VW Group will cut parts variety to save costs and hike profits

Article by Christian A., on January 23, 2015

Volkswagen Group is planning to cut the variety of components on VW-branded vehicles to reduce costs and boost its profitability. Chief Financial Officer Hans Dieter Poetsch said in an online presentation that such move will offer "significant savings potential."

Poetsch said that reducing the number of battery and interior-lamp models in the current Golf by around half will help cut costs. He added that reducing engine and gearbox variants for the next version of the Polo by 30 percent will improve costs.

He confirmed that Volkswagen was able to meet its group target in 2014 – a 3-percent jump in revenues and 5.5 percent to 6.5 percent operating margin. He said that the carmaker is "well on track" to achieve its goals in three years.

The VW brand is aiming to achieve EUR5 billion ($5.8 billion) in earnings by 2017, with operating profit at least 6 percent of revenue by 2018. VW also targets a group-wide pretax profit exceeding 8 percent of revenue.

Volkswagen topped 10 million vehicle sales in 2014, four years earlier than targeted. That allowed VW to remain the second largest carmaker in the world, within a striking distance from Toyota Motor Corp.

Jose Asumendi, an analyst at JPMorgan Chase & Co., said in a report to clients that the cost reduction plan is as a positive step to provide more clarity “behind the path to re-rate the margins."

Topics: vw

If you liked the article, share on:

Comments

Recommended

A racing team is claiming that it has managed to break the lap record in its category in the ever-demanding Nurburgring circuit in 2016 while driving a road-going Volvo S60...
by - May 27, 2017
Aside from the officially confirmed BMW 8 Series, the next generation BMW M5 (F90) is getting a lot of attention from the fans, enthusiasts and even potential customers around the...
by - May 27, 2017
Automobili Lamborghini’s preparations for the production of its first ever sports utility vehicle, the new Lamborghini Urus, has reached new grounds as the Italian carmaker is disclosing plans to construct...
by - May 26, 2017
The upscale version of the GMC Yukon body-on-frame sport utility vehicle – the GMC Yukon Denali – has been refreshed for the 2018 model year. It now sports a new...
by - May 26, 2017
The largest gathering of Volkswagen and Audi cars in Europe is underway, and the German premium carmaker is displaying the third model of its G-Tron range at the 2017 Worthersee...
by - May 26, 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