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Zawya
13-03-2025
- Automotive
- Zawya
Volkswagen's volume brands operating result down 4.3% amid cost-cutting drive
Volkswagen's core brands, including VW Passenger Cars, Skoda, SEAT/CUPRA and Commercial Vehicles, reported a 4.3% drop in their operating results on Thursday as the carmaker undergoes a restructuring to cut costs. Its passenger cars brand saw a 27% fall in its operating result, with an operating margin of 2.9%. Still, Czech-based Skoda saw its best ever financial year with an operating margin of 8.3% and its operating result up 30%. The cost of new models, upfront costs of reducing personnel in administration and purchase incentives it granted at the start of the year to boost EV sales all dented profitability, the carmaker said. "Costs for necessary restructuring measures had a significant impact on our year marked a turning point for us," David Powels, finance chief for the group of brands, said in a statement. The Volkswagen Group, which also includes brands like Audi, Porsche and Bentley, reported earlier this week that its operating margin hit 5.9% in 2024 and would at best increase slightly this year given trade tensions and high costs. (Reporting by Victoria Waldersee, Editing by Rachel More)
Reuters
13-03-2025
- Automotive
- Reuters
Volkswagen's volume brands operating result down 4.3% amid cost-cutting drive
BERLIN, March 13 (Reuters) - Volkswagen's core brands, including VW Passenger Cars, Skoda, SEAT/CUPRA and Commercial Vehicles, reported a 4.3% drop in their operating results on Thursday as the carmaker undergoes a restructuring to cut costs. Its passenger cars brand saw a 27% fall in its operating result, with an operating margin of 2.9%. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. Still, Czech-based Skoda saw its best ever financial year with an operating margin of 8.3% and its operating result up 30%. The cost of new models, upfront costs of reducing personnel in administration and purchase incentives it granted at the start of the year to boost EV sales all dented profitability, the carmaker said. "Costs for necessary restructuring measures had a significant impact on our year marked a turning point for us," David Powels, finance chief for the group of brands, said in a statement. The Volkswagen Group, which also includes brands like Audi, Porsche and Bentley, reported earlier this week that its operating margin hit 5.9% in 2024 and would at best increase slightly this year given trade tensions and high costs.
Yahoo
16-02-2025
- Automotive
- Yahoo
Volkswagen's manufacturing facilities prepare for production cuts
If you've even glanced at automotive news in the past year, odds are you already know Volkswagen narrowly avoided plant closures late last year. At the final hour, the union and works council reached a compromise with Volkswagen to avoid plant closures and mass layoffs. Now, part of that compromise is about to come into effect, and VW's manufacturing facilities are preparing for production to the Financial Times, Volkswagen's production is set to be slashed as a part of the compromise that also prevented layoffs and facility closures until 2030. VW plans to halve its production capacity following a statement by Arno Antlitz, CFO of VW Group, that the company would only invest in competitive plants and that German facilities are fair game. With production capacity getting cut in half, plants like Zwickau, Volkswagen's first all-electric facility, will soon have to compete with other factories. Some facilities, including Zwickau and Dresden, will need to cut costs by 20% to keep production lines open. Overall, Volkswagen will cut its production from 1.5 million units to just 750,000. Last year, VW's German plants produced around 900,000 vehicles. Such a dramatic cut is a clear sign that VW doesn't expect its European sales to grow, especially with Chinese competitors breaking into the market. '...we have a market that is no longer growing and probably, in the future, will stagnate,' David Powels, Volkswagen CFO, told the Financial plans to keep its facilities open and workers employed until 2030, but the German automaker still plans to cut 35,000 jobs via early retirement and voluntary redundancy. Even so, VW's production will certainly experience a dramatic change over the next five years. Wolfsburg will take over the ID line's production from Zwickau in 2027. As a result, Zwickau will only produce the Audi Q4 e-tron, but there's still a future for the all-electric facility. Volkswagen has promised to repurpose the Zwickau plant for a future in car recycling, which will save roughly 1,000 jobs. The future for VW's Dresden facility is uncertain but not as bleak as it could be. Car production will come to a halt after 2025. Likewise, the Osnabrück factory will cease production after 2027. Notably, Volkswagen has stated they plan to find an alternative use for both facilities, but what that use could be is up in the production capacity getting slashed in half, Volkswagen is looking for ways to make up for declining sales in Europe. As a result, Volkswagen's executives haven't ruled out partnering with emerging Chinese EV manufacturers to fill their production lines. Powels, VW's CFO, has stated that they're keeping all of their options open. With Chinese automakers like BYD racing ahead of legacy automakers when it comes to EVs, a partnership to keep production lines open could benefit both sides. Last year, Volkswagen AG saw its European sales drop by two million vehicles compared to five years ago. Up until last year, China had been Volkswagen's most profitable market, but rapid growth by Chinese manufacturers has put the German manufacturer between a rock and a hard place. Barring a turnaround in sales, it seems Volkswagen may be fading into the background as new automotive companies take the lead. While tariffs will prevent Chinese automakers from breaking ground in some countries, the fact of the matter is that China itself is crucial for success on a global scale. If legacy automakers fail to keep pace, they may find themselves quickly overcome by up-and-coming foreign manufacturers. Love reading Autoblog? Sign up for our weekly newsletter to get exclusive articles, insider insights, and the latest updates delivered right to your inbox. Click here to sign up now!
Yahoo
27-01-2025
- Automotive
- Yahoo
VW prepared to hand its factories to Chinese electric carmakers
Volkswagen is prepared to let Chinese electric carmakers take over production lines in its struggling factories as Germany's automotive industry is struck by a downturn. Executives at the car-making titan signalled they would be open to tie-ups with Chinese rivals to use up some of the excess capacity in their factories as they scale back production. Gernot Döllner, chief executive of Volkswagen's Audi brand, told the Financial Times that deals with electric car companies would 'lower the entrance barrier of these competitors', saying: 'For sure, that is thinkable.' David Powels, chief financial officer at Volkswagen's eponymous VW brand, told the newspaper: 'We're open for any discussion on any topic with any partner. In a dynamic world, you have to keep all options open.' It comes after Volkswagen last month abandoned plans to close its German factories, bowing to pressure from unions to keep its sites open despite sliding sales. The business had argued that its factories were built to supply a European car market where it was selling 16m vehicles every year, but that there was now only demand for around 14m cars. This meant it essentially did not need two of its factories. However, it dropped plans to close the sites after agreeing a deal with unions to axe bonus payments and reduce more than 35,000 jobs by 2030. It is scaling back production in the factories rather than closing plants. At the time, Volkswagen said the deal would help it to make more than €15bn (£12.4bn) in wage savings. The signs that German carmakers are weighing up deals to use up excess space in their factories comes as they battle fierce competition from Chinese EV makers, which have been flooding Europe with cheaper vehicles. The EU brought in tariffs on imports of Chinese electric vehicles last year amid claims that Beijing was handing companies unfair subsidies which let the country's manufacturers undercut Europe's industry. However, German carmakers have been struggling to catch up with the transition to electric car manufacturing after years where China has been leading the way on innovation. The downturn in Germany's automotive industry has sparked concerns over its wider economy, given it has historically been reliant on the sector. Earlier this month, figures revealed that the economy shrank for the second year in a row in 2024. According to the German statistics office, the economy contracted by 0.2pc in 2024, following a 0.3pc dip the previous year. Timo Wollmershäuser, of the Ifo Institute in Munich, said: 'Germany is going through by far the longest phase of stagnation in post-war history. It is also falling behind considerably in an international comparison.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
