INTERNATIONAL – Volkswagen announced another €3 billion (R47bn) of cost cuts on Thursday in an effort to speed up an improvement in profit margins at its core VW brand.
Still battling to recover from a 2015 scandal over emissions test cheating, the German carmaker has been cutting costs to fund an ambitious shift to electric cars and automated driving.
A key goal is to improve margins at its mass-market VW brand, its largest division by sales, but which has long lagged the profitability of rivals such as Japan’s Toyota due in part to high labour costs at its German plants.
“By 2020 we will achieve three billion euros in cost savings, and now aim for a further three billion euros by 2023,” Arno Antlitz, the board member responsible for finance at the VW brand, told a press conference in Wolfsburg, Germany.
That should help the brand reach a profit margin of at least 6 percent by 2022, three years earlier than previously planned, the company added.