Volkswagen Acknowledges Decline in Competitiveness of its Core VW Brand
Volkswagen's core VW brand lags behind due to excessive costs and low efficiency, making it less competitive in the market
The brand chief of Volkswagen warned on Monday that the company's original brand is no longer competitive due to high costs and low productivity. Thomas Schaefer told staff during a meeting at the company's headquarters in Germany that with many of their pre-existing structures, processes, and high costs, the Volkswagen brand is no longer competitive.
Volkswagen is the owner of multiple brands, including Porsche, Audi, and its flagship brand Volkswagen, which was established in 1937. As one of the largest car manufacturers globally, the company is currently in discussions with its works council regarding a cost-reduction plan for the VW brand. This initiative is the initial phase in the company's overall efforts to increase efficiency during the shift to electric vehicles.
The company's â¬10 billion ($10.9 billion) cost-saving initiative will involve downsizing its staff, as managers informed employees on Monday. Previously, the company had announced its intention to leverage the "demographic curve" to decrease its workforce.
During Monday's meeting, board member Gunnar Kilian from the human resources department stated that this goal would be met by reaching agreements on partial or early retirement. Moreover, Kilian emphasized that the majority of the €10 billion savings target would be accomplished through methods other than reducing staff, and he mentioned that the complete plan would be defined by the end of the year.
"We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we dont need for good results," Kilian said.
