Volkswagen brand CEO Thomas Schaefer has called for a short-term cost freeze in a meeting with other high-ranking Volkswagen employees to reduce the manufacturer’s bloated costs. Schaefer warns that this is the last wake-up call and that the manufacturer is facing difficult times.
“We allow the costs to be too high for many years,” Schaefer said during the management meeting. He plans to cut spending by the end of this year as part of a wider cost-cutting plan across the group. Volkswagen last month announced an “Accelerate Forward” plan designed to improve business performance.
This new plan is a top priority for the entire management of the Volkswagen brand and is expected to increase revenues for the VW brand by around 10 billion euros. The manufacturer will also focus on the production of its most popular models, but reduce the list of different variants and options. This is nothing new and is being introduced by other manufacturers as well. The idea is simple – reduce the list of additional options that the customer can choose from, and instead package these options as different equipment versions. In this way, the complexity of production decreases, efficiency increases, and costs fall. Volkswagen has other problems – although the manufacturer delivered more than 320,000 electric cars in the first half of the year, which is an increase compared to last year, Volkswagen’s market share in China has decreased, which is bad.
China accounts for about 40 percent of VW’s revenue, but Volkswagen’s grip on the market is slowly slipping from its fingers as domestic automakers’ offerings improve. Volkswagen currently has large backlogs and this somewhat masks the overall demand problems. The manufacturer has announced that it has to reduce production and lay off employees due to lower demand.
2023-07-18 08:00:00
#Volkswagen #brand #proposes #shortterm #cost #freeze #predicting #difficult #period #future
