Works council chief says VW could still get cost savings of more than $5.7 billion

Article by Christian Andrei, on February 2, 2015

Volkswagen could still wring out more savings its passenger-car brand by "substantially more" than the EUR5 billion ($5.7 billion) planned, according to works council chief and supervisory board member Bernd Osterloh. He said that the carmaker’s product-development processes can still become more efficient to get more savings.

These extra savings could come from moves like intensifying a cutback in the variety of vehicle components. Osterloh said that in 2014, the carmaker’s VW assembly workers have submitted over 500 ideas to improve efficiency. VW’s sales operation also came up another 800 suggestions.

Chief Financial Officer Hans Dieter Poetsch has said in January that cutting the range of parts in vehicles like the Golf and Polo hatchbacks will offer "significant savings potential." Restoring profitability at the VW passenger-car brand is part of a bid to become more cost competitive and better offset volatile car markets.

This bid has included limiting spending increases and hiking revenue, while spending EUR17 billion annually through 2019 on new vehicles, technology and factory expansion. Chief executive Martin Winterkorn has shifted VW’s focus from sales growth to boosting earnings.

He wanted the VW nameplate to boost its profits by EUR5 billion by 2017, including boosting the operating profit margin to at least 6 percent of revenue by 2018. Osterloh noted that the weak Russian ruble and the dropping demand for vehicles are affecting VW earnings by "a three-digit million-euro" sum.

He also struck down a recent report by Manager Magazin saying that VW's new holding company for its heavy-truck business will be based in Frankfurt.

According to Osterloh, it would make "no sense" for the unit to be operating in a location that has no link to other divisions of VW group. The group is targeting to surpass Toyota Motor Corp. as the largest carmaker in the world by 2018.

Topics: vw

If you liked the article, share on:


Login or Create new account to add a comment!


Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016
Mini has just provided the world with a preview of its first hybrid model that employs petrol-electric power to propel its wheels. Derived from the second generation of the Mini...
by - October 20, 2016
For the second time in three years, German driver Marco Wittmann of BMW Team RMG reached the summit in the DTM Drivers’ Championship. Even though Wittmann only secured a fourth...
by - October 20, 2016
The recent motor show has given us a lot of promising vehicles to look forward to for the time being. After we caught a glimpse of the future of motoring,...
by - October 19, 2016
Almost immediately after its launch, car designers have rendered their own adaptations of the new BMW 5-Series (G30). It’s just how it goes. Most folks with very creative minds couldn’t...
by - October 19, 2016