Advertising
For help, call:
Volkswagen is convinced that the long term will be electric and faces “major challenges” amid cost-cutting and gloomy sales prospects.
The automaker plans to give consumers plenty of shiny new cars to play with this year, as it continues its big restructuring plan, with more than 30 new models set to launch in 2024.
“We are anticipating many highlights that we hope will position us as a pioneer in the line of competitors,” Volkswagen CEO Oliver Blume said on Wednesday of VW’s plan to launch a series of new models across all its brands.
The organization plans to launch a combination of automobiles, internal combustion engine (ICE) and hybrid cars this year.
Volkswagen is taking a longer-term view on electric vehicles, saying it plans to cater to other visitor needs, a softening of the automaker’s language that in the past pointed to an ambitious adoption of electric vehicles.
But the organization remains committed to its pivot to electric vehicles, despite its competitors’ apocalyptic predictions and recalibrated production plans.
In a media call for its Investor Day, Volkswagen’s Chief Financial Officer and Chief Operating Officer Arno Antlitz said: “We are well aware that the existing public debate is critical in terms of electric mobility.
“But we are convinced that the long term will be electric. “
Shares of the automaker plunged more than 7% after the release of its annual monetary figures on March 1, but recovered in the following weeks to approach February levels.
Volkswagen’s earnings have been marred by a gloomy economic outlook, where the company said it expects sales growth of two-thirds, to 5%, in 2024 after reaping the benefits of the big expansion of its electric vehicle unit.
The organization plans to set aside money this year for battery-related acquisitions.
In retrospect, it’s miraculous that Volkswagen managed to achieve double-digit sales expansion last year, given the grim signs coming from one of Europe’s largest companies.
In the press release on the March results, Blume stated, “Despite the gloomy economic outlook and intense competition, we are confident in ourselves for 2024. “
During his media call, Blume said the automaker is targeting the U. S. , China and Mexico markets to drive growth, hoping this year’s new models will appeal to drivers in the coming years.
He added that Volkswagen has “tidied up its space” with its operational tweaks and is moving toward expansion with its new models.
The EV sector is grappling with excess demand, hitting the once-rampant industry like a ton of bricks as automakers grapple with skyrocketing stock as expected.
Higher interest rates, falling fuel costs, and the scramble to convert classic ICE drivers have affected production plans for brands like Aston Martin and Mercedes.
A number of automakers have been seduced by government subsidies that have yet to translate into customer adoption.
Volkswagen, which also owns Porsche and Audi, was an early acolyte of the EV craze and hasn’t been immune to those trade hurdles.
The German automaker was also hit by falling demand in its largest market, China, which has been hit by a financial crisis, a prolonged exit from COVID-19 and the growth of its ultra-cheap local rival BYD.
The automaker cut 300 jobs at its plant in Zwickau, Germany, last October, while 2,000 temporary employees were deemed unsafe.
Volkswagen’s first investments in electric vehicles, sparked by the Dieselgate scandal in 2015, went smoothly.
Slow and flawed software has left it on the back burner in China, and it hasn’t been adopted by EV enthusiasts in the same way it has been by stalwarts like Tesla.
Volkswagen agreed in December to a 10 billion euro ($11 billion) cost-cutting plan to help buck the trend. The plan alleviates up to one-fifth of labor costs.
The automaker’s head of logo, Thomas Schaefer, explained Volkswagen’s current competitive situation to the workers.
“We’re not making enough profit from our cars to fund the transformation and our long-term with our own resources,” Schaefer said on the company’s intranet last November, Bloomberg reported.
“Other brands would make factories in such a situation. “
This story appears in Fortune. com
Advertising
Advertising
Advertising
Advertising
Advertising
Advertising
Advertising
Advertising
Advertising
Advertising