VW Group denies it may miss 2015 profit targets due to MQB costs

Article by Anita Panait, on September 21, 2013

Volkswagen Group dismissed a report by Manager Magazin that it may fail to achieve its profit target due to slower growth and higher-than-expected costs for the ramp-up of its MQB modular architecture. The magazine has reported that VW Chief Financial Officer Hans Dieter Poetsch is worried that the carmaker won't be able to meet 2015 targets and is seeking to reduce costs by about EUR1,000 ($1,355) per vehicle, citing company sources.

The magazine added that higher than expected costs for the MQB are weighing on profit margins, adding that new models like the Touran minivan and the Tiguan compact SUV were expected to be less profitable than their previous versions.

The magazine claims that Poetsch made these statements to Volkswagen managers at VW's headquarters on Sept. 13, 2013. In a statement, Volkswagen dismissed the report, saying it was "without any foundation" and that the carmaker remains fully committed to its statements on the future business development of the group.

VW said that the suggestion that the carmaker will not achieve its targets is "wrong." Juergen Pieper, an analyst with Bankhaus Metzler, remarked that trends show VW is “heading for a difficult phase for the first time in years." He noted that the sales momentum in the past two months have become "clearly weaker."

The MQB front-wheel-drive platform, which is being developed since 2007, allows VW to share more components between different models and is being employed over the next four years at a cost of nearly $70 billion, according to estimates by Morgan Stanley.

VW wants to produce over 40 new vehicles across its volume brands based on the MQB platform. The currently available VW Golf, Audi A3, Skoda Octavia and Seat Leon were the first to use the platform. [source: automotive news - sub. required]

Topics: vw, profit

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