Apparently VW AG isn't making much money (especially in the US). They comprise of mainly four "brands" of car, they are: VW, Audi, Seat and Skoda. There are others but these are the mainstream brands. Toyota on the other hand appear to be making lots of profit. Here's what I think VW AG need to do to resolve their "issues".
Why spend thousands of pounds making 4 different Small Family cars - for example the Skoda Octavia, VW Golf, Seat Leon, Audi A3 (pictured above). With each car comes a seperate design team, management team, marketing team, showroom, TV commercials, safety test, factory, etc etc, if they made one of these cars, for example the VW Golf, they could spend all that money on the one car, and make it the best in the class, so that it would beat all rival companies.
Keep three brands:
Skoda, for budget, reliable, spacious cars that can compete on value and safety with KIA / Hyundai, etc.
VW, for mid-range, reliable, spacious "best in class" cars that can compete on safety and value with Ford / Vauxhall / Toyota etc, so that when people think: "Shall I buy a Ford Focus?" someone will say "No, the VW Golf is the same price and it is the best small family car available bar none".
Audi, for the best executive cars, and stylish sports cars that can compete with BMW, Mercedes, Lexus etc on quality, safety, cutting edge features, drivability, and price.
Here's what I would recommend for each class:
"City Cars" / Small - Super Mini (Market leader: Toyota Aigo, and clones)
VW Fox - £6500 - too expensive for a small super mini, and too "crappy" for a VW, simplify by selling it as a Skoda Box, and knock £2000 off the price. Alternatively make it better, much much better.
Supermini - (Market leader: Corsa / Toyota Yaris)
Skoda Fabia - from around £7k - this is what a supermini should be, economical, cheap, spacious, reliable, the Fabia matches all of these requirements.
VW Polo - more expensive, less spacious and bettered by the Fabia.
Seat Ibiza - Smallest of the four cars, unnecessary.
Audi A2 - around £14k - £14,000 for a supermini! This is way too much for this kind of car! Get rid of the AUDI A2. It's pointless.
Small Family Car - (Market leader: Ford Focus)
Skoda Octavia - very popular because it's more spacious than a Golf, and cheaper, however, it encroaches on Golf territory and Passat territory taking sales from both. Slightly too big, and "sensible", to replace the Golf styling. (Although could work re-released as a long hatchback styled Golf Bora/Jetta replacement).
VW Golf - Sold over 22 million cars for VW and is obviously still a good seller. Get rid of the Bora / Jetta, and release an Octavia styled hatchback.
VW Golf Plus. No comment, mostly pointless, could be removed from the line up by releasing an Octavia shaped Golf Hatchback.
Seat Leon / Toledo - the Leon is like a Golf but ever so slightly different.
Audi A3 - Small, expensive, make the Golf better and you don't need the A3.
VW EOS - a convertable Golf, why have a second name, release it as a Golf Convertible instead.
Large Family Car - (Market leader: VW Passat*)
Skoda Octavia? - Takes sales from the Passat when people realise they can't get a hatchback version of the Passat, and the Octavia is several thousand pounds cheaper (especially when people start looking past the badge, and realise that both cars are based on the Golf V chassis). Slightly too small to be a Large Family Car, and slightly too small to completely replace the Passat.
VW Passat - this is one of the big sellers for VW, and is a large family car, therefore it should NOT be a saloon car - VW should release this with a hatchback boot, and get rid of the Octavia. Make this better than the Ford Mondeo / Vuaxhall Vectra. * The fact that it is rated as the best in class should mean that it can happily replace the models from the other brands, such as the Skoda Octavia, and Seat Toledo.
Audi A4 - Saloon, expensive, make the Passat better and you don't need the A4.
Audi A6 - this should be kept as a saloon version of the Passat, for the executive traveller who doesn't have a family. Make this better than the BMW 3 / 5 Series / Mercedes / Lexus equivalent..
MPVs - (Market leader: Vauxhall Zafira / Ford S-Max / Toyota Corrolla Verso?) - Definitely an area that needs improvement, Toyota make an appealing and spacious seven-seater, and Ford make an appeallingly quick S-Max for the parents who still want an exciting car.
Skoda Roomster - Budget "clever" MPV? It makes sense for Skoda to make an MPV because families are the most likely purchaser of an MPV, and with several mouths to feed the budget may already be limited.
Seat Altea - Mini-MPV. Like a Golf-Plus, which is pointless as well.
VW Touran - Budget MPV. Slightly larger than the Skoda, and fairly good value for money, makes sense, but dull in comparison to the Ford S-Max. Should be updated and made more exciting. (and better than the S-Max)
Seat Alhambra / VW Sharan - same as Ford Galaxy, been out for a very long time now, ditch it and let Ford carry on selling it if they must, although Ford have probably replaced it already with the Ford S-Max.
Executive - (Market leader: BMW 5 Series)
VW Phaeton - Expensive, large, unnecessary, wrong brand for this market, and doesn't fit VW's philosophy of "People's Car".
Audi A6 / A8- Expensive, large, right "brand" for this market. Needs to be better than the Lexus / BMW / Mercedes equivalant.
Skoda Superb - A stretched, cheap, old style Passat. Wrong brand for the market. Can be removed by VW releasing a cheap "club" Passat, or something similar.
Off-road wannabe - (Market leader: BMW X5 / Range Rover)
VW Touarag - Expensive, large, unnecessary. Wrong brand for this market.
Audi Q7 - Ditto, but the right brand for this market.
If you are going to release a 4x4 off-road vehicle, just release a real proper, full on off roader that's capable off-road, or don't bother at all. These fall into the "don't bother at all" category, although the "trendy rich" will find the Q7 appealling.
Sports Cars - (Market leader?) - I have no issues with these. It makes sense for Audi to focus on sports, or executive cars.
Audi TT - stylish classy affordable for a sports car.
Audi R8 - full on sports car (too early to say).
To summarise the complete range would look something like this:
Skoda: Box (City car), Fabia (Super mini), Roomster (Mini-MPV)
VW: Golf (Small Family), Passat (Large Family), Touran (Small-MPV), insert car here (Large-MPV)
Audi: A6 (Exec), A8 (Large Exec), TT (Sports)
Market Leader Source: Channel4 Cars - Best in Class.