According to a report coming from the German weekly Wirtschaftswoche, the second-largest global automaker – Volkswagen AG – is currently on track to secure its estimated threshold for pretax profit of 8 % of sales by 2018.
The carmaker recently unveiled a huge $106 billion investment plan to be set in motion during the next five years, while other sources reported to Reuters that the company is also vying for the increase in cost cuts to $12 billion – up form the already proposed 5 billion euros. Now, as the automaker is thoroughly lowering the costs and overhauling its development and production processes, Volkswagen is on target to secure its earnings goal for 2018, said people from within the company. The sources explained that during a group’s supervisory meeting on Friday the margin target was discussed and the conclusion was that it remained achievable.
The Volkswagen Group, which quickly emerged from being just the largest carmaker in Europe to a global contender that took the second spot behind Japan’s Toyota last year, is aiming to close the profitability gap between the company and some rivals. While brands such as the luxurious Audi or Porsche bring home hefty profits, the core passenger car brand still struggles with margins that are way lower than Toyota’s for example.