In its pursuit to cut production costs, Europe’s biggest automaker will give up on making more than 40 models in the coming years, report says.
Part of its newly announced “Strategy 2025”, Volkswagen said last week that the “Group’s current product portfolio of around 340 different model variants will be systematically geared to profitable growth.” And now we know what that actually means, thanks to a report from the German newspaper Handelsblatt. Citing company sources, the publication said the plan was to gradually phase out more than 40 models as the company looks to streamline its production expenses. However, a Volkswagen spokesman told Reuters that the number of models that would be cut had not yet been decided.
Such a decision was expected, considering the fact that Volkswagen set a target of investing billions of dollars into launching more than 30 purely battery-powered electric vehicles over the next ten years, estimating that such green models could then account for around a quarter of the Group’s global passenger car sales. As it was faced with its biggest ever operating loss last year, the company also considers for dividends to be cut, a decision that it is expected to be discussed at this week’s annual shareholders meeting.
Even if the German carmaker said it set aside 16.2 billion euros (18.2 billion dollars) to cover the costs of the scandal worldwide, it is still hard to quantify the overall expenses at this moment, given the fact it did not yet reach a final diesel emissions settlement in the United States with regulators and affected owners of the 480,000 over-polluting cars.