Volkswagen CEO, Martin Winkerton, has said according to a source that the carmaker is on the right track to reach its goal of cutting costs at its core division by nothing less than €5 billion by 2017.
Winkerton, representing the Europe’s largest carmaker, stated this summer that costs needed to be cut at the passenger-car brand which is Volkswagen’s largest division in terms of deliveries and revenue. The cost-cutting steps might include shutting down non-profitable models like some convertible cars and eliminating costly vehicle equipment.
While Volkswagen did not go public with their savings measures, claiming that synergies have to be raised in departments such as production, procurement and distribution, a person close to management confirmed that Winkerton stated at a Volkswagen meeting that VW will definitely meet the target of $6 billion savings by 2017.
The source who preferred to stay anonymous as they are not authorized to speak to the press, added that the improvements for VW should include cutting back on management meetings alongside other efficiencies and leaner management.
With Volkswagen meeting a long-planned sales mark of 10 million units four years early in 2014, executives are now looking into increasing profitability as to fund future expansion and development of battery-powered and hybrid powertrains.
By Gabriela Florea