Volkswagen Group Plans Its Future

In a meeting last week, the advisory board of Volkswagen Group laid out the group’s plans from 2018 to 2022. Speaking about it, Matthias Muller, CEO of Volkswagen AG said, “We are reinventing the car. We are making targeted investments in digitalisation, autonomous driving, electric mobility and new mobility services by providing the necessary funds from our own resources. We are, however, doing so without sidelining existing technologies and vehicle projects, since this is how we will earn our money for the foreseeable future.”

By the end of 2022, the manufacturer plans to spend €34 billion for the development of electric mobility, autonomous driving, new mobility services and digitalisation. Out of the €34 billion, €14 billion will be dedicated towards Germany and will be spent on transformation of the existing production plants to suit the future needs. The key decisions regarding the workforce and plant assignment include:

• Remodelling the Zwickau facility to launch series production of electric vehicles on MEB platform with an investment of €1 billion
• By the end of 2018, production of the entire Passat family will take place at the Emden site that will receive an investment of €1.1 billion
• The production of the next generation of the entire Golf family will be carried out at the Wolfsburg plant, that will receive an investment of €2.9 billion.

Speaking on the plans, Frank Witter, CFO, Volkswagen AG said,  “Despite the major challenges, we hold firm in our commitment to significantly reduce both the capital expenditure ratio and the research and development ratio in the Automotive Division." Volkswagen expects the capital expenditure ratio and R&D ratio to go down to 6 per cent from 2020 onwards. The manufacturer also expects China, Brazil, Russia and North America to be the major growth drivers in the future. In Brazil, Volkswagen plans to launch 20 new models by 2020 with a total investment of €1.8 Billion.  

Earlier this year, Volkswagen announced its Roadmap E. Under the same, the manufacturer plans the comprehensive electrification of its lineup by making 25 per cent of its future cars battery-powered. The company is also working towards electrifying its entire model lineup by 2030. Volkswagen also plans to spend over €50 billion on battery cells and has already invited tenders for the same.