Toyota and Volkswagen looking to battle slowdown by changing management

Wednesday 18 December 2013, 12:16 PM by

Auto makers operating in the Indian car market have been battling hard to counter the slowdown that exists in the country's economy. Things have not been looking well for companies as worsening economic conditions have led to a significant drop in sales and consequently, lower profit levels. Firms have tried their hands at all options possible in order to counter these problems, such as offering discounts, launching new cars and introducing limited edition variants of successful models. Now, according to recent reports, some firms have decided to make structural changes in their management to fight adversities. As per a report in Economic Times, Indian arms of German car maker Volkswagen and Japanese giant Toyota have undergone major reshuffling. Sources claim that these entities are looking at new leaderships to guide them out of troubles. It is being said that fresh thought processes are likely to have an impact on operations.

Toyota and Volkswagen looking to battle slowdown by changing management |
Toyota and Volkswagen looking to battle slowdown by changing management

Talking about the German bigwig Volkswagen first, Economic Times has reported that alterations have been made by the firm right at the top level. Gerasimos Dorizas, who is the Chief Representative of Volkswagen Group India, has resigned from his position. Dorizas, also President and Managing Director of Volkswagen Group Sales India, did not cite a specific reason for this decision, terming it as solely 'personal'. His shoes are likely to be filled by Mahesh Kodumudi, Managing Director and President at Volkswagen, who currently is responsible for activities of factory shopfloor. Quite strictly, these changes have been made and applied with immediate effect. Gerasimos Dorizas, after completing paper work and formalities is said to be making a return to Europe.

On the other hand, Toyota's Indian subsidiary, Toyota Kirloskar, is set to work under new a leadership team from January in 2014. Sources claim that a major reshuffle is going to take place at the management level in this firm. Hiroshi Nakagawa, who has been Managing Director at Toyota Kirloskar for over half a decade, is set to make way for a new leader. Yoshimasa Ishii, Senior Managing Director at Toyota Motor Corporation, is being touted as Nakagawa's replacement. Also, Sandeep Singh, presently handling Deputy Managing Director and Chief Operating Officer profiles, is slated to get a bigger role at the firm's Asia Pacific office and might be stationed in Bangkok from 2014.

The Japanese car maker, as per reports, is adopting a holistic approach to things as it hopes to see changes on all levels. It is being said that the addition of young people is likely to breathe fresh life into the company's operations and provide a better perspective. On the other hand, some sources claim that managerial resources are going to be utilised globally for providing exposure to senior employees.

Toyota and Volkswagen looking to battle slowdown by changing management

Elsewhere, German entity Volkswagen has been going through changes over the past year and a half. In fact, Dorizas, now returning to Europe, played a crucial role in altering operations at this firm. Taking over from Maik Stephen as Managing Director of Volkswagen Group Sales, he helped the German entity to post growth and earn increased profits. The situation for Volkswagen Group is tricky at the moment as the premium brands owned by it have performed really well in the country. While Audi, Porsche and Lamborghini have registered good sales, mass market marquees Skoda and Volkswagen have recorded fall in number of units sold.

Industry experts feel that these decisions could prove to be really critical for both these companies and their future prospects. There have been a few instances in the past wherein changes made in the management have completely transformed a firm's fortunes. Analysts believe that a new person looks at things differently and more objectively than the existing one. Although these changes have been made to counter the slowdown, there is not much to worry for Toyota and Volkswagen as they are performing better than a number of rival groups in terms of profitability.

Some experts are of the opinion that luxury brands of Volkswagen will continue to perform well and deliver profits. These names are strongly placed in the market and have created dedicated customer bases. However, the German group needs to look into the operations of mass brands Volkswagen and Skoda, which are facing issues like slow demand, high input cost and falling sales.