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

The newest Porsche Cayenne is scheduled be unwrapped by the end of the month after completing endurance tests worth 2.7 million miles. Since we are just a few weeks away...
by - August 22, 2017
This is the time of the year when automakers give us teasers and previews of their upcoming models. Now, it seems like BMW is ready to unveil the M5 (F90)...
by - August 22, 2017
It is quite common to revive classic cars if you have a lot of extra money. Models like the Jaguar XKSS and Aston Martin’s DB4 GT have been upgraded to...
by - August 21, 2017
Famous designer of certain Ferrari vehicles like the Enzo Ferrari and the P4/5, Ken Okuyama has revealed another one of his designs at the 2017 Pebble Beach Concours over the...
by - August 21, 2017
The current generation of the BMW M3 (F80) sedan isn’t just sporty and luxurious in terms of looks, but also in terms of performance. Because of its athletic appeal, the...
by - August 21, 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