Volkswagen Sets Sights on New 2022 Growth Target as 2018 Sales Goal Nears
Volkswagen is preparing a fresh growth strategy for 2022 after global sales surged towards its 10 million vehicle target, originally set for 2018.
Volkswagen is drawing up a new growth strategy for 2022 after rapid sales gains pushed the group close to its 2018 target of 10 million annual vehicle sales, several years ahead of schedule. The company’s current expansion plan, set in 2007 under CEO Martin Winterkorn, aimed to make Volkswagen the world’s largest automaker by 2018. In 2012, global deliveries rose 11.2 percent to a record 9.1 million units, putting the 10 million target within reach as early as 2013.
Bernd Osterloh, head of Volkswagen’s works council, confirmed to reporters in Wolfsburg that the group is planning a new strategy. With the original 2018 volume goal now considered achievable well ahead of time, the company is looking to set new ambitions for the next decade. Osterloh said, “We definitely need a new (growth) strategy.”
Sales surge brings 2018 target forward
Volkswagen’s 2012 sales performance was driven by strong demand in key markets and a broad model range across its brands. The 10 million annual sales goal, once seen as a long-term ambition, now looks likely to be achieved at least five years early. This rapid progress puts Volkswagen in direct competition with Toyota and General Motors for the position of the world’s largest carmaker by volume.
The company’s global expansion has included investments in new factories, a focus on emerging markets and an expanded product line-up. Volkswagen’s growth trajectory has also influenced other manufacturers, with rivals such as Porsche announcing their own expansion plans for the same timeframe. For more on how other German brands are planning for 2018, seePorsche to create 3,000 new jobs by 2018 in global expansion push.
Executive pay under scrutiny as new plan takes shape
As Volkswagen’s board prepares the 2022 plan, executive compensation is also under review. CEO Martin Winterkorn’s pay nearly doubled in 2011 to €17.5 million, drawing criticism and making him the highest paid chief executive among Germany’s DAX-listed companies. The supervisory board is expected to decide on new guidelines to limit future increases in executive pay. Osterloh acknowledged that the debate over pay could not be ignored and said the management board recognised the need for a long-term solution.
What the new 2022 strategy could mean
While details of the 2022 growth plan have not been disclosed, the early achievement of the 2018 target suggests Volkswagen will set more ambitious goals for sales, market share and perhaps new technologies. The company’s next strategy is likely to address further expansion in Asia and North America, continued investment in product development, and a response to ongoing public and political scrutiny of executive pay. The outcome of the supervisory board’s review on compensation is expected in late February.
