Trouble in the empire

The Volkswagen group is heading for trouble, but it may yet be saved by its Skoda and Audi outposts, says Stephen Bayley

Mlada Boleslav is 27km from Srbsko. This is not a fragment from an account of the 1812 retreat, but an insight into the curious provincialism that defines the motor industry.

Mlada Boleslav is 27km from Srbsko. This is not a fragment from an account of the 1812 retreat, but an insight into the curious provincialism that defines the motor industry.

Mlada Boleslav is a far-flung corner of the Volkswagen Group, the equivalent in our day of the Roman Empire. It is vast, powerful and influential ... but has over-extended itself. Like the Roman Empire before the Dark Ages put the lights out, there are signs that the expansive imperial colonists have gone native, while there is a simultaneous danger that the old centre is losing its grip.

This nondescript Bohemian town is where they make Skodas. Mlada Boleslav still has a drab, Stalinist feel to it. Pretend the new BMWs and Mazdas are not there and you could be in Czechoslovakia under Husak, not a Czech Republic now part of the EU. It was here in 1895 that a pair of Vaclavs, Klement and Laurin, started making pushbikes. In the Twenties their company merged with the mighty engineering concern of Skoda Plzen and made real cars. Nationalised under the communists, Skoda was starved of resources and inspiration, but even before the Wall came down there were some tentative steps towards making world-class cars. And then on 16 April, 1991 Volkswagen bought a majority stake.

The deal suited both parties: Skoda got investment and technology while Volkswagen got another make to add to its ambitiously expanding portfolio. The logic was clear. Volkswagen itself produced volume cars for Western Europe, generating mountains of profit.

Audi, bought from Mercedes-Benz in 1965, would satisfy customers with more executive urges and the recently acquired Spanish concern SEAT would appeal to the colourful Latins of southern Europe. Skoda fitted perfectly: here was something for the newly emerging eastern markets. Volkswagen had now begun the most far-reaching campaign of brand management yet, made more subtle still by the later acquisition of Bentley, Bugatti and Lamborghini.

Behind the philosophy was the techno-economic reality of "platform sharing". This means spreading the costs of any car's expensive underpinnings over a range of apparently different vehicles: so a Golf's gubbins also take the form of a Skoda Octavia, a SEAT Leon, and an Audi TT. No one is certain whether this is brilliantly clever or ruinously complex: while certain costs are reduced, others are increased. But the policy drives Volkswagen Group designers on voyages of invention to create convincing and distinctive visual languages for their products.

Thomas Ingenlath is Skoda's design chief. I asked him about the constraints of working in the Volkswagen imperium. For instance, would he not get into trouble if he designed a Skoda that was as refined as an Audi?

He looked thoughtful for a short moment and then argued that Skoda had a unique culture, similar in its way to Ikea's. This is one of the most sensible things I have ever heard a car designer say. And in Mr Ingenlath's exquisite studios there are even boards on the wall showing Ikea logos and quoting Ikea's philosophy of "good taste you can afford".

The first generation of Skodas produced under Volkswagen demonstrated the break with Communism and showed they could make good cars. Now Mr Ingenlath has the opportunity to make exciting cars, but his concept of excitement is based not on the testosterone sandwiches they feed motoring journalists, but on democratic design principles. "Simply Clever" is the tag they have decided to use and Mr Ingenlath's interpretation of it has been concepts, including Ahoj and Roomster, that promise to rewrite the language of the car: a stylish utilitarianism. Can't be too soon, if you ask me.

Meanwhile, a few hundred kilometres west, another Volkswagen design general is plotting a future for Audi that will see it evolve from its traditions of pragmatic refinement towards more expressive design. This is Walter de'Silva, an Italian who worked at Alfa Romeo before joining SEAT in Barcelona. At Alfa he realised the importance of cars having faces, and gave the Alfa 147 its evocative snout.

Now Mr de'Silva is in Ingolstadt in charge of what Volkswagen calls the Audi Brand Group, which means Audi itself, SEAT and Lamborghini. He said Audi must be progressive, SEAT unconventional and Lamborghini extreme. The first evidence of Mr de'Silva's work is the new Audi A6, a masterful reconciliation of fine proportions with expressive flourishes. While sketching on holiday he realised you could join the lower air intakes with the traditional upper grille and give a 21st-century Audi a face like a 1930s Auto Union C-Typ. Few cars have had as much advance publicity.

But back at Volkswagen's imperial HQ thinking is not quite so clear. SEAT, for instance, is yet to achieve any meaningful presence anywhere, not even up the Ramblas. The Volkswagen Phaeton cannibalises the market of Audi, but the extraordinary vanity factory where it is built in Dresden draws attention to its slow sales.

It is true that platform-sharing has reached new levels of sophistication with Volkswagen's unloved limo donating parts to Bentley's Continental ("Ach," an engineer said, "we have found a way to charge $60,000 more for a Phaeton!"), but Volkswagen's key product, the Golf, is having identity problems. This is the equivalent of the Emperor Constantine dyeing his hair green and chewing the carpet: a sign that all is not well.

The first Golf of 30 years ago was a masterpiece. It established a world standard and saved a company complacently dependent on a single product, the original Beetle.

About two years ago, Golf became the best-selling Volkswagen of all time. And Volkswagen found itself in a similar predicament. It has been dependent on the Golf for too long: the latest Mark V has sold disastrously, contributing to under-performance, which has had most analysts saying "sell".

But things look better in Mlada Boleslav and Ingolstadt. Here there are clear ideas, evolving quickly and expressed with conviction. Gibbon told us about the fate of empires: arrogance and vanity lead to decline. How symmetrical and satisfying Volkswagen's colonial outposts might survive the collapse of the centre.

THE MARQUES THAT VOLKSWAGEN ATE

Audi roots go back 150 years, the modern entity formed in 1932. Acquired by VW in 1965, from Mercedes-Benz. Took over NSU in 1969.
Vorsprung durch technik

Seat: Socieded Espanola de Automoviles de Turismo, founded in 1950. VW bought 51 per cent of Seat from Fiat in 1986; the rest in 1990.
Auto emoción

Skoda: Vaclav Klement and Vaclav Laurin made their first car in 1905. Bought in 1991, from the Czech state.
It might earn you more respect than you think

Lamborghini: Ferruccio Lamborghini, tractor maker launched the 350 GT in 1964. Acquired by VW in 1998 from Chrysler via Megatech and Swiss fianciers
The House of the Charging Bull.

Bentley Motors was founded in 1919 and made its first car 1921. Acquired by VW messily, in 1998 from Vickers plc
Driving. Owning. Enjoying

Bugatti: Ettore Bugatti created his own company in 1909 in Molsheim. VW purchased the rights to produce cars under the Bugatti name in 1998.
1,001 bhp and it won't be long now