The merger created Volkswagen Group Australia as a single national sales company and one legal entity.

In a letter to suppliers, Audi Australia said it would operate as a brand of VGA and “will no longer exist as a trading and reporting entity” from December 31 this year. Suppliers will have to migrate to VGA’s accounting system.

The merger, which brings Australia in line with most markets in which the two Volkswagen Group businesses operate, will retain independence of franchises with an Audi representative saying there would be no implication of, for example, a Volkswagen dealer suddenly also able to sell and service new Audi cars.

Most of the detail is in the back end, affecting marketing and administration to create “greater operational and cost efficiencies and eliminate duplication of functions as we utilise on group-shared service.”

These would also include the operation of warranties, financial services, and advertising.

VGA will become the parent company for the brands Volkswagen, Audi, Skoda and, from later next year, Cupra. It will not be involved with other Volkswagen Group brands such as Porsche, Bentley and Lamborghini, which will remain separate entities. 

The merger has taken several years to materialise after being proposed about 10 years ago in a move that would put all the Australian-presence brands under one roof. That didn’t happen.

Instead, Volkswagen and Audi have slowly been sharing corporate functions. They now operate the same warehouses for parts, for example.

VGA last year built a new training centre and Victorian state office in Essendon Fields, Melbourne. The centre, built alongside Porsche’s new training centre, is the state office for Volkswagen, Skoda, and Audi.

From next year, once renovations are complete, VGA will move from its Chullora address in Sydney to Audi’s administration centre and showroom in Zetland.

VGA general manager of corporate communications, Paul Pottinger, said work on the merger between VGA and Audi Australia was “progressing well, despite the challenging environment we are all operating in due to the pandemic.”

“Since the announcement, approvals have been granted by the respective supervisory boards in Germany, as well as the Foreign Investment Review Board.

“The building renovations on our new joint premises in Zetland are proceeding well, and are on-schedule to be complete in-time for the two companies to become one at the beginning of 2022. Further announcements will be made closer to this date.”

By Neil Dowling