Volkswagen aims to be the leading automaker while addressing the fallout from the diesel emissions scandal, which led to significant lawsuits and a drop in market share. The company is restructuring its corporate governance and fostering a culture of open communication, focusing on sustainable goals alongside financial performance. Volkswagen is investing in electric and autonomous vehicles to meet changing mobility trends and enhance customer satisfaction, with an ambitious implementation plan set through 2024.

2. AGENDA
Executive summary
Culture
Corporate
governance
Future catch-up
Implementation plan
Goal setting

3. VOLKSWAGEN PROFILE & ISSUE BACKGROUND
Situation
Complication
Question
• Volkswagen set its goal to be the world’s largest auto manufacturer (pre-tax margin of 8%)
• Volkswagen enjoyed tremendous growth in sale and reputation in its key markets – EU and US
• Volkswagen was found cheated on emission tests to launch its diesel cars from 2009-2015
• Huge lawsuits has been filed against Volkswagen in the dieselgate scandal (up to 11 million diesel cars)
• Volkswagen’s stock plunged significantly, losing its market capitalization
• Market share tumbled and sale dropped significantly
How Volkswagen can sustain its growth and prevent future scandals?
Update:
• Volkswagen has recovered its sale and become top automaker in terms of market share
• Volkswagen has conducted several changes in its corporate structure and substantially invested in developing
alternatives vehicle (EVs)

4. EXECUTIVE SUMMARY
1. Corporate culture, goal setting and
governance restructuring
✔ Fostering open culture among employee
✔ Restructuring supervisory board & audit
committee
✔ Setting sustainable goals
2. R&D for innovative vehicles development
✔ Harnessing trends for innovation
mobility solution
✔ Developing autonomous and shared
vehicle strategy
2 Key Solutions for Volkswagen

5. Culture Goal setting Corporate governance Future catch-up

6. Culture Goal setting Corporate governance Future catch-up

7. TO AVOID FUTURE CRISIS, A COMPREHENSIVE ORGANIZATIONAL COMMUNICATION STRATEGY IS QUITE ESSENTIAL
GOALS
● Employee satisfaction
benchmark (by survey)
● Turnover rate
S.R.C APPROACH
SPEAK (S)
● Periodic in-person assembly
across all companies
● Take feedback & initiatives
RESPOND (R)
● Reply & direction from boards of
management
● Timely manner
CHECK (C)
● Progress of taking actions
● Employees’ satisfaction
MEASUREMENT
● Raise employee engagement
● Encourage open
communication
PIC
● HR DEPT
IMPROVING ORGANIZATIONAL COMMUNICATION IS THE KEY TO PREVENT SIMILAR CRISIS TO VW
Culture Goal setting Corporate governance Future catch-up

8. The main cause of the scandal is VW’s goal and KPIs setting which placed too much
concentration on financial performances
VW’s CEO at that time set out a highly ambitious goal for the whole group
- Make VW not only the highest-selling automaker in the world, but more profitable than before
- Produce 10 million vehicles worldwide annually by 2018 and achieve pre-tax profit margins of
8% or higher, compared with 6% on sales of 6.2 million vehicles in 2007.
To achieve this goals, internal management was based on seven core performance indicators:
1) deliveries to customers
2) sales revenue
3) operating profit
4) operating return on sales
5) capital expenditure/sales revenue in the automotive division
6) net cash flow in the automotive division
7) return on investment in the automotive division
→ Financial goals
→ Not compatible with the technological development
→ Lead the managers to do anything to archive
revenue and profit target, even at all costs
Culture Goal setting Corporate governance Future catch-up

9. The new four target
dimensions are:
● Excited customers
● Excellent employer
● Role model for the
environment, safety and
integrity
● Competitive profitability.
How? 5 modules
● Best Governance
● Best Performance
● Best Brand Equity
● Software-enabled car
company
● Excellent Leadership
To avoid any scandals in future, environment, safety and integrity are now considered as main
goals besides other financial performance
→ more sustainable development
Goal SettingCulture Goal Setting Corporate Governance Future catch-up

10. The problem was exacerbated with the VW’s corporate governance failure, one of which came
from supervisory board structure
In the supervisory board, 5 people are relatives of the CEO
2 people from Qatari funds
Representatives from the State and workers just cared about employment condition
The only outsider was the Swedish bank’s chairman who advised one of the VW’s brands
→ Pose a threat of conflict of interest with Management Board
VW should restructure its supervisory board with more
outsiders elected by Board of Shareholder
Culture Goal Setting Corporate Governance Future catch-up

11. The “conflict of interest” threat also existed in the structure of corporate governance strategy
RMS/ICS : Risk Management And Internal Control System
GRC: Governance Risk and Compliance
By combining the risk-
management, internal-control
and compliance management
systems, the Group adopted a
single governance, risk and
compliance strategy to ensure
all potential risk areas were
covered.
However, the group expressed
the “ambiguity” of the
independence of Audit
Committee Chairman who
managed the auditing and
reporting on RMS/ICS
Supervisory board should partly manage the Audit Committee Chairman and ensure the independence of the group
internal audit
Culture Goal Setting Corporate Governance Future catch-up

12. VW KEEPS ESTABLISHING ITS TOP POSITION BY HARNESSING NEW MOBILITY SOLUTIONS
Trends
ProductsCustomers
5 Trends Changing Mobility Habits
Electrified
Autonomous
Shared
Connected
Yearly updated
Harnessing trends for more customer-
oriented products/ services
Capture key drivers’ personas
Future scenario:
✔ Redistribution of R&D focusing on
software solutions
✔ Significant rise in shared and
autonomous mobility
✔ Users of both private and shared will
be treated as target group
Younger, technically savvy
generations as significant driver in
more convenient and sustainable
mobility
Characterize the attitudes and behavior of successive generations.
Culture Goal setting Corporate governance Future catch-up

13. Autonomous & Shared mobility solutions with third parties shall be Volkswagen’s next growth drivers
Volkswagen develops Electrified & Autonomous Vehicles to facilitate “connected and shared” mobility trend
• 40% of personal mileage in Europe, US & China in 2030 would be autonomous.
• More people in the city own no car & follow sharing concepts in transportation
Ride-hailing
Car-
sharing
AUTONOMOUS
VEHICLES
ELECTRIFIE
D
VEHICLES
Mutually
supportive
Enablers of
connecting & sharing
✔ Reduces lead time
✔ Lower fuel & maintenance
cost
✔ Better integrated into
hailing apps
✔ Increase mobility services
quality
Culture Goal setting Corporate governance Future catch-up

14. Implementation Plan
2020 2021 2022 2023 2024 Cost projection
(2020.$)
Main activities Q3 Q4
Corporate Governance, Risk and Control System
Improvement
R&D on Autonomous & Electric Vehicles 100 billion USD
(compared to 91 billion
planned in 2019)
Partnerships with Car-sharing/Ride –hailing 3rd party
Organizational communication activity & system set-up
Key metrics Projection
Electric & Autonomous vehicle 500.000 units
Operating profit 19.504 million euros (15% growth compared to 2019)

15. CONCLUSION
Corporate culture and governance
restructuring✔ Fostering open culture among
employee
✔ Restructuring supervisory board &
audit committee
✔ Setting reasonable and sustainable
goals
Future vehicle trend catch-up
✔ Harnessing trends for innovation
mobility solution
✔ Developing autonomous and shared
vehicle strategy
Next steps for Volkswagen

16. APPENDIX
Volkswagen’s investment in Electric, Autonomous and Shared vehicles
Electric vehicles:
Autonomous and Shared vehicles:
The Volkswagen Group is investing around EUR 44 billion by 2023 in key
technologies to shape mobility in the future. In an interview with the “Welt am
Sonntag,” CEO Herbert Diess describes the steps to making driverless cars a reality.
The company is looking to establish new mobility solutions business, and acquire companies in
areas such as car-sharing, robo-taxis, and ride-hailing
Volkswagen recently invested $300 million in Gett, a ride-hailing app