spread responsibility for model development across layers of committees and funneled final approval through top executives.   Continued...

Herbert Diess, chairman of Volkswagen Passenger Cars' board, speaks during a keynote address at the 2016 CES trade show in Las Vegas, Nevada, January 5, 2016.  REUTERS/Steve Marcus - RTX217DN