Volkswagen has abandoned its decades-old obsession with empire building and no-expense-spared engineering to free up resources for the development and mass production of electric cars, its CEO Herbert Diess told Reuters.
A global clampdown on toxic exhaust fumes has triggered a new wave of consolidation in the auto industry as car-makers look for ways to slash development costs for low-emission and self-driving technologies.
While rivals such as FiatChrysler and Renault explore a $35 billion deal to bulk up, Volkswagen is taking the opposite approach: slimming down.
“We don’t need more brands. With very few exceptions we can tap the world’s large profit segments with our existing brands,” Chief Executive Herbert Diess told Reuters at the Frankfurt auto show.
VW is spending $88.55 billion to buy battery cells and develop electric cars and has struck a broad alliance with Ford to help share development and manufacturing costs.
Volkswagen grew into a multi-brand empire under the leadership of Ferdinand Piech, the company’s chief executive and chairman between 1993 and 2015, whose aggressive expansion resulted in the acquisition of Bentley, Bugatti and Lamborghini in a single year.
Today the German company has 660 000 employees and owns the Seat, Skoda, Bentley, Bugatti, Lamborghini, Porsche, Ducati and Audi brands in addition Scania, MAN and VW.
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