Volkswagen: Stretching Out Damn Deadlines for Core Profit Margin Target by Three Years
- Volkswagen delays target for reintroducing main brand by three years
Hey there! It's the badass Volkswagen (VW) we're talking about, buddy. Yeah, those car honkers pushing back their profit margin target for their beloved core brand. The initial target of a 6.5% profit margin, originally planned for 2026, has now shifted to 2029. Guess who dropped that bomb? Their Chief Financial Officer, David Powels—while presenting the brand's 2024 financial report. He said, "It's still the target, just happenin' in 2029 now." The German newspaper, Handelsblatt, broke the news.
Why the sudden shift? Well, Powels pointed to an unwelcoming market situation, dude. He's talking about declining sales, intensified competition, especially in China, and a whole lot of changing market conditions in the US. Harsh, right? But VW has some solid footing now, thanks to recent deals with IG Metall and the works council. They dumped presents under the Christmas tree in the form of restructuring measures, securing VW's future. And get this, homie—they're full swing implementing those fuckers!
After dealing with loads of bullshit, VW and the union finally reached an agreement on a restructure program in December after enduring marathon-length talks. Look out for 35,000 job cuts in Germany by 2030. That's roughly a quarter of the positions, dudes. VW will hold off on plant closures and layoffs as part of the deal.
So, how'd they fare in 2023? Not great, mate. Their operating profit margin dropped to 2.9%, down from 4.1% in 2022. That's like 2.9 cents out of every euro they made. Although they witnessed slight boosts in sales and revenue outside China, their operating profit plummeted by over a quarter, from 3.5 to 2.6 billions of euros.
- Core brand: VW
- Volkswagen: VW
- Profit margin target
- Cost cuts
- China
- Wolfsburg
- Handelsblatt
In light of challenging market conditions, particularly in China, Volkswagen (VW) has agreed to extend its core profit margin target from 2026 to 2029, as announced by their Chief Financial Officer, David Powels. To achieve this goal, VW will implement cost-cutting measures, such as job reductions, which were agreed upon with IG Metall and the works council in December 2023. Despite these changes, VW has pledged not to initiate plant closures or layoffs as part of the restructuring program, as reported by German newspaper Handelsblatt.
