Model range streamlining, variant reduction and factory productivity increase are part of plan to boost profit margins
6 December 2018

Volkswagen has released details of a wide-reaching plan to reduce costs and improve profitability, with a focus on streamlining its model portfolio.

The plans, confirmed by chief operating officer Ralf Brandstätter at the firm's annual conference, will result in a significant reduction of the number of model variants.

“Next year, we will be discontinuing 25% of engine and gearbox variants across Europe,” Brandstätter said.

There will also be a “more intelligent” streamlining of equipment packages in cars, with a “comprehensive reduction in complexity” across the Volkswagen brand. Further targets include an average increase in plant productivity of 30% by 2025 and an optimisation of material costs. The company has also reduced its workforce by 5600 people, while a further 9300 have signed early retirement contracts. 

Volkswagen’s operating profit is down 6% in 2018 to €2.3 bilion (£2.05bn), with the blame shared between the delivery disruption caused by the new WLTP testing regime, the “lack of enthusiasm for diesel” in Europe and changes in the political framework including Brexit and the trade war between the US and China.

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The cost-saving processes were already under way in 2018, with savings of €2.2bn (£1.95bn) reported, while Volkswagens plans to have shed around €3bn (£2.67bn) from its expenditure by 2020. Those savings are said to be invested in the “electrification and digitalisation of the brand”, including everything from the expansion of the MEB electric platform to investment in charging infrastructure.

Volkswagen is targeting an operating return of 6% by 2022, three years earlier than originally planned. The expansion of the MQB platform, set to underpin 80% of the brand's global model range by 2020, will also help these goals be achieved. 

It’s not clear yet which models or trim variants will face the axe in the coming years, with the company only specifying that variants with “low customer demand” will be removed.

The Volkswagen brand alone will spend more than €11bn (£9.78bn) in future technology in the next six years, with €9bn (£8.00bn) spent on e-mobility. Throughout the Volkswagen Group, as many as 15 million MEB-based electric cars are expected to leave assembly lines as part of the first wave of electrification beginning next year.

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8

6 December 2018
So in other words were going to cut the workforce massively making people unemployed, then we expect the remaining work force to work 30% harder in the quest of more profit, and make the cars even more alike.

This cutting can be seen in new VW’s that are being released as it seems VW’s once famous interior quality is dropping in recent reviews released. Carwow have a good one of the Audi A7 with its wobbly head light control panel.

6 December 2018
Jimbbobw1977 wrote:

So in other words were going to cut the workforce massively making people unemployed, then we expect the remaining work force to work 30% harder in the quest of more profit, and make the cars even more alike. This cutting can be seen in new VW’s that are being released as it seems VW’s once famous interior quality is dropping in recent reviews released. Carwow have a good one of the Audi A7 with its wobbly head light control panel.

Exactly. I read it as decontenting, under-engineering and a downgrade in build quality if production lines are rushed.

For example, Rover enthusiasts (yes they exist, the brand has been dead for nearly 15 years, but they did make some good cars in their time) insist that the last range of cars - 25/45/75 were better before the 'Project Drive' costcutting.

Interiorwise - I noticed when the Arteon - VW's Flagship - was reviewed, the interior picture, if you replaced the clock with a hazard light button, and blanked the full length vent, you'd be hard pressed to tell the interior from a Skoda Octavia!

6 December 2018

An A7 had a wobby head light control, the shame!!!

typos1 - Just can’t respect opinion

6 December 2018
xxxx wrote:

An A7 had a wobby head light control, the shame!!!

To be fair a big expensive luxury car, especially one that is a press special, these kind of things just should not be an issue! If it occured on an A1 they might get the benefit of the doubt, but the A7 is a £45k+ car.

If it was on a French car people would be scoffing it as being flimsy.

Wobbly interior controls never inspire confidence, I'm sure the Mercedes W123 never had wobbly buttons.

6 December 2018
WallMeerkat wrote:

xxxx wrote:

An A7 had a wobby head light control, the shame!!!

To be fair a big expensive luxury car, especially one that is a press special, these kind of things just should not be an issue! If it occured on an A1 they might get the benefit of the doubt, but the A7 is a £45k+ car.

If it was on a French car people would be scoffing it as being flimsy.

Wobbly interior controls never inspire confidence, I'm sure the Mercedes W123 never had wobbly buttons.

Maybe they're scrap that particular A7 having such a big defect like that, especially one that can't be repaired!!

typos1 - Just can’t respect opinion

6 December 2018

Its quite amusing watching motoring journalists squirm as they try not to say too much about the reduction in interior trim quality in recent models such as the T-Roc, Arteon, A1 etc: One I read recently was justifying the hard plastics lower down in the Arteon, saying that you wouldn't want softer materials anyway in places where feet could scuff..... Yet other manufacturers are still criticised for the amount of harder plastics they feature, even in their cheaper models. You can't have it both ways guys.

6 December 2018

And what caused that?!

7 December 2018

Oh dear, that sounds like the introduction of cheap hard plastics will be continuing then.

I can't remember where I read it, but I'm sure I saw something about the VW Group having Grouped their Brands internally to help streamlining processes or whatever it was.  Anyway, if I remember correctly I think the Grouping was as follows:

Super Premium: -   Porsche, Lamborghini, Bentley... etc

Premium: -  Audi and Volkswagen

Volume: - Seat and Skoda

 

So apparently the VW Group are classing Volkswagen as 'Premium' vehicles in their range, yet the first vehicle launched after I saw that was the T-Roc, which has nasty, cheap hard plastics which I think every review I've read, video I've seen people have all said about the quality.  

Hmm, so apparently, making Volkswagen 'Premium' means using cheap materials and quality taking a nosedive.  As before I saw this Grouping, the new Polo was launched which has better quality plastics than the T-Roc.

So the next car Volkswagen Car to be launched is the Golf MK8 (I believe).  As a happy owner of a Golf MK7, I do hope that they don't go and mess up the MK8 with an interior that takes a nosedive in quality with cheap hard plastics.

I understand that technology will take a 'leap' forward, but don't forget about quality guys!  

 

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