Volkswagen is restructuring its brands and regions

Volkswagen, the third largest automaker in the world by vehicle production, has an incredibly diverse group of brands and regional managers, which the company believes is contributing to its underperformance in certain key markets. Reuters is reporting that, in order to address this issue, the company is handing more power over to brand managers and regional bosses.

“I think a company of this size cannot steer everything from Wolfsburg,” said Bernd Osterloh, the head of the German automaker’s works council, as quoted by Automotive News. “Our approach is: centralize as much as necessary and decentralize as much as possible.”

Card Advice notes that Volkswagen intends to become the world’s number one automaker in terms of sales and profits by 2018 and remain essentially “future proof” for years to come. It’ll be difficult to achieve that goal, however, unless the company is able to reverse its declining sales in two key markets, the United States and Brazil.

While Volkswagen’s sales in South America (excluding Brazil) and Russia are down by 22% and 10% respectively, this is being offset by strong growth in Western Europe and Asia. Sales in China have jumped 17% to 2.1 million, but unless the automaker can reverse the declining sales in the United States and Brazil, these gains won’t be enough to meet its 2018 goal.