Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Volkswagen looks to electric vehicles, cost cuts for profit recovery

Stock MarketsMar 16, 2021 08:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. New Volkswagen cars are seen at the Berlin Brandenburg international airport Willy Brandt (BER) in Schoenefeld 2/3

By Christoph Steitz and Jan Schwartz

FRANKFURT (Reuters) - Volkswagen (DE:VOWG_p) is confident that cost cuts will help it raise profit margins in the coming years, the world's second-largest carmaker said on Tuesday, a day after outlining an ambitious electric mobility expansion.

"Our good performance in 2020, a year dominated by crisis, will give us momentum for accelerating our transformation," Chief Executive Herbert Diess said in a statement.

Asked about the closely-watched issue of a potential listing of luxury division Porsche AG, Diess said there was no need for immediate action given Porsche's importance to the carmaker's turnaround efforts.

"That's why you need to think very very hard about every single step," he said.

Preferred shares in the company rose as much as 6.5% to their highest level since July 13, 2015, giving the carmaker a market valuation of more than 118 billion euros ($141 billion). They are up more than a third year-to-date.

Volkswagen aims to more than double deliveries of electric vehicles to 1 million this year, it said, adding it would also apply a standardised platform model introduced for vehicle production years ago to software, batteries and charging.

Diess' comments come a day after Volkswagen unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla (NASDAQ:TSLA).

Volkswagen confirmed it aimed for an operating margin of 7%-8% by 2025, adding it would likely end 2021 at the upper end of a 5%-6.5% target corridor.

Stellantis, the world's fourth-largest carmaker created through the merger of FCA and Peugeot (OTC:PUGOY) maker PSA in January, is targeting an adjusted operating profit margin of 5.5%-7.5% this year.

This will be achieved by lowering fixed costs by 2 billion euros by 2023 compared with 2020, a decline of 5%, as well as a decline of 7% in materials costs over the same period, Volkswagen said.

To get a better handle on personnel costs Volkswagen on Sunday offered early or partial retirement to older employees in a move sources said could cut up to 4,000 jobs at its plants in Germany.

The group employs about 670,000 staff globally.

"We aim to put the ambitious transformation of the Volkswagen Group on a solid financial basis," incoming finance chief Arno Antlitz said.

($1 = 0.8375 euros)

Volkswagen looks to electric vehicles, cost cuts for profit recovery
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email