Cars and Drivers

What Can a New Chairman Do to Boost Profits at Volkswagen?

The boardroom squabbles at Volkswagen may finally settle down, with Chief Financial Officer Hans Dieter Poetsch now pegged to take up the mantel as chairman of the world’s largest carmaker. Poetsch was picked in part because he was seen as not beholden to ousted former chairman Ferdinand Piech or to Chief Executive Officer Martin Winterkorn, who had clashed over strategy.

With that particular set of troubles behind it, is Volkswagen now ready to do what is necessary to gain sales in the United States, the world’s second largest car market? In August the manufacturer sold 32,332 cars in America, down 8.1% from the same month in 2014.

Sales of the iconic Beetle continued to falter, down 26.8% to 2,127. Sales of the Jetta Sedan, VW’s best-selling model, fell 17.9% to 11,002. VW’s second best-selling model, the Passat, fell 19.4% to 7,409.

In the United States, the difficulty may be that VW only has five models that have any meaningful sales, which puts it up against U.S. and Japanese companies, some of which have much, much larger fleets. The VW share was barely 2% of the cars and light trucks sold through the first seven months of the year.

Management said when it reported August sales that VW would do better next year, but did not say how:

“We are encouraged by the continued strength of the Golf family and confident that success will continue with the model year 2016 vehicles that are equipped with the MIB II infotainment systems and available class leading connectivity features,” said Mark McNabb, chief operating officer, Volkswagen of America.

A lot will depend on how well the former finance chief can work with the CEO to build the company’s footprint in the United States and boost profits.

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