A leadership crisis has erupted at Europe's largest carmaker after Volkswagen's chairman gave an interview criticising its CEO. Ivor Bennett looks at the damage it could cause, as the company struggles to revive profits.
Perhaps the cracks were already forming. This photo taken in 2013 suggesting a strained relationship. But now Volkswagen's chairman Ferdinand Piech has made his reservations public. Telling German paper Der Spiegel he's distanced himself from CEO Martin Winterkorn. A leadership clash with ramifications beyond the personal, says IG's Chris Beauchamp. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "It looks like unfortunately for Volkswagen shareholders that this is going to be a long issue and is going to go on for some time. Both sides digging in clearly, hardening their positions, and being unwilling to budge. So it's almost the euro zone crisis of another version really." The share price took a hit as trading opened - down 2 percent before rallying later. Winterkorn had been tipped to succeed Piech. Under his watch, sales have increased by 64 percent. The 10 million vehicles sold last year taking it past General Motors as the world's second biggest carmaker. But there are problems too. Low margins in its core passenger business. And further afield. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "The failure to really get a foothold in the US which is key to Volkswagen, has been the major issue and that's really why he's beginning to voice his disapproval at the way the company's heading and it's clear he's using his weight with the board to try and force change he believes isn't coming at the speed he thinks is necessary." Winterkorn though is digging his heels in. The CEO already rallying support among the company's supervisory board. With over half its 20 members backing him to stay. The battle lines drawn, Volkswagen could be in for a bumpy ride.