According to media reports, German automaker Volkswagen Group is making efforts to cut costs. While some competitors have reduced the prices of their electric vehicles, Volkswagen will continue to maintain its vehicle pricing. The company's goal is to rejuvenate its profit margins after they were affected in the third quarter due to misjudgments about raw material prices.
On October 26th, Volkswagen Group's CFO, Arno Antlitz, stated that the company would delay a previous plan aiming to save €10 billion (equivalent to $10.6 billion) for its Volkswagen brand. However, some measures have already started being implemented.
When speaking about these plans, Antlitz said, "We will announce them as soon as we are ready. We shouldn't worry about a delay of a month or two."
Currently, Volkswagen is shifting strategies to reduce fixed costs and increase productivity. Preliminary third-quarter reports released by Volkswagen on October 27th confirmed the company's downgraded profit margins for the year, disappointing investors.
In a statement, Antlitz said, "We cannot be satisfied with the current profitability. The company's earning capability in the third quarter lags behind our goals."
Recently, Volkswagen, along with several other automakers and analysts, has warned that the demand for electric vehicles is below expectations. The company's orders for electric vehicles in Europe have dropped from 300,000 units last year to 150,000 units.
However, Antlitz pointed out that, despite this, Volkswagen's order volume in the third quarter still saw a slow increase compared to the first half of the year, with further growth expected in the upcoming months.
Antlitz also added that, in the Chinese market, the company might lose market share in electric vehicles for the next year or two until two new models developed in collaboration with XPeng are launched. During the era of internal combustion engines, Volkswagen has always held a leading position in the Chinese market.
On October 25th, General Motors and Honda announced they would terminate their collaborative plans to develop electric vehicles, and battery manufacturer LG Energy Solution also issued a warning, highlighting that high-interest rates are hampering the global transition to electric vehicles. Reduced market demand has prompted several EV manufacturers, including Tesla, to lower vehicle prices.
On October 26th, Volkswagen announced third-quarter sales of €78.8 billion, with a year-on-year operating profit increase of 14%, amounting to €4.9 billion. The company also stated it expects to deliver between 9 million to 9.5 million vehicles this year, with group sales revenue rising by 10% to 15% compared to 2022.
