Key facts about Volkswagen

GMT 17:39 2015 Monday ,21 September

Arab Today, arab today Key facts about Volkswagen

Volkswagen was aiming to double sales
Frankfurt - AFP

German auto giant Volkswagen, the world's biggest carmaker in terms of sales, is embroiled in a major scandal after admitting that nearly half a million of its diesel cars in the United States were equipped with software that thwarts pollution tests.

Here are some key facts about one of the towering flagships of German industry.

- 'People's Car' to global player -

Volkswagen was set up in 1930s to build an affordable family car and the company name translates into "People's Car". The model that laid the foundation stone for the group's fortunes was the Beetle. The cult car, with its unmistakable, inimitable profile, began as a little twinkle in Adolf Hitler's eye who took it into his head in 1934 to make a reasonably priced car that all Germans could afford to own.

He commissioned Ferdinand Porsche with the design and construction of such a car, christened the "Kraft-durch-Freude-Wagen" (KdF) or "strength from joy car". Hitler not only had a factory erected especially to build it, but also an entire town as well, VW's hometown of Wolfsburg.

The "KdF" car was officially unveiled shortly before the war and Germans immediately fell in love with it.

Today, VW is a sprawling group with 12 very diverse brands, ranging from SEAT in Spain and Skoda in the Czech Republic to Lamborghini in Italy and Bentley in Britain. It also makes trucks under the MAN and Scania brands and boasts annual global sales of around 200 billion euros.

- Leadership battle -

In recent years, the company's fortunes have been steered by Ferdinand Piech, a member of the powerful Porsche dynasty that is a shareholder in the company. Piech is the grandson of the Beetle's inventor and was himself VW's chief executive between 1993 and 2002, before becoming its supervisory board chief.

In an ugly leadership battle earlier this year, Piech, 78, tried to oust one of his former proteges, Martin Winterkorn, 68, as chief executive because of the latter's difficulties in making substantial inroads into the US market, as well as VW's over-dependence on the Chinese market.

But other supervisory board members rallied behind Winterkorn, finally forcing Piech himself to resign in April.

Earlier this month, before the scandal broke, the six-member steering committee "voted unanimously" to propose to the 20-strong supervisory board at its meeting on Friday that Winterkorn's contract be extended until December 31, 2018.

But industry experts now suggest that the supervisory board may postpone its decision, at least until the affair is cleared up. And some analysts believe Winterkorn may end up losing his job altogether.

- Volkswagen struggles in US -

The German carmaker has long found it difficult to establish a strong foothold on the US market where it competes with giants such as Ford, General Motors and Toyota. North American sales account for just 9.4 percent of the group's global business, compared with 34.5 percent in China and 41.2 percent in Europe.

VW hoped that its diesel-powered cars would help it grow in the United States and it is aiming to double sales of its VW and Audi brands there to one million by 2018, not least on the back of a new, bigger sports utility vehicle to be launched in 2016.

Experts suggest the latest scandal could deal a lasting blow to VW's image in the US.

- Shareholder structure -

Volkswagen, which employs more than 590,000 people worldwide, is currently 50.7-percent owned by the holding company Porsche SE, which is in turn controlled by the Porsche and Piech families. The regional state of Lower Saxony where the carmaker is based holds a stake of around 20 percent, giving it a right of veto in strategic decisions.


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