Volkswagen has struggled to raise profitability at the VW brand for years. Last year, the brand’s operating margin fell to 3.8 per cent, lagging peers such as Peugeot which delivered a margin of 8.4 per cent.Volkswagen has ruled out compulsory layoffs until 2025, but early retirement of staff working in administrative positions at the company’s headquarters in Wolfsburg, Germany, will help reduce the work force by 5,000 to 7,000, it said.
The new cost cutting drive is a continuation of Volkswagen’s 3 billion euros Zukunftspakt savings plan. So far, VW has realized around 2.4 billion euros of the planned 3 billion annual cost savings by 2020.At the same time, VW will create 2,000 new software jobs, as well as electronics positions in technical development, it said.
The company plans to become the world’s biggest producer of electric cars by 2025, with the VW brand alone aiming to build more than 20 models on the group’s electric vehicles platform. The first electric car on the platform – the “ID” – will hit showrooms in 2020 and VW expects the launch edition to sell out, VW’s board member for sales Juergen Stackmann said. VW declined to say how many cars would be produced for the launch edition.VW will start building the ID at a factory in Zwickau, Germany, which has maximum annual production capacity of 330,000 models. Zwickau will also build electric cars for Volkswagen’s Seat and Audi brands.
After Zwickau, Volkswagen will roll out production of electric vehicles to seven other factories worldwide including two plants in China and a factory in Chattanooga, United States, VW said.
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