28 Sep 2015
Matthias Müller, former Chief Executive of Porsche, was appointed as the new head of VW on September 25. Müller replaces Martin Winterkorn, who resigned just two days prior after taking responsibility for the emissions scandal, despite alleging that he had no knowledge of it.
Müller has promised customers and shareholders a full investigation and assured that such misconduct would never happen again. Yet VW’s new CEO has a formidable challenge on his hands to win back consumer trust, while dealing with the financial fall out in a period when sales in key markets such as China have been faltering.
VW has set aside billions for the financial impact of the crisis
VW has set aside billions for the financial impact of the crisis, which includes 500,000 cars being recalled in the US alone and a possible fine of up to $18bn from the US’s Environmental Protection Agency. The volume of recalls and fines throughout Europe and the rest of the world could total billions more.
Industry experts believe that Müller is a good choice to take over the troubled company, given his experience and track record for VW. Müller has been with VW for more than three decades, starting his career as a toolmaker for Audi in 1977. After leaving to study computer engineering science at Munich University, Müller returned to become Audi’s Head of Product Management. In 2010, he was appointed as the CEO of VW’s subsidiary Porsche, and has led the luxury carmaker into record profits, with deliveries swelling by 17 percent from 2013. The Porsche brand remains unscathed, which helps Müller’s credibility as he tries to put a line under the scandal.
First flagged up by the International Council on Clean Transportation, it was revealed that VW had been purposefully cheating on its emissions tests. VW installed software in 11 million cars that recognises when being tested and puts the vehicle into a mode that runs below normal performance levels. When back on the road, the car switches back, causing the engine to produce around 40 percent more emissions than US regulations permit.