WolfsburgFor Ralf Brandstätter it is the first big appearance at home in Wolfsburg. Since August, the 50-year-old has headed the car brand as Chief Operating Officer (COO) Volkswagen, the most important part of the eponymous group with 80 billion euros annual turnover and with more than six million vehicles produced each year.
In the first months as Volkswagen-COO has held back Brandstätter with big announcements in public. But this Thursday, he is kicking off with a message on the stage of the Wolfsburg brand high-rise, which has it all: the car brand Volkswagen, once the big problem in the entire group, will push forward its return targets by three years,
An operating margin of six percent should not be reached until 2025, but already in 2022. Currently, the VW cars are still slightly below four percent. Brandstätter essentially confirmed this a preliminary report of the Handelsblatt from the previous day, “We have to increase our pace of transformation,” said Brandstätter at a press conference in Wolfsburg.
Terms such as savings and efficiency package are used with reluctance in the company. Brandstätter therefore preferred to speak of a “package of measures for more productivity and efficiency” with which the Volkswagen brand is to achieve its profitability target ahead of time. The “package of measures” has a volume of about six billion euros annually. About half of this is to be brought in through cost reductions, the second half above all through more revenue in vehicle sales.
Current club events
With the introduction of the new battery-powered passenger car generation of At the end of 2019, sales at Volkswagen will also be completely digitized, This creates new business models, such as the sale of software updates. VW COO Brandstätter justified the additional return efforts above all with the high investment requirement through electrification and digitization: “We must further improve our performance in order to invest faster and more strongly.”
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Another starting point is the variety of models in which Volkswagen customers have to be prepared for limitations. Model variations that the brand sells badly are to be deleted. “We will take 25 percent of the engine / transmission variants in Europe out of the program next year,” announced Brandstätter. For example, it would not be worthwhile to offer four-wheel drive for smaller entry-level models.
With the return target of six percent, Volkswagen does not want to be satisfied in the longer term. “Of course, our ambition is that it will continue,” added CFO Arno Antlitz. In the distant future, the brand could aim for a return of eight percent. This rate is at the French Opel-Mother PSA meanwhile standard.
Trading dispute weighs on the share
To the extent of the job cuts, which is connected with the new austerity program, Antlitz did not want to comment. The negotiations with the works council about it had only begun. Especially in the administration wants to save Volkswagen. The company speculates that several thousand jobs will be canceled there. Antlitz assured that this would be socially acceptable, for example through partial retirement programs.
On the stock exchange, the return efforts of the Volkswagen brand did not lead to the expected reaction. In the afternoon, the VW share was almost three percent in the minus. This was less due to the news from Wolfsburg. The Volkswagen papers strained like other car titles rekindled Fears of a tightening of the US trade dispute.
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Nonetheless, the announcements made by Volkswagen met with approval among investors. “What was presented today in Wolfsburg is impressive,” said Arndt Ellinghorst of investment firm Evercore ISI. While other companies in the industry set their return targets down, Volkswagen is continuing to move up. The Wolfsburg could, however, proceed even more vigorously: From Ellinghorst’s point of view, it would be possible to achieve the return target of six percent by 2020.
Brandstätter also does not believe that Volkswagen will introduce the end of the combustion engine in 2026. “Today no one can definitively predict such an appointment,” emphasized the brand COO, thereby contradicting his own brand strategist Michael Jost, who had made corresponding remarks at the Handelsblatt Auto Summit on Tuesday.
Brandstätter warned against possible delays in the construction of sufficient charging infrastructure for electric vehicles. For that reason alone today nobody should commit to a fixed date for the end of the combustion technology. Brandstätter: “The customer finally decides on this question.”