Volkswagen lays the foundations for success in 2021
Cost and investment discipline cushions effects of coronavirus pandemic
In order to counteract the negative effects of the coronavirus pandemic, Volkswagen last year implemented a large number of additional cost-reducing measures. The company achieved a year-on-year reduction in fixed costs of around EUR 1 billion. Particularly in the third and especially in the fourth quarter, the strict cost management took full effect. In addition, by strictly aligning production with customer demand, it was possible to reduce net inventories by 10 percent compared with the prior year.
Accelerated digitalization: initial milestones with subscription models and online purchasing
With its new ACCELERATE strategy, Volkswagen will achieve important milestones in digital sales and the development of data-based business models in addition to the faster ramp-up of e-mobility in 2021.
This summer, Volkswagen will be piloting a subscription model for the ID.3 in six German cities. A key prerequisite for the success of the additional digital functions is that Volkswagen will become the only volume manufacturer to provide over-the-air updates for the ID.3 and ID.4 every 12 weeks, also starting in the summer.
Volkswagen accelerates its electric campaign
Before the end of March, the first ID.4 vehicles will be delivered to customers in many European markets. This year, too, Volkswagen will add the four-wheel drive ID.4 GTX, the ID.5 coupé and the ID.6 X/CROZZ for the Chinese market.
With the additional models, the company is now rapidly increasing volumes of electric vehicles and scaling up MEB use around the world. Volkswagen is planning to deliver a total of some 300,000 fully electric vehicles to customers this year as well as around 150,000 hybrids.
Outlook for 2021: Return to a profitable growth path
Building on the successes achieved in the past fiscal year, the aim is to realize a 5 percent reduction in fixed costs by 2023. Other goals are to increase factory productivity by 5 percent each year, reduce material costs by 7 percent and sustainably improve profitability in the regions.
Volkswagen expects a sharp rise in deliveries in the coming year and is also aiming for a significant year-on-year increase in sales revenue. In terms of operating return on sales, Volkswagen is looking at a target corridor of 3 to 4 percent in 2021. Alexander Seitz: “Despite the setbacks caused by the coronavirus pandemic, we will continue to work consistently on achieving our margin target of 6 percent in 2023.”
Mar 21, 2021 at 23:26