The merger, subject to final approval by the parent companies in Germany and by the Australian Foreign Investment Review Board, unites Volkswagen, Audi, Volkswagen Commercial Vehicles and Skoda in a single Australian entity.
Audi Australia, established in 1997, and Volkswagen Group Australia (2001) have previously traded as separate businesses though they share functions including IT and procurement.
It is not the first time Volkswagen and Audi have closed their corporate gap. The two last year sited their training facilities alongside Porsche, building a multi-million-dollar complex in Melbourne’s Essendon Fields automotive hub that will train Volkswagen, Audi and Skoda staff, managers, technicians and apprentices.
It also serves as the Victorian state regional office for Volkswagen and Audi and is the state base for Volkswagen Financial Services Australia.
VGA managing director Michael Bartsch said that the merger “fortifies the position of these group brands”.
“In a market where all auto brands are importers, no national sales company will have the breadth of offering nor the sheer product strength of VGA,” he said.
Audi Australia managing director Paul Sansom said the merger would have clear benefits for both businesses.
“Audi Australia has enjoyed enormous success over the last 15 years and the consolidation of its place in the Volkswagen Group here begins the next exciting chapter,” Mr Sansom said in a statement.
“As a prestige brand, Audi has its own distinct identity in VGA and remains the group’s technological spearhead … and taking a leading role in future mobility.”
Mr Bartsch said that Audi will be the brand that leads VGA’s push into electric vehicles.
“As such, VGA will be positioned most advantageously to dominate what will in time become a common form of personal mobility,” Mr Bartsch said.
“Eventually each group brand will have separate EV ranges that reflect the diversity and price positioning of their conventional showrooms. Yet, crucially, the brands retain their entirely distinct identities and customer sets.”
There are no changes to the dealer network or to the executive leadership of the brands.
Mr Bartsch remains managing director of VGA and will head the expanded business, while Mr Sansom will continue as Audi Australia’s managing director.
Volkswagen Commercial Vehicles is headed by director Ryan Davies and Skoda by Michael Irmer.
The merged business will move to Audi’s South Dowling Street premises in Zetland, Sydney.
The merger is in line with changes to the global structure of the Volkswagen Group.
Changes include Audi in Europe announcing it had employed a German company to handle all its global public relations and internal communication and that Audi had become 100 per cent owned by Volkswagen and would become the group’s technical lead.
Volkswagen AG chairman of the board of management and chairman of the supervisory board of Audi, Dr Herbert Diess, late last year said “we are pooling our strengths in the Volkswagen Group and positioning ourselves competitively for the future”.
“Going forward, the Audi brand will take over the lead for research and development in the Volkswagen Group and thus swiftly assume technical leadership.”
Audi moved to be a wholly-owned subsidiary of Volkswagen AG in August when the remaining 0.36 per cent of its shares not owned by Volkswagen were bought from private shareholders for €1551.53 ($A2441.84) each, representing a buy-out of €230 million ($A362m) for Volkswagen.
Subsequently, Audi chairman of the board of management Markus Duesmann said “Volkswagen Group is now consolidating all its strength”.
“We (Audi) are positioning ourselves competitively throughout the Volkswagen Group and lifting group synergies and economies of scale to a new level.”
Audi has also appointed German agency Palmer Hargreaves, in association with Handelsblatt Media Group, as content service provider for global PR work and internal communication at Audi.
By Neil Dowling
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