FRANKFURT -- Volkswagen Group is shifting away from its era of empire building with plans to bundle its fragmented components businesses and review its portfolio for possible asset sales, people familiar with the matter told Bloomberg.
The portfolio review will assess Volkswagen's 12 brands as well as side businesses such as ship engines, while components manufacturing across the group will be folded into one entity, the sources said.
CEO Matthias Mueller presented his plans to VW's supervisory board on Tuesday and will outline the strategy to the media on Thursday. VW officials declined to comment ahead of the public presentation.
Mueller is undertaking a sweeping strategy review that includes backing off a focus on growth at all costs, shifting the company into car-sharing and stepping up electric-vehicle development.
VW plans to merge the components units of each brand into one new entity that would include about 70,000 employees at more than two dozen locations worldwide, allowing it to save costs and boost efficiency from a single management and unified strategy, sources said.
VW is also likely to announce plans for a portfolio review, which could lead to the sale of non-core assets, said the people. While no decisions have been made on which assets to sell, ones that could end on that list include motorcycle brand Ducati, the MAN turbo and diesel business and MAN Renk, said the people.
An initial public offering of the trucking business could also be considered down the road, one of the people said.
The steps make "perfect sense," said Arndt Ellinghorst, a London-based analyst with Evercore ISI. "The financial market still doesn't seem to realize that there is more going on at VW than some people might think."
While the size of the company's components business is difficult to estimate, VW reported 14.6 billion euros in revenue in 2015 from selling components to third parties, including Chinese joint ventures, Ellinghorst said