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VW CEO Muller likely to address four core issues in visit to China

Matthias Mueller, CEO of Volkswagen AG, plans to follow Angela Merkel to visit China in late October and in the meantime will meet senior executives of the company’s two joint ventures in China, Shanghai-Volkswagen and FAW-Volkswagen, to discuss corporate strategies, according to a report by junlincheshi on October 27.

Four core issues are expected to be addressed by the new CEO.

First, Mueller is likely to continue to persuade the Chinese government to give the green light on the transfer of the 10 percent stake from FAW to Volkswagen for FAW-Volkswagen. The current equity structure of the JV is 60 percent FAW, 30 percent Volkswagen and 10 percent Audi.

Second, he will likely discuss specific implementation process of the next strategic moves regarding the budget car, new energy vehicles and the aftermarket with senior executives of the JVs.

Third, Volkswagen Group China may see management reorganization as Volkswagen seeks to realign the company structure into four brand groups.

Finally, cost reduction on R&D, manufacturing, sales and marketing at the JVs.

Regarding the effect exerted by the ongoing emissions scandal, Germany’s Ministry of Finance said: “Due to the uncertainties caused by both the economic slow-down of China and emerging markets and Volkswagen’s emission scandal, the German industry is faced with increasing challenges and risks.” Volkswagen’s emissions scandal is likely to be the focus of the topic during Merkel’s visit to China, according to German officials.

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