Volkswagen-Boss Oliver Blume (55) trusts the car manufacturer despite problems with the software subsidiary Cariad
and the Core brand VW
significant profit growth. In order to cover the costs of the multi-billion investment program up to 2027, the return on Europe’s largest carmaker should climb up to 10 percent, according to the presentation for the capital market on Wednesday. By the end of the decade, the range was raised to nine to eleven percent. Last year, the adjusted return was 8.1 percent.
According to the will of the Wolfsburg group, sales should increase by 5 to 7 percent every year until 2027. Especially in China and North America Volkswagen wants to grow. In China, the group had lost significant market shares in recent years.
For the first time, the brand groups received their own return targets in order to raise the group as a whole to a higher level, explained CEO Oliver Blume and CFO Arno Antlitz (53) during a conference call with journalists in the run-up to the analysts’ meeting. “It’s like the gym,” said Blume. Every brand trains and the fitter they get, the better the group gets.
Clear return targets for individual brand groups for the first time
The troubled software subsidiary Cariad, whose management has just been renewed, is getting its own fitness program. Brand boss Thomas Schäfer (53) already has a program for increasing efficiency in VW Volume of ten billion euros announcedto achieve a return of 6.5 percent by 2026. In 2022, the group’s core brand achieved 3.6 percent.
Audi, which leads the premium group renamed “Progressive” with luxury car makers Bentley, Lamborghini and motorcycle manufacturer Ducati, is expected to increase returns to 14 percent. Previously, the target was nine to eleven percent. The listed sports car manufacturer Porsche intends to achieve more than 20 (18.6) percent in the next few years. The “Trucks” group, known as Traton with brands such as Scania, MAN, Navistar and the South American business, is said to achieve nine percent.
CEO Blume, who is also in personal union Porsche leads, emphasized that savings are not the focus of the restructuring, but rather that efficiency will be increased and synergies between the brands will be better used. However, as Antlitz conceded, Volkswagen will not be able to do without reducing labor costs. The measures would still be developed by the brands.
As Volkswagen further announced, it intends to noticeably reduce expenditure on capital expenditure and research and development in the coming years. The investment ratio is to drop to below 11 percent of sales by 2027. For this year, the Wolfsburg have planned a share of 14.5 percent of the proceeds for capital expenditure.
Blume also announced an independent investigation of the plant in Xinjiang, China, later this year. About this one is in exchange with partner SAIC.