VW New CEO Targets US for Profits

Volkswagen Group new chief executive officer Herbert Diess eyes the US as a huge source of income, a goal that previous CEOs have not achieved.

Diess has just taken the top helm last week after working for just three years at the company. He has also worked previously as an executive official at BMW. The 59-year-old leader has a reputation for delivering on business targets and restructuring goals.

Currently, one of his goals is to end their company’s series of losses in the world’s second largest car market.

“In realigning the Volkswagen brand, he has demonstrated to impressive effect the speed and rigor with which he can implement radical transformation processes,” said VW Supervisory Board Chairman Hans Dieter Poetsch last week.

The Board has recently given the green light for huge corporate changes, which include Diess’ appointment as the groups’ CEO, replacing ex-CEO Matthias Mueller.

According to insider information, Diess’ commitment to North America as brand chief is “unwavering.”

“He directly assumed responsibility for the region, making it matter for the boss personally,” according to a source in Wolfsburg. “It would surprise me if that were to change.”

According to officials, Diess insisted on traveling to the US, particularly in Detroit, in January to introduce the redesigned Jetta himself in a move to showcase Wolfsburg’s commitment to the US.

Diess targets a 5 percent market share for the US. That figure was 2 percent higher than last year.

“We believe it’s possible, not in the short term—we think it’s going to be 10-year plan,” said Diess last month. “America is very important for us.”

He also added that they have a good foundation. “We will come forward with two new products every year specifically tailor-made to hit the core segments of America.”

This was an optimistic on the group’s outlook given the fact that the US market has been elusive to the business. Globally, VW Groups chases after the title of the world’s largest automaker. In the US, it’s only on the eighth spot.

Last year, the group only sold 625,068 vehicles in the US, all brands combined. It was less than half the volume gotten by Hyundai-Kia, its closest rival.

Volkswagen hasn’t posted profits in North America in the last one and a half decade under three group CEOs. Martin Winterkorn took over as the CEO in 2007, and he chose to stop publishing regional earnings. A year before that, the group managed to cut its losses in the region.

HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can create an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.