Volkswagen’s new CEO will take the company to ‘the next level,’ analysts say

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Herbert Deiss, upcoming VW CEO.

VW’s share price plunged by around 40 percent in September 2015 when the news broke. However, shares have rebounded 92 percent from that trough, and are now even 8 percent higher than the time immediately before the crisis.

The Volkswagen Group, which also includes brands such as Audi and Porsche, reported a 4.3 percent increase in sales for 2017, compared to the previous year.

According to Anna-Marie Baisden, head of autos research at BMI Research, the firm has been criticized for not changing fast enough. There are “too many layers of control to make any decisions because of the big family shareholdings,” she said.

However, the appointment of Diess was a good strategy, she added. “While not a total outsider he is relatively new to the company and so brings a new outlook,” Baisden said.

She said that he has a track record of cost cutting with the VW brand, while stopping short of mass job cuts. He is also “very forward looking” focussing on new competition such as Tesla, rather than traditional rivals, according to Baisden.

VW’s share price was slightly higher Friday morning.

Meanwhile, UBS analysts said it expects VW to beat consensus expectations and raise guidance later this year. “Diess might revisit the 2020 business plan later this year … We think his strong track record at the VW brand so far and previously at BMW could well result in more ambitious targets, and several brands are still well below potential in terms of profitability,” the analysts said in a research note Friday.