Volkswagen, Europe's biggest carmaker, yesterday took the wraps off a new strategy designed to give a sharper focus to its sprawling collection of brands, which runs from Bentley to Skoda.

From early next year its passenger car business will be divided into two groupings, with Seat and Lamborghini joining Audi to form one while Skoda, Bentley and Bugatti will come under the Volkswagen brand group. The group's commercial vehicles business will be managed separately.

In a statement issued after a VW board meeting yesterday, the group said the changes were aimed at "intensifying and expanding market and segment coverage".

The move is likely to be seen as an indication that Bernd Pischetsrieder, the former BMW boss who is set to take over as chairman and chief executive of the VW management board next spring, is moving to set his own stamp on the group.

There were signs that the move may also have been intended to draw some of the sting from recent criticisms of VW's relations with shareholders.

Significantly, the group said that following the adoption of the new structure, "reporting within the Volkswagen group will be according to the new structure. This will support corporate transparency and our customers' and shareholders' interest in the company".

The company, in which the state of Lower Saxony owns an 18.6% stake and company rules forbid any investor holding more than 20%, has a reputation for being less investor friendly than many of Germany's big companies. Earlier this year, for example, it came under fire from the US hedge fund Liverpool Limited Partnership, which criticised its share buyback programme.

VW's move towards a more focused approach for its stable of brands is likely to be welcomed by investors and analysts, although they may not be immediately convinced.

"It will take a long time for Pischetsrieder's strategic changes to bear fruit," according to an investment bank research note yesterday.

Yesterday's revamp includes a new regional structure based on the European Union, North America, South America-South Africa, and Asia-Pacific.

It also includes a management reshuffle, with Martin Winterkorn taking over at Audi and Audi boss Franz-Josef Paefgen becoming chairman of Rolls-Royce and Bentley, as well as taking over responsibility for the group's motor sport operations. Rolls-Royce passes to BMW in 2003.

VW also announced that its capital expenditure plans for the next five years will be little changed, at €31bn (£19bn).