VW brand slumps on emissions crisis

Bloomberg

Volkswagen AG’s namesake car brand slumped to a loss in the fourth quarter as the emissions-cheating scandal tarnished its reputation and added costs to appease customers and dealers.
The VW brand posted a loss of €127 million euros in the final three months of 2015, compared with a profit of €780 million a year earlier, according to data released by the German carmaker. Volkswagen’s biggest unit was hit by “market support measures linked to the emissions issue” as well as drops in the Russian and Brazilian demand, the company said in a statement on Thursday.
“Volkswagen is far more than crisis,” CEO Matthias Mueller said. “But we can nonetheless hardly avoid saying that the current situation demands everything of us, in every respect — including
financially.”
Reviving the VW marque is critical to the carmaker’s recovery from the worst scandal in its history. The company’s largest division by sales volume and revenue, which was struggling with weak profitability even before the crisis, has become a battleground as the automaker’s powerful worker representatives balk at restructuring measures pushed by Herbert Diess, the head of the brand.

12-point programme
Diess, who joined Volkswagen from BMW AG last July, has embarked on a 12-point program to revive weak margins at the VW brand and accelerate cost savings initiated under Martin Winterkorn, who resigned as CEO after the scandal erupted in September.