Volkswagen to Make VW, Skoda, Seat More Distinct

Volkswagen is planning to make its three mainstream brands more different, with a view to making the company more efficient.

CEO Matthias Mueller told Reuters that the automaker’s board was planning a new focus for Volkswagen, Skoda, and Seat based on 14 segments in the brands’ core European markets.

“The key challenge is (to achieve) a perfect market coverage with clear territories for the brands,” he said, adding “we must now be able to better use the synergies that our unique alliance of brands offer than we have done to date.”

Currently, there is a lot of overlap between the cars from VW, Seat, and Skoda. Initially, the best and newest features and engines (and power levels) were reserved for VW cars. More recently, thanks to extensive platform and parts sharing, the brands have become more and more similar. The biggest differences were in exterior styling and price. That was seen as taking sales from the more expensive models in favor of the cheaper badge-engineered cars.

Recently, VW management had planned to move some Skoda production to Germany, and make the Czech brand pay more for shared tech. Skoda’s main union threatened labor actions and even the Prime Minister stepped in to stop the move.

Models that have more differentiation and a unique presence won’t step on sister-brands. VW wants you to think of the Skoda Octavia RS as a Skoda, not a cheap GTI wagon. Making sure their vehicles are in different segments means less cost designing two or more of the same vehicle for the same market.

If the plan is a success, VW will try the same between its premium brands. Making Audi and Porsche vehicles more distinct, while still using extensive platform sharing.