Photo: Volkswagen
With the European ban on combustion engines fast approaching, many automotive manufacturers are making swift changes in their production lines to stay afloat. German’s Volkswagen Group plans to scrap dozens of ICE models to focus on developing more profitable premium vehicles, Financial Times reported.
VW Group’s finance chief, Arno Antlitz, told F.T. reporters that the automaker’s key target isn’t growth. They are not keen on volume or market share but more focused on quality and margins.
He added that Volkswagen would reduce its range of petrol and diesel cars (at least 100 models) spread over several brands by 60% in Europe in the next eight years.
Unlike the Japanese brand Toyota which depends on selling more units for profit, V.W.’s new strategy departs from sales practices witnessed in the wider automotive industry.
Over the last two years, the auto industry has experienced a roller-coaster of events, including the industry-wide chip crisis and the global pandemic that forced automakers to cut production as demand surged.
These events forced European automakers such as BMW and Mercedes to inflate the prices of their models, making record sales profits in 2021 despite selling fewer units.
Similarly, VW Group prioritized premium vehicles in their Audi and Porsche brands, that later accounted for a bulk of conglomerates profits. According to Financial Times, executives under Volkswagen Group brands stress that this practice will persist even after supply chain issues ease.
Previously, under the leadership of former Chief Executive, VW Group worked to beat Toyota and GM as “volume number one."
Last week, the German automaker delayed the launch of the VW ID.5 to the first week of May due to disruptions caused by the ongoing war between Ukraine and Russia. The interruption of the supply of wire harnesses from Ukraine made the company unable to supply enough exhibition models for their sales partners and dealers.
He added that Volkswagen would reduce its range of petrol and diesel cars (at least 100 models) spread over several brands by 60% in Europe in the next eight years.
Unlike the Japanese brand Toyota which depends on selling more units for profit, V.W.’s new strategy departs from sales practices witnessed in the wider automotive industry.
Over the last two years, the auto industry has experienced a roller-coaster of events, including the industry-wide chip crisis and the global pandemic that forced automakers to cut production as demand surged.
These events forced European automakers such as BMW and Mercedes to inflate the prices of their models, making record sales profits in 2021 despite selling fewer units.
Similarly, VW Group prioritized premium vehicles in their Audi and Porsche brands, that later accounted for a bulk of conglomerates profits. According to Financial Times, executives under Volkswagen Group brands stress that this practice will persist even after supply chain issues ease.
Previously, under the leadership of former Chief Executive, VW Group worked to beat Toyota and GM as “volume number one."
Last week, the German automaker delayed the launch of the VW ID.5 to the first week of May due to disruptions caused by the ongoing war between Ukraine and Russia. The interruption of the supply of wire harnesses from Ukraine made the company unable to supply enough exhibition models for their sales partners and dealers.
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