WOLFSBURG, Germany: Volkswagen’s core brand aims to raise its profit margin faster than previously planned despite rising investments in the development of electric vehicles, the carmaker said on Thursday.
The Volkswagen brand now aims to raise its profit margin to at least six percent in 2022, three years earlier than initially forecast. Most recently, the margin stood at 4 percent.
Volkswagen had previously said it seeks to achieve an operating return on sales of at least 6 percent by 2025.
Volkswagen’s core brand aims to invest more than 11 billion euros (US$12.5 billion) in e-mobility, digitalization, autonomous driving and mobility services by 2023, with the bulk earmarked for the electrification of its cars, the carmaker said.
To shoulder the investments, Volkswagen aims for bigger cost cuts than previously planned, with the productivity of its plants to rise by about 30 percent by 2025.
The group did not reveal details about whether jobs would be affected but has ruled out forced redundancies.
Shares in the group were down 1.7 percent at 0929 GMT, in line with declining European car stocks , hit by worries over a fresh build-up in the Sino-U.S. trade war after the arrest of a Huawei top executive.
(US$1 = 0.8821 euros)
(Reporting by Jan Schwartz; Writing by Christoph Steitz; Editing by Thomas Seythal)