Volkswagen is working on a “regionalisation” plan to decentralise decision-making from its Wolfsburg headquarters and empower subsidiaries to tailor VW-brand products to local tastes.
The German carmaker’s management is introducing sweeping changes in the wake of last year’s emissions scandal, in which the carmaker admitted to equipping 11m cars worldwide with test-cheating software. VW then experienced the biggest annual loss in its history owing to costs of the crisis.
Under pressure from investors to regroup, the carmaker has looked inward as it seeks to tackle the cultural problems that contributed to the crisis and regain market share outside Europe and China.
Jürgen Stackmann, who became marketing and sales chief of VW’s core passenger car brand last November, is one of the executives leading the strategy.
Formerly chief executive of VW’s SEAT marque, he said that VW’s best-selling model, the Golf, is a niche product in South America because it is relatively expensive.
VW sells far more of the locally produced Gol. But in the past five years the VW brand lost its appeal for many consumers because it was slow to come out with flashier-looking models based on styles emerging in Brazil.
He said VW was still innovating, but in an area that wasn’t catching local attention.
“Europeans would perceive innovation more on a technology base,” he said, referring to connectivity, dashboard apps and high-tech engines. But in South America, “how fresh it looks” matters more, he said. “In many emerging markets, the car is still a much more important part of yourself — a status symbol.”
No matter where it operates, VW has the same target market: the aspiring middle class, which Mr Stackmann described as “the sweet spot” between the mass and premium segments.
But in the past, Mr Stackmann said, VW had wrongly assumed that this class of buyer always wanted the same style of car. VW’s rivals, meanwhile, wooed customers with local niche products.
“You can’t just copy what you’ve done, you have to stay connected to what the society will aspire to and actually give it at the appropriate time,” he told the FT. “The key lesson from this is that the one-size-fits-all in the export model is no longer working globally.”
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