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For New Volkswagen Chief, Regaining Trust Must Come Before Profits

As the new head of Volkswagen, Matthias Mueller will be overseeing the largest automaker in the world, a sprawling empire of brands and manufacturing facilities stretching from China to North America. But that empire is also facing the biggest crisis in its 78-year history, one that some observers have said could destroy it.

The veteran Volkswagen executive, who until Friday morning was in charge of its Porsche brand, will now run the entire company, replacing Martin Winterkorn as CEO in wake of the diesel emissions scandal.

Even as the automaker's supervisory board met to approve the 62-year-old Mueller's promotion, authorities said the company had rigged tests on 2.8 million diesel vehicles sold in Germany, roughly six times as many as have been impacted in the U.S.

The new CEO "has to put the emphasis on VW customers, whatever the cost," said Mike Jackson, CEO of the largest U.S. auto retail chain, Florida-based AutoNation.

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That would be just the first step in rebuilding trust in the brand. Phillippi said the test rigging only worsens one of Volkswagen's longer-term challenges, noting that the automaker has been struggling for decades to catch up to the Asian marques that long ago pushed past VW as the dominant imports in the U.S.

Even as the overall market was recovering from the Great Recession, Volkswagen brand sales have steadily fallen over the last four years.

The situation is compounded by the fact that the overall automotive market in China, where VW is the dominant manufacturer, has been slowing rapidly in recent months.