Mubasher: Volkswagen on Thursday said it would slash another EUR 3 billion ($3.4 billion) in costs in a bid to boost profit margins at its core brand.
“By 2020 we will achieve three billion euros in cost savings, and now aim for a further three billion euros by 2023,” Volkswagen’s board member responsible for finance at its core brand Arno Antlitz said in a press conference in Wolfsburg, Germany.
The company said it aimed to reduce administrative expenses, while working to ramp up the productivity of its factories by around 30% by 2025.
The cost savings are expected to help the brand reach a profit margin of at least 6% by 2022, Antlitz added.
As it is struggling to recover from a scandal over emission test cheating in 2015, the auto giant has been cutting costs to support an ambitious shift to electric vehicles and self-driving cars.
One of the carmaker’s key targets is to boost margins at its mass-market brand Volkswagen, the largest unit by sales, which has for long lagged the profitability of competitors such as Toyota, partially owing to high labour costs at its German factories.
Moreover, the Volkswagen brand aims to invest over EUR 11 billion in electric vehicles, self-driving cars, mobility services and digitalisation.