Volkswagen puts branding chief in CEO driving seat to gear up for 2025

Volkswagen group has appointed brand chief Herbert Diess (pictured) as CEO and chairman, replacing Matthias Müller, who took on the role in 2015. According to the chairman of the Volkswagen Supervisory Board, Hans Dieter Pötsch, Diess demonstrated speed and vigor in "radical transformation processes".

“This accomplishment makes him predestined to fully implement our strategy 2025 in the decisive years that are now to follow,” Pötsch said. Volkswagen’s TRANSFORM 2025+ programme was created two years ago to focus on clearer brand positioning across the various regions and segments.  The reorientation of the Volkswagen brand is to take place in three phases.

  • In phase 1, up to 2020, the brand will be entirely restructuring its core business and completing a transformation along the entire value stream. At the same time, the company will develop new competences.
  • In Phase 2, up to 2025, Volkswagen intends to take the lead in e-mobility on the basis of its regained strength as a leading, profitable volume manufacturer. The strategy in this phase aims to create a broader earnings base, for example through new mobility services.
  • Volkswagen also intends to play a key role in shaping the major transformation in the industry expected after 2025. The objective is to achieve a leading role in the new world of mobility by 2030.

The brand will also develop its own digital platform to move closer to its customers and develop new earnings potential. By 2025, Volkswagen expects to have about 80 million active users throughout the world.

The company estimates that its sales revenue from services related to networked vehicles will reach about €1 billion per year by 2025 and expects a significant contribution to earnings from this business area.

(Read also: Volkswagen to rebrand, mulls cutting 23,000 jobs in homebase)

Regarding the programme, Diess said over the next few years, the brand will change radically and "very few things will stay as they are".

"Our goals are high and our strategy is very ambitious. We want to benefit from change and to take Volkswagen into the lead in the new automobile industry with determination," he said. Along with Diess appointment,  new sales, production and procurement leads have also been put in place.

Prior to the move, Diess was also chairman of the brand board of management, a role he took on in 2015 while also joining the board of management for Volkswagen AG. He worked with BMW from 1996 to 2012, where he took on various leadership roles in development, purchasing and supplier network, long term and structural planning. He also worked at Robert Bosch.

Meanwhile, out-going CEO Matthias Müller was appointed CEO of Volkswagen AG following the resignation of Martin Winterkorn, who stepped down when the brand was engulfed in a pollution scandal. This occurred when the company admitted it had used software that manipulated exhaust emissions during government testing. Prior to the move, Müller was chairman of Porsche AG in Stuttgart.

In a statement, the company said that Müller had done outstanding work for the Volkswagen Group, having assumed the chairmanship of the board of management in the fall of 2015 when the company was facing the greatest challenge in its history.

Globally right now, the brand currently works with Omnicom’s PHD as its global media agency, effective from January 2017. The billings are estimated to be in excess of US$2.5 billion. The intensive eight-month pitch process saw PHD pitching against incumbent MediaCom and IPG Mediabrands.

Closer to home, Volkswagen Group Singapore appointed Tribal Worldwide Singapore after a pitch process to spearhead brand campaigns as well as retail marketing programmes for all business divisions, including new and used car units.