Recently there have been several rumors about restructuring plan that Volkswagen will implement to become more efficient and profitable. The plan, which is now confirmed directly by the German brand and is called “ACCELERATION FORWARD | Road to 6.5”.
The goal is to achieve sustainable return on sales 6.5% to protect investments in new technologies and jobs. To this end, the brand expects to increase profits by around 10 billion euros in 2026.
How will Volkswagen achieve these goals? The plan was created to respond quickly to a particularly challenging market context. Thomas SchaeferCEO of Volkswagen, commented:
The program is the number one priority for the entire Board of Directors. We need to breathe new life into the Volkswagen brand and position it firmly for future growth, which is why we are now undertaking a massive concerted effort. We need to achieve a sustainable return on sales of the Volkswagen brand at 6.5%. Achieving this goal in 2026 is very ambitious, but doable if we combine our efforts. This will allow us to save jobs, finance our future with our own resources, and continue to invest in new vehicles and technologies, upgrade our facilities and train our staff.
The automaker explains that the program will be implemented on two levels. The first level includes the main areas of brand activity: administration, technical development, material costs, products, price/range, vehicle design, as well as sales and quality. Each area of activity will have specific objectives and measures and thus contribute to the achievement of program objectives in terms of costs and revenues.
In addition, the plan will follow a new joint strategy at the second level of measures: key projects covering several areas of action will provide greater efficiency and increased profits. The German brand says that the focus will be on aspects such as reducing the complexity and number of options, the sales model, reducing bureaucracy, as well as product optimization and exit on two main platforms, modular platform MQB extension and electric OIE.
What does all of this mean? number one car manufacturer gave some examples to better explain how they will operate.
Volkswagen intends to focus more on three-dimensional models. Production of low-volume models, such as the Volkswagen Arteon, will be discontinued. We will focus on a small number of the main Volkswagen models. This will reduce the complexity and give higher profits. The reduction in the number of variants opens up another possibility: for the ID.7, for example, this means 99% fewer configuration options than the Golf 7. In addition, the company intends to optimize the use of plant capacity in order to increase profitability and be able to respond more flexibly to demand and market fluctuations in the future.
Therefore, Volkswagen is also committed to further use of synergy in the German group.
For example, production in the mass brand group in the future will be even more systematically focused on multi-brand factories and vehicle platforms: for example, in connection with VW’s planned entry-level electric model, which will cost around 25,000 euros, SEAT/CUPRA. will take the initiative. Another example of synergy is the joint development and production of the Volkswagen Passat and the Skoda Superb, which will achieve an efficiency of 600 million euros over the life of both models.
The program should be implemented in close collaboration with i workers’ representatives. All measures should be in place by October 2023. Due to this Daniela CavalloChairman of the factory council, said:
We all agree that we need to achieve targeted savings without lowering collectively agreed wages or losing jobs. Because the decisive levers are different. I expect a convincing integration of strategically important sectors. Finally, we must continually activate these central levers to take advantage of the long-term opportunities for improvement inherent in our company. In this context, it is also important that the workforce is well informed and involved throughout the process.
Source: HD Motori
Ashley Fitzgerald is an accomplished journalist in the field of technology. She currently works as a writer at 24 news breaker. With a deep understanding of the latest technology developments, Ashley’s writing provides readers with insightful analysis and unique perspectives on the industry.