Volkswagen Group wants to boost profit at its volume brands

Article by Anita Panait, on September 19, 2013

Although Europe's road to recovery remains uncertain, Volkswagen Group remains optimistic about its business and still plans to boost the profitability of its volume brands.  The German is expecting its loss-making Seat unit and its VW brand to contribute more towards the group's target to become the largest carmaker in the world three years from now.

To post higher profit margins, VW needs to expand beyond its home market and share more components to reduce costs. The VW brand, which account for a large part of the group's vehicle sales, is expected to post an operating profit margin that is over 6 percent of sales this year, according to a Sept. 9 presentation by VW Chief Financial Officer Hans Dieter Poetsch.

Seat is expecting to post a turnaround by posting profit margin of more than 5 percent, after logging EUR156 million in operating losses in 2012. Skoda is aiming to post a profit margin that is between 6 percent and 8 percent of sales, according to the presentation, which didn't set a timing for the achievement of the goals.

Daniel Schwarz, an analyst at Commerzbank AG, remarked to Bloomberg News that improved margins for Volkswagen's volume brands depend on "substantial cost reductions" through the rollout of parts-sharing technology, adding that the targets seem realistic. The VW group relies on its luxury units for more than half its profits, with profit from Audi and Porsche as well as presence in China helping it offset a six-year decline in the European car market.

Despite uncertainties in Europe, VW group still keeps its eyes on expansion, as evidenced by the launch of mainstream models like the Seat Leon ST and Skoda Rapid Spaceback and a van-like version of the VW Golf at the Frankfurt motor show this week. The carmaker has also unveiled the VW e-Golf and e-Up electric vehicles as well as a plug-in hybrid version of the Audi A3 hatchback.

Topics: vw, profit

If you liked the article, share on:

Comments

Recommended

In September 27, 2016, Porsche initially filed for a patent that is the “Unique Active Rear Diffuser”. And earlier this week, on April 27, 2017, the United States Patent and...
by - April 29, 2017
The Insurance Institute for Highway Safety (IIHS) has given its Top Safety Pick+ award to the redesigned version of the 2017 Kia Cadenza. This was a result of excellent a...
by - April 29, 2017
It’s pretty neat if you possess something of an extraordinary breed like, say, the Pagani Huayra. There are after all just a total of 100 units ever been built by...
by - April 28, 2017
If you’ve ever visited an arcade, chances are you have already seen a Logitech G920 wheel. If that doesn’t ring a bell, it’s the steering wheel that you use when...
by - April 28, 2017
Toyota Motor Corporation disclosed that it will be bringing two of its Mirai fuel cell vehicles to China by October of this year. Tests will then be conducted on these...
by - April 28, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries