There are big changes happening at the Volkswagen Group.

In a press statement, Volkswagen Group -which includes Volkswagen, Audi, Skoda, SEAT, Lamborghini, Bentley, Porsche, and Ducati- have announced that they are decentralizing control of the group's organizational structure depending on the region. 

“We are distributing the responsibility across several shoulders,” said Dr. Herbert Diess, Volkswagen Group CEO. “This means that it will be possible to take decisions in a significantly more decentralized way in the future and the Group Board of Management will be able to concentrate on overarching strategic topics. This way, we will make Volkswagen faster, slimmer and more efficient.”

What's interesting about the move by Volkswagen Group is the manner in which they have decentralized their operations: they have distributed the regional responsibilities of the entire group to specific VW Group brands.

Volkswagen Group decentralizing their global operations

1. Volkswagen will assume responsibility for North America, South America, Sub-Saharan Africa, and China

2. Audi will assume responsibility for Middle East and Asia Pacific (except China)

3. SEAT will assume responsibility for North Africa

4. Skoda will assume responsibility for Russia and India

Volkswagen Group says that the objective was to be able to “tailor the model range” to the different markets around the world. The Volkswagen Group is widely known within the industry to be very centralized in their decision making processes for markets around the world, with local distributors having to get approvals from Germany over a wide variety of operational matters. Having a structure where most operational decisions can be handled at the regional level is a common practice in the industry.

In the Philippines, Volkswagen has already begun with a major model realignment, following the launch of VW models that are sourced from China. The new models are aimed at making the brand more competitive, price-wise, against their contemporaries, something that was not possible with European and Mexican made models.