VW’s long-term strategy calls for 30 new EVs

VW CEO Matthias Mueller: “We expect that by (2025) we will be selling about 2 to 3 million pure-electric automobiles a year.” Photo credit: Reuters

WOLFSBURG, Germany — Volkswagen Group plans to introduce more than 30 electric vehicles by 2025, accounting for up to one-quarter of its unit sales, as it recasts itself to emerge from the diesel emissions-cheating scandal.

The automaker will transform its core business and realign its components production as part of a sweeping strategy review, the company said today at a press briefing at its Autostadt exhibition center in Wolfsburg.

“We expect that by (2025) we will be selling about 2 to 3 million pure-electric automobiles a year,” VW Group CEO Matthias Mueller said.

VW said it planned to bundle its components business, currently spread across 26 plants worldwide with 67,000 employees. The relevant activities are to be systematically combined across all brands and strategically realigned, the company said.

The realignment will give the components business greater entrepreneurial freedom, Mueller said. “We anticipate that this will improve transparency while boosting internal competition. It will also contribute substantially to future topics such as electro-mobility,” he said.

It also said it aimed to reduce its sales and administration costs to less than 12 percent of sales.

Mueller said the new goals will make the company “more focused, efficient, innovative, customer-driven and sustainable.”

Spurred by the biggest crisis in its history, Volkswagen is accelerating efforts to adapt to the industry’s shift toward self-driving electric cars. \

Mobility investments

Volkswagen plans to establish a mobility solutions business that will develop its own services as well as acquiring businesses in areas such as ride-hailing, robo-taxis and car-sharing. The goal is to generate billions of euros in revenue from the efforts by 2025, the carmaker said. A $300 million investment last month in ride-hailing app Gett was Volkswagen’s first foothold in the burgeoning field.

VW’s hires including strategy chief Thomas Sedran, a long-time AlixPartners and Roland Berger consultant, and digital head Johann Jungwirth, formerly with Apple Inc., are key to the automaker’s revamp. Herbert Diess, who joined from BMW AG a few months before the cheating became public, is in charge of the critical effort to lift profitability at Volkswagen’s struggling namesake brand, its largest unit.

Cumulative investment in new autonomous mobility solutions will amount to several billion euros, Mueller said. “We will develop the necessary expertise and are planning to hire around 1,000 additional software specialists, among other measures,” he said.

Volkswagen is targeting an operating return on sales of 7 percent to 8 percent by 2025, up from 6 percent before special items last year.

Playing a leading role in the automotive industry “will require us — following the serious setback as a result of the diesel issue — to learn from mistakes made,”  Mueller said in his first major strategy presentation since taking charge after Volkswagen admitted last September to cheating on U.S. emissions tests.

The emissions scandal has so far cost the company 16.2 billion euros ($18.2 billion) and highlighted the risks of its rigid structure and focus on expansion, which caused it to largely miss the trends that led to the emergence of the likes of Tesla Motors and ride-sharing service Uber Technologies.

Volkswagen said it will present detailed steps to implement the strategy, broken down for its 12 brands and including financial targets, by the end of this year.

Find original: http://www.autonews.com/article/20160616/COPY01/306169957/vws-long-term-strategy-calls-for-30-new-evs-components-realignment

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