VW has announced a series of measures focused primarily on cutting costs, labor and development time for new vehicles.
VW is on track significant cuts and savingsin order to boost its profitability with a time horizon of 2026, when the company aims to operating profit margin of 6.5%from 3.4% which is today.
All this, according to the program «Accelerate Forward/Road to 6.5», they will not be achieved without sacrifice. Initially, the development time of new VW models will be reduced from 50 to 36 months, to get vehicles to market faster without sacrificing quality or safety. This will save more than 1 billion euros until 2028.
THE number of test cars in the technical development of new vehicles will be reduced by up to 50%, as digitization and technological advances allow more tests to be carried out on test benches. This could save around €400 million per year without compromising quality.
Other measures include procurement service improvements; which will allow the creation of annual savings of more than 320 million euros, enhanced activities after sales, which will generate more than 250 million euros per year, and optimization of of time production. which will save over 200 million euros every year. All these measures will be implemented as early as 2024.
VW announced that will reduce its administrative staff costs by 20%. As stated in its official statements, “open positions in the future will not be filled or will only be filled in exceptional cases. To this end, the company will also facilitate transfers within the group through an internal labor market system.” It is worth noting that the workforce reduction measures will take effect for VW AG from January 2024, following the “Digital Transformation Roadmap” agreement reached between the parent company of the VW Group and employee representatives in 2019.