VW Chairman Ferdinand Piech resigns

Chairman of the Volkswagen Group Supervisory Board, Ferdinand Piech, resigned his position yesterday following the recent power struggle with VW CEO, Martin Winterkorn.

Grandson of Ferdinand Porsche, Piech and the Porsche family retain a 51 per cent controlling stake in the Volkswagen Group.

The Austrian engineer largely responsible for the Porsche 917, Audi Ur Quattro and Bugatti Veyron is infamous for ruling VAG with an iron fist.

In a recent interview with German magazine, Der Spiegel, Piech stated that he was "at a distance" to Winterkorn, reportedly over Volkswagen's failure to crack the lucrative US market and extremely tight profit margins.

While the group as a whole is hugely profitable, largely thanks to the substantial profit margins earned by Audi (approaching 10 per cent) and Porsche (over 15 per cent), Volkswagen itself has seen margins shrink to just above two per cent in the first quarter of 2015 due to contracing sales and the enormous investment required in its MQB platform.

Piech has a history of dispatching high-ranking VW executives with a pointed remark; former Audi boss Frank-Josef Paefgen, Winterkorn's predecessor Bernd Pischetsrieder and former Porsche head Wendelin Wiedeking have all found themselves suddenly unemployed after earning Piech's displeasure.

Far from weakening Winterkorn's position, however, Piech's comments appear to have strengthened it, with Wolfgang Porsche saying "The statement from Dr Piech portrays his private opinion, which is not aligned with that of the family."

The rest of the board also quickly moved to support Winterkorn, indicating that he is likely to be asked to stay after his contract expires in 2017.

It was expected that Winterkorn would replace the 78-year-old Piech as chairman when the latter's term expired in 2017; deputy board chairman Berthold Huber will act as interim chairman.

The most immediate impact of Piech's departure is that it apparently clears the way for Volkswagen to enter Formula 1. It's believed that Audi is the most likely of the group's brands to make the leap to F1, possibly by buying the Red Bull team.

We'll bring you more news as it comes to hand.