No. 1 goal
Without a turnaround in mass markets for VW, Europe's No.1 automotive group could struggle to surpass Toyota as the world's biggest carmaker by 2018. In the nearer term, failure to get to grips with the lower-cost brands is likely to weigh on its share price.
"VW needs a compelling presence in volume segments and emerging markets if they're serious about clinching the top spot and retaining it," said Stefan Bratzel, head of the Centre of Automotive Management think-tank near Cologne.
Regardless of whether it surpasses Toyota, VW must succeed in lower-cost categories to remain a force in a volume segment that brings the economies of scale required to meet its profit goals. Skoda and Seat accounted for 13 percent of VW's 9.7 million record sales last year.
VW rejected suggestions that the change of tack may renew past friction between Skoda and Seat and with the core VW division.
The VW group has 12 brands and about 300 distinct models. In 2009 the Skoda Superb trumped the more expensive VW Passat in quality surveys and offered features that were priced as extras in the Passat. The upscale shift ruffled feathers at VW, resulting in the departure of Skoda's then-CEO.
"Why should Skoda build only practical cars," VW Chief Executive Martin Winterkorn told Reuters. "However, we must ensure precise distinctions are made between the brands, that the brands interact well and that everyone finds their corner."
Targets may fall short
Forecasters, however, remain skeptical that VW's shake-up will have the desired effect.
"VW has such a spread of the [volume] market with the likes of Skoda and the VW brand. Seat doesn't fit right with that portfolio," said Jonathon Poskitt, head of European forecasting for specialist analyst LMC Automotive.
Seat deliveries could rise 30 percent to 462,000 cars by 2018, research firm IHS Automotive estimates, still short of Stackmann's goal of 500,000. Sales at Skoda, meanwhile, could grow by 26 percent to 1.16 million vehicles, the forecaster says, against a target of 1.5 million.
"I view myself as a member of a relay team taking part in a marathon run," Stackmann said. "It's a tough business."
Stackmann said Seat is considering building cars in China. Plans by his predecessor to expand to China from Seat's base in Martorell near Barcelona failed because of high import duties and distribution problems, Stackmann said. Seat sold a dismal 1,100 cars in the world's biggest market in its first full year there in 2013.