Automotive News Europe — 2024-08-28
Automotive Industry
VW brand aims to lift its return on sales to 6.5% from 2.3%.
Volkswagen Group's namesake passenger cars brand is struggling to meet its €10 bn ($11.14 bn) cost-cutting target, undermined by issues including slowing sales and missing parts, a German business paper reported.
The VW brand was €2-3 bn short of its savings goal for 2024, two sources told Handelsblatt.
Among problems faced by the brand are production shortfalls because of supply shortages of parts such as electric motors, the need to offer car buyers bigger incentives to boost demand and slowing sales of battery-electric models.
VW brand boss Thomas Schaefer is looking at more cost-cutting, especially in the areas of sales and technical development, sources told Handelsblatt. Schaefer will discuss new efficiency measures with top managers in Wolfsburg on Monday (2 September 2024), the paper said.
VW announced details last December of the planned cost cuts that it hopes will lift the brand's return on sales to 6.5% by 2026, up from 2.3% so far in 2024.
Measures it listed to achieve that target included:
VW said at the time savings of up to €4 bn should take effect throughout 2024.
Chief Financial Officer Arno Antlitz said at the carmaker's results conference in August that some measures would require time to take effect.
VW Group CEO Oliver Blume said at the conference that "costs, costs, costs" were the focus for the years ahead after reporting lower margins for the first half.