Less China, more USA: Volkswagen wants to reorganize the business

Less China, more America
Volkswagen wants to reorganize the business

The war in Ukraine led to a rethink at Volkswagen. The group intends to “implement an ambitious growth plan” in the US in the future. At the same time, it wants to become less dependent on China.

Volkswagen wants to reduce its dependence on China due to the change in world power after the Russian invasion of Ukraine. To this end, the Wolfsburg-based car company anticipates further growth in the US. “To that end, we will implement an ambitious growth plan, as recent geopolitical changes and the rise of block building have exposed our global vulnerability.” , particularly in the US,” CEO Herbert Diess said on LinkedIn.

Market share in the US, where VW is slowly recovering after the diesel scandal nearly seven years ago, is expected to more than double to ten percent by 2030. Volkswagen recently sold about 40 percent. of its vehicles in the world’s largest car market, China. The group generates some of the money there with its joint ventures, which is required for conversion to a mobility provider.

Investors criticize dependence on China

Investors have long criticized that the group is too reliant on business in the People’s Republic. The questions have grown louder as China has not joined Western sanctions against Russia, despite the war in Ukraine. Experts fear there will be disadvantages for Europe and the United States if China and Russia form a bloc. Volkswagen is obviously preparing for this.

In the LinkedIn post, Diess also made it clear that China played a significant role for Volkswagen. The business there will be strengthened with the new management model. Late last year, the automaker redistributed tasks across the board, giving more influence to brands and regions. After a long dispute with the works council, Diess had to relinquish power. He focuses on strategy and heads the software subsidiary Cariad, which plays a central role in turning the world’s second-largest car company into a mobility provider.

The “Volume” group, which also includes Skoda and Seat as well as the VW passenger car brand, is led by Thomas Schäfer. This means that Schäfer, who until recently headed the Czech subsidiary Skoda, is the new strongman on the group’s board of directors. Former VW brand boss Ralf Brandstätter will move to the China department on the Group Board of Management in early August, for which Diess will remain jointly responsible. The business in China had recently collapsed due to the lack of semiconductors and the corona lockdown.

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