VW looks beyond scandal
FRANKFURT, Germany — Volkswagen hopes to bounce back from its crisis with a shift in focus to more battery-powered cars, digital technologies such as autonomous vehicles, and an increase in sales of SUVs in the U.S.
Herbert Diess, the head of the Volkswagen core brand, said today at a news conference that the goal of the Transform 2025 plan was “to fundamentally change Volkswagen” as it recovers from its scandal in which it rigged diesel cars to cheat on emissions tests.
The plan foresees new investments in electric-car technology and in software that would enable new ways of using and sharing cars. Diess said at group headquarters in Wolfsburg, Germany, that the company expects to sell a million electric vehicles a year by 2025.
Another element of the plan is increasing sales in the U.S. by introducing products that are more appropriate for the market, such as more SUVs.
The plan for the Volkswagen brand follows Friday’s announcement that the division would eliminate 23,000 jobs in more traditional areas in Germany and create 9,000 new ones focused on new technologies.
Diess said the company aims to raise profit margins on sales to 6 percent by 2025, from just 2 percent in 2015. Profitability at the Volkswagen brand has lagged due to its higher cost base, the result of a strong role for employee representatives. They have half the board seats, and are generally supported by the government of Lower Saxony, which holds a stake in the company. Partly as a result, Volkswagen Group makes most of its profits from its luxury brands Audi and Porsche.
