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VW keeps investments stable despite Corona | Free Press

Wolfsburg (dpa) – Despite the high level of uncertainty caused by the Corona crisis, the Volkswagen Group wants to keep its investments stable for the next five years.

At the same time, the world’s largest automaker is investing nearly half of its total planned spending of around € 150 billion through 2025 inclusive on future technologies like alternative drives and digitization. Significantly more funds are flowing into the particular software.

As the company announced on Friday after a five-year planning supervisory board meeting in Wolfsburg, a total of € 73 billion is forecast for the expansion of electromobility, hybrid technology and digital. That is significantly more than in the last five-year plan with around 60 billion euros for these areas.

Above all, CEO Herbert Diess is now spending more money on software and networking development. At 27 billion euros, the amount will be roughly double. Diess has already emphasized several times that, after the switch to electric drives, networking and software control are top priorities.

“In the coming years it will also be important to assume a leadership position in vehicle software,” he said. For e-drives, the VW Group estimates 35 billion euros, around 2 billion euros more than in the last plan at the end of 2019.

The total amount (150,000 million euros) remains practically unchanged compared to the previous year, although the outlook for the automotive industry is anything but certain due to the economic crisis induced by the pandemic and radical changes in the technologies of propulsion. On Monday, VW wants to explain its financial outlook to investors and analysts, then it should also show when VW expects the situation to normalize again. Until now, Diess had always made it clear that the crisis will affect business at least until 2022.

The group sees its investment planning assuming “moderate growth” in the world economy and major markets over the next five years – “with regional differences.” In addition, further processes will be optimized in the VW Group and less popular models will be eliminated. Chinese joint ventures are not yet included in the expense calculations.

With the new five-year plan, VW is also redistributing money and models to plants. As expected, production of the mid-range Passat model will go to Bratislava in Slovakia from 2023. The Passat will be produced there together with the Superb family of the Czech subsidiary Skoda, which should save costs. Passat’s traditional Emden site is getting another all-electric model with the four-door Aero after the ID.4. Among other things, Volkswagen is investing one billion euros in the plant on the North Sea coast for this purpose.

VW’s German locations will receive around € 20 billion over the next five years, and several new models will be launched in their home country. According to the works council, more than three billion euros are flowing to the main plant in Wolfsburg alone. A successor to the small Tiguan SUV and a new large SUV similar to the Tayron model made in China will be located here. VW is also gathering all variants of the flagship Golf model at headquarters.

For the Saxon locations in Zwickau, Dresden and Chemnitz, 1.2 billion euros are earmarked. The Hannover location, where the smallest VW commercial vehicles are located, becomes a multi-brand plant. In Hannover, around 680 million euros have been reserved for the production of a new luxury electric vehicle (D-SUV) in three different variants for other brands in the group. The van subsidiary VWN receives a total of almost 4.5 billion euros, also for other locations.