Volkswagen expected to shed brands, cut costs; CEO to address press

VW Jetta TDI
VW Jetta TDI

Beleaguered German manufacturer Volkswagen AG is expected to drastically change its business plan in the wake of the diesel emissions scandal that may cost the company in the billions of dollars.

VW CEO Matthias Mueller addressed the company’s board on Tuesday to outline his plans, according to a Bloomberg report. Some of those plans include potentially selling off non-core brands, shifting research and development toward electric cars and SUVs, and consolidating other businesses.

Some of the brands that VW may sell off are Italian motorcycle manufacturer Ducati, marine engine manufacturer MAN Diesel & Turbo and propulsion specialist MAN Renk. The report also indicated that VW’s commercial truck business, which includes Scania and MAN, may also be fair game.

The company will also introduce more SUVs and electric cars and also invest more in ride sharing.

VW has 12 brands, and part of the strategy would be to take the parts and components manufacturing from each brand and put it under one entity and management structure, similar to what Ford did with Visteon.

Mueller will be presenting his full plan to the press Thursday.

The diesel scandal, which involves both the 1.8-liter four-cylinder engines and 3.0-liter V-6 engines, was the result of cheat software that was put into the cars that would recognize when they were being tested for emissions and would change the characteristics of the engine to make sure it passed the test. During normal driving, the engines would have much higher emissions that is legal.

Initial estimates were that the scandal could cost the company upwards of $7 billion. It prompted then-CEO Prof. Dr. Martin Winterkorn to resign and the company to go through an restructuring that saw the creation of the North American region for more oversight.

TFLcar tested a cheat-enabled Volkswagen Jetta on a dyno to see how much power it would lose in cheat mode. Check out the full video below.