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3/13/2019, 10:24 AM (Source: TeleTrader)
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VW brand to cut costs, accelerate investments

Volkswagen AG said on Wednesday that its main brand would focus on "competitiveness on a sustained basis" this year and start an "electric offensive." Efficiency measures, cost cuts and digitalization are projected to produce earnings of €5.9 billion per year from 2023. The automotive giant said it wouldn't shed jobs, counting on retirement, while that it would create 2,000 more jobs in electronics architecture and software.

Targets imply operating returns above 6% on the horizon, compared to 4% to 5% now, and to lift net operating cash flow from neutral to more than €2 billion by 2025. The Wolfsburg-based manufacturer revealed aspirations to improve productivity in factories by 5% per annum.

The e-mobility program is aimed at reaching the number one position in the world by 2025 with sales of one million electric vehicles a year, according to the announcement. Engineers have 20 models in the segment's pipeline, starting with the compact ID., which is designed for net zero carbon footprint over the life cycle. Investments in the field, including €4.6 billion on digitalization, should reach €19 billion by 2023 compared to €11 billion from the update in November 2018, the carmaker said. Its core division plans to reach the capacity of 330,000 units in Zwickau with six electrified models from three brands.

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