Due to earlier decisions and high costs, the key brand of the Volkswagen group has lost its competitiveness, its head Thomas Schafer said at a meeting at its headquarters in Wolfsburg. Now the auto giant is faced with the task of increasing the efficiency of the transition to electric cars: it plans to reduce costs by 10 billion euros by 2026, including through layoffs.
It is not yet known how many employees are planned to be cut. It is reported that they will be offered to enter into agreements on early retirement.
However, layoffs are only part of a strategy aimed at improving the brand’s performance. Other measures should help save the target 10 billion euros: in particular, getting rid of “ballast” – models that compete with each other within the company. According to HR board member Gunnar Kilian, management must “have enough courage and integrity to jettison” such projects. Details will be determined by the end of the year.
Among the mass brands of the Volkswagen Group, Volkswagen has the highest sales in the first three months of 2023, but also the lowest operating profit. The company plans to increase its return on sales from last year’s 3.6 percent to 6.5 by 2026.
In a recent ranking of the world’s most valuable brands, Volkswagen took only 50th place, behind Audi and Porsche. There were only three automakers in the top ten: Toyota (sixth place), Mercedes-Benz (seventh place) and BMW (10th place).
Back in the summer, Thomas Schafer warned his top managers that difficult times had come for Volkswagen and called for austerity. According to him, the company is spending too much money in many areas, and therefore literally everything is at stake now.
We can’t wait: new cars are not for us
