Volkswagen Reorganizes Management, Brands

Volkswagen, Europe’s biggest auto maker, announced management shifts and a reorganization of its sprawling range of brands in an effort to sharpen the image of its cars and boost production efficiency.

VW said its supervisory board approved a strategy splitting the brands into two groups: a sporty one comprising Audi, Lamborghini and Seat; and one bundling the more traditional Volkswagen, Skoda, Bentley and Bugatti.

The shake-up is the first major initiative of VW Chief Executive-elect Bernd Pischetsrieder, who has signaled that he wants to build Audi into a strong sporty brand. Analysts expect Pischetsrieder to give the brands a clearer identity so that they no longer compete against one another as well as rivals.

Grouping the brands also may make it easier for them to use some of the same parts, allowing VW to cut costs by producing and buying on a larger scale just as rivals such as General Motor’s Opel and Ford overhaul their European operations to fight back.