Faced with an aggressive margin squeeze, a brutal market share collapse in China, and crippling domestic overhead, Volkswagen is preparing for a radical, historical contraction.
In a recent interview with the German newspaper Bild, Volkswagen Group CEO Oliver Blume admitted that the core of VW's crisis isn't a drop-off in buyer interest, but rather a catastrophic failure in baseline operational efficiency.
"Our products are very popular—but we’re not making enough money on them," Blume told Bild. "That’s why we need to further reduce our costs—across all cost categories."
To solve this problem, Blume intends to dramatically downsize the corporate footprint. The centerpiece of this strategy is an aggressive consolidation of the group’s sprawling vehicle catalog.
Volkswagen plans to effectively halve the group's global product portfolio, slashing up to 50 percent of the model lines currently sold across its eight passenger vehicle brands: VW, Audi, Skoda, SEAT, Cupra, Porsche, Bentley, and Lamborghini.
While the official press release from Wolfsburg omitted a finalized list of model cancellations, Bild claims to have obtained an unconfirmed preliminary "death list" with specific vehicles targeted for elimination, representing an approximate $7.4 billion in savings by 2031. The list includes some big names.
The long-running Jetta sedan—a 40-year staple of the brand's global lineup and a rare survivor in a dying segment—will reportedly not live to see another generation. It is joined on the chopping block by the Taos compact crossover, a relatively fresh nameplate that apparently failed to justify its future under Blume’s margin-first mandate.
At Porsche, the executioner if coming for the slow-selling Taycan electric sedan along with the internal-combustion-powered Cayenne Coupe. Oddly, the reborn gasoline-powered 718 line is rumored for cancellation despite Porsche’s public promise less than a year ago to bring back a gas option for the Boxster and Cayman alongside the upcoming EV versions. In fact, earlier this year it looked like the EV version was the one destined to die.
The cuts at Audi will focus on trimming redundant "lifestyle" body styles. The fastback-styled Q5 Sportback and the newly minted, fully electric Q6 E-Tron Sportback are both expected to finish their current lifecycles before being forgotten.
Lastly, the budget-focused Skoda Fabia hatchback is facing total extinction as tightening European emissions regulations drive entry-level combustion car manufacturing costs into an unprofitable territory.
Worse yet, Bild claims that total job cuts could balloon far past the previously reported 50,000 figure, with internal projections pointing to as many as 120,000 layoffs—roughly one-fifth of Volkswagen's global workforce. Veto power held by labor union representatives and the local government of Lower Saxony has temporarily stalled the cuts.
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
via Autobuzz Today
Comments
Post a Comment