The Volkswagen Group to make mass-market brands more distinct

Vehicles from Volkswagen, Skoda and Seat are expected to have more distinctive characteristics in the future.

The Volkswagen Group has revealed its plans to make its three mass-market brands - Volkswagen, Skoda and Seat, more distinctive in future to avoid overlaps within the corporate.

This news comes only days after internal conflicts rose between Volkswagen and Skoda, where the union and managers at VW demanded a part of stablemate Skoda’s production to be moved to Germany. Skoda has a massive cost advantage as its cars for Europe are mainly produced in Czech Republic, where labour costs are cheaper.

This has sparked a backlash at Skoda. Concerned about the possibility of losing work to Germany, the Czech brand's main union threatened to cut back on overtime work. Czech Prime Minister Bohuslav Sobotka also demanded talks on the issue with Skoda's leadership.

VW Group’s CEO, Matthias Mueller, told Reuters that the automaker's executive board had set out a new focus for its three mass-market brands based on 14 customer groups in its core European market.

“The key challenge is to achieve a perfect market coverage with clear territories for the brands. We must now be able to better use the synergies that our unique alliance of brands offer than we have done to date," Mueller told in a group meeting.

While we in India are familiar with VW and Skoda, the company also has an aforementioned third mass-market brand - called Seat (pronounced: say-at), which is based in Spain and primarily operates in Europe only.

The Volkswagen Group’s brand overlapping can be seen in India as well, where cars like VW Vento & Skoda Rapid, and more recently - VW Passat & Skoda Superb, share a lot of technology, with the Skoda counterpart being more affordable in each case.

Source: Reuters