Manufacturing News

VW, Audi reportedly ready to shake up China management

Volkswagen AG's China boss may leave the company and two top Audi executives will be demoted under an extensive reorganization of managers to keep the carmaker focused on growth targets, German press reports said.

Karl-Thomas Neumann, head of VW's China operations since 2010, is likely to quit after being passed over for promotion, Spiegel magazine said. Neumann, a former CEO of supplier Continental AG, had been named by analysts as a possible candidate to replace VW CEO Martin Winterkorn when he retires.

Audi's technical chief Michael Dick and the premium brand's sales and marketing head Peter Schwarzenbauer will leave Audi's board under the shakeup, Handelsblatt business newspaper also reported.

VW's 20-member supervisory board is meeting Friday and Saturday to ratify the changes. "A massive overhaul is pending to ready the company for 2018," a source told Reuters.

VW will create a management board member for China to oversee the automaker's future expansion in its biggest market, Spiegel said. Neumann had not been offered the post and had turned down another job within the group, the magazine said.

VW's top management is said to be displeased with Neumann's performance in China. Quality issues with the carmaker's seven-speed dual-clutch transmissions have led to consumer complaints, Spiegel reported.

At Audi, VW's top management wants to see the brand compete more aggressively against BMW, Handelsblatt said.

VW has pledged to become the world's biggest and most profitable car manufacturer by 2018, aiming to overtake General Motors and Toyota Motor Corp. by boosting vehicle sales across its multi-brand group to 10 million units annually.

In the first four months of 2012, VW Group's global sales rose 8.6 percent to 2.9 million vehicles.

VW is currently building factories in Foshan, Yizheng and Ningbo to strengthen its market share in southeast China. The company aims to spend 14 billion euros on new factories and products in China through 2016. In April, the said it would build a new factory in western China.

VW declined to comment.

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