Have no fear, the heavy hitters are safe...for now.
As everyone with a pair of eyes and ears knows, one of the more memorable pieces of news in the past year is the story of Volkswagen’s self-inflicted meltdown after it was caught cheating emissions tests. However, much like the big banks that required bailouts from the US government after the recession, Volkswagen is too big to fail. Even so, that doesn’t mean that the giant can’t be cut down a bit. At the time that Volkswagen was caught, it was the largest automaker in the world and its trajectory seemed to indicate that it would only keep growing.
Now that the dust is settling, Volkswagen stands to lose huge amounts of money on fines, lawsuits, customer reimbursements, and lost sales from the lack of trust that consumers have towards the brand. The result is that now the Volkswagen Group will need to change its pace from an aggressive brand-acquiring machine to one that carefully measures its moves. As a result, VW CEO Matthias Mueller will take a look at the company’s portfolio, which includes gearhead-approved brands like Porsche, Lamborghini, and Audi, to decide which companies that it needs to get rid of. Bloomberg reports that VW will start cutting costs by first merging some of its components manufacturing businesses into one consolidated entity.
Next, it will look at which non-core brands it can stand to sell off. On the list of possible household names heading to the chopping block is Italian motorcycle manufacturer Ducati and MAN, a subsidiary that makes industrial diesel and turbocharging applications. For now, it looks like some of our favorite brands under Volkswagen’s wing, such as Bentley and Bugatti, will be left untouched. Successful volume manufacturers like Audi and Porsche are almost certain to stay put, although funds for extravagant projects may dry up at some point depending on how bad things get. Hopefully VW will learn its lesson so that, unlike GM, it won’t have to send some of our favorite automobile brands to the grave.