In the past few months, Volkswagen has been grabbing headlines with its cost-cutting measures across its core brand. On Thursday, the German brand announced another $3.4 billion of cost cuts in an effort to speed up an improvement in profit margins.
VW which has been facing ripples of the infamous Dieselgate scandal since it was uncovered in 2015 has lately invested an ambitious amount of money towards electric cars and automated driving.
Reports suggest that the company’s key goal is to improve margins at its mass-market VW brand which currently accounts for its largest division by sales. The same division has been lagging in the profitability behind rivals such as Toyota due in part of high labour costs at its German plants.
“By 2020 we will achieve 3 billion ($3.4 billion) euros in cost savings, and now aim for a further 3 billion euros by 2023,” Arno Antlitz, the board member responsible for finance at the VW brand, told a press conference in Wolfsburg, Germany.
The German auto giant is aiming to reduce administrative expenses and achieve a ‘massive reduction’ of complexity in the brand’s model lineup even while adding a new portfolio of electric vehicles, Automotive News reported.
The brand has also planned to invest more than $12 billion in electric vehicles, digitization as well as autonomous driving and mobility services by 2023.