VW Has ‘One, Maybe Two Years’ to Turn Things Around, Says Finance Chief [UPDATE]

• Volkswagen Group executives met with employees on Wednesday.
• CFO Dr. Arno Antlitz warned that point was operating out to alter route amid a drop in demand.
• VW Group gross sales in Europe are up barely, however EV gross sales are down considerably.

Replace: In an e mail to Motor1, a VW Group spokesperson supplied the next statements made not too long ago by VW Group CFO/COO Dr. Arno Antlitz concerning price effectivity for the corporate. The statements replicate the effectivity of VW operations in Germany.

“We’ve been spending extra money on the model than we earn for a while now.
That may’t go nicely in the long run. If we feature on like this, we can’t succeed within the transformation. 

In Europe, 2 million fewer automobiles are at present offered than earlier than COVID. Earlier than COVID, round 16 million automobiles had been purchased in Europe. Throughout and after COVID, this determine fell to round 12 million automobiles as a result of the complete trade didn’t have sufficient semiconductors. The market in Europe has recovered since then, however is not going to return to its former stage. We count on round 14 million automobiles to be offered per 12 months sooner or later, if in any respect. So there’s a shortfall of round 2 million models.

We [the Volkswagen Group] are the biggest producer with round 1 / 4 of the market share in Europe. We’re in need of round 500,000 vehicles, the equal of round 2 vegetation. And that has nothing to do with our merchandise or poor gross sales efficiency. The market is just not there.

It’s our joint accountability to enhance the price effectivity of the German websites specifically. We have to improve productiveness and cut back prices. We nonetheless have a 12 months, perhaps two years, to show issues round. However we’ve to utilize this time.

Concurrently, we have to cut back the complexity of our processes and leverage much more Group synergies.”

Dr. Arno Antlitz, chief monetary and working officer for Volkswagen Group, instructed employees gathered on the firm’s Wolfsburg headquarters the corporate has “one, perhaps two” years to show issues round for its most important automobile model, Volkswagen. His phrases come simply days after information that VW may shut two vegetation in Germany, one thing that hasn’t occurred within the firm’s complete 87-year historical past.

Roughly 25,000 employees had been available for a gathering with firm executives on Wednesday, per a report from Reuters, they usually had been somewhat vocal about the potential for plant closures within the nation. Within the Nineties, an settlement was established that assured job safety of VW Group workers by way of 2029. However VW’s management argues that altering markets in Europe would require important price cuts as demand drops. Antlitz talked about a shortfall of round 500,000 automobiles and instructed the meeting that gross sales seemingly would not get better within the post-pandemic period.

In response, the Volkswagen works council blasted firm executives for failing to do their jobs. In keeping with Euronews, Chairperson Daniela Cavallo did not mince phrases through the assembly, accusing the board of not specializing in the core enterprise and making workers pay for his or her errors.

Glancing at latest VW Group gross sales stats, issues do not seem as dire as Antlitz suggests. Second-quarter outcomes present the European market is up barely at 1.9 p.c, whereas gross sales are additionally up in South America and the US. It is a completely different story in Asia, although, the place competitors from China has VW Group gross sales down 8.2 p.c. Trying particularly at electrical automobiles, the corporate is struggling all throughout Europe with gross sales down 15.2 p.c. With VW Group pushing exhausting in direction of an electrical lineup in its plethora of manufacturers, these numbers level to a troublesome future.

Volkwagen’s longterm future within the US stays unsure. Within the meantime, VW’s reboot of the Scout model continues to be on monitor with its new electrical truck and SUV scheduled to debut on October 24.