Wolfsburg (dpa) – Volkswagen does not want to be sidetracked by the Corona crisis and is sticking to its most important financial goals until 2025.
After the planning round for the next five years, the world’s largest automaker will maintain its business strategy despite the pandemic, as top management emphasized on Monday.
“I am optimistic that we will close this year correctly,” VW boss Herbert Diess said in a conference call with analysts. “So we should be back at pre-crisis levels by 2022.” 2021 will be a “transition year” with a clear recovery in deliveries and sales compared to the current year, CFO Frank Witter said. The fallout from the virus crisis continued to challenge the entire industry. “But we are not going to fall off the cliff.”
Specifically, VW expects a share of operating profit on sales of 7 to 8 percent in 2025, if special factors are taken into account. At an intermediate step in 2022, it should be 6 to 7 percent, according to Witter. Before the Corona crisis, VW had already promised 6.5 to 7.5 percent for the current year. Because investments in new technologies should not be neglected, the research expense ratio will be higher by 2022 than previously planned. VW will have to struggle with significantly lower sales in the coming years than it intended in the last five-year plan, Witter said.
On Friday, the group decided on their updated expense allocation. In the face of economic uncertainty, total investments will stagnate at around 150 billion euros until 2025, but there are further increases in shares for alternative and digital units. Diess said Monday that in the next round of planning, combustion engine production will focus even more on individual locations. In 2023, for example, the Passat will migrate from Emden to Bratislava. All Golf models are manufactured in Wolfsburg.
It will be very difficult for the group this year when it comes to meeting the EU’s stricter CO2 targets. “It’s going to be difficult,” Diess said. “We will probably miss the mark, but we are very close. It should be easier next year. “VW is expanding the share of electric cars; in 2021 it is expected to increase from 6 to 8 percent of sales. If the EU’s” Green Deal “comes with even more climate requirements strict, “re-planning” will be necessary for the next round.In principle, however, the group supports the CO2 targets.
“We are also making progress on the software side,” Diess said. About half of the investments go to further development of technologies for autonomous driving. “Certain acquisitions” are in the works, but the group is primarily aiming for more value creation from IT, its own software and a car operating system.
According to Witter, the pressure to save remains high in the group: “We are determined to sharpen the pencil in all areas of business.” VW is cutting jobs in traditional areas, while sectors of the future are getting more staff. Above all, fixed costs are currently “not competitive,” Witter admitted. Therefore, the group wants to cut even more equipment variants for individual models.