These are ambitious goals that carmaker Volkswagen set itself in mid-June has decreed: Thanks to savings and efficiency, the volume brand VW should increase its profits by ten billion euros within three years and almost double the return. But as soon as the goals are public, brand boss Thomas Schäfer (53) receives the first setback: Because the e-models are selling much worse than expected, Volkswagen is temporarily reducing production at its Emden plant, according to the works council.
In the next two weeks until the factory holidays, the late shift in the production of the compact SUV ID.4 and the first models of the new electric sedan ID.7 will be canceled, confirmed works council chief Manfred Wulff in a report by the “Nordwest-Zeitung”. In addition, the three-week vacation days for employees in the E segment are to be extended by one week. And 300 of the current 1,500 temporary workers in Emden will no longer be employed from August. Overall, according to VW in Emden at the end of the year more than 8000 employees
. According to the information, the combustion engine production of the Passat, for example, is not affected by the production cuts.
Demand almost 30 percent below plan
According to the works council, the reason for the production restrictions is weakening sales of electric vehicles, which manager magazin had reported in detail. “We notice the reluctance of customers in the electrical world very vehemently,” said Wulff. The uncertainty among customers is great. The demand is almost 30 percent below the originally planned numbers.
This also explains why VW sales manager Imelda Labbé (55) only a few weeks ago in a LinkedIn post
could still advertise with significantly reduced delivery times for all ID models. The supply of semiconductors and raw materials, which has been poor for a long time, has improved in the meantime, which is why production is running smoothly again. The models are also becoming available more and more quickly because there are currently far too few buyers for them.
In view of the lack of demand, Lower Saxony’s Economics Minister Olaf Lies (56, SPD) called for new purchase incentives such as reduced VAT to be discussed. However, Lower Saxony is affected in several ways by the weak demand at VW. After all, the federal state has a stake of around 12 percent in VW.
VW brand boss Schäfer has set himself an ambitious task with the new return target of 6.5 percent. Especially since, according to Daniela Cavallo (48), head of the general works council, the savings should be achieved without cutting back on collective wages or job security. The new return targets for the core brand are part of a general overhaul of the corporate strategy by CEO Oliver Blume (55).
The planned jump in profits should help VW to finance necessary investments and secure jobs despite a difficult environment. Schäfer wants to streamline administrative processes, better utilize production capacity, streamline the model range and reduce equipment variants: “We are focusing on a few, but on Volkswagen core models. That reduces complexity and brings more results,” he explained in mid-June. Niche models like the VW Arteon should not have successors. VW is already offering 99 percent fewer variants for the ID.7 electric car than for the comparable Golf 7 combustion engine model.
The plants of VW, Skoda and Seat/Cupra should work more efficiently by producing for several brands at the same time and thus be able to react more flexibly to fluctuations in demand. Comparable models such as the VW Passat and the Skoda Superb are to be developed and built together. It was said that this alone would save 600 million euros.
However, an agreement with the works council on the new targets is still pending.