New MQB platform adds problems for Volkswagen

Article by Christian A., on August 2, 2014

Volkswagen's decision to add extra production shifts in Germany for the Golf hatchback is not only attributable to strong demand, but also to problems adjusting to its new MQB platform, sources told Reuters. The MQB modular platform is expected to result to big savings as it uses more common parts across its increasing number of models.

According to a worker at Volkswagen's Wolfsburg site, the carmaker’s push to build more models has proven to be tricky on some assembly lines, leading to delays and overtime. He said that VW is having many “self-inflicted troubles.”

He added that this has forced some workers to work overtime, which has become totally unnecessary in some cases. Volkswagen has seen its sales – including those from it premium brands – surged significantly in recent years. Its sales have soared more than a half to around 9.7 million vehicles in 2013 and is expected to top 10 million units in sales this year.

That growth was supported by huge investments and costs to increase its model lineup. For instance, VW brand saw its sales rise by almost a third over three years with the Golf expanding to 14 models, but profit margins still remained low.

VW brand is aiming to post a profit margin of 6 percent in the medium term, but its 2.9 margin in 2013 shows it still has more work to do. In contrast, profit margin at Toyota was 8.8 percent and at Hyundai was 9.5 percent. [source: automotive news - sub. required]

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