The weak industry situation is also in the last good running business of the world's largest car maker Volkswagen not over. The Group is becoming more cautious about the prospects for the coming year. Sales and profits will increase less than initially planned, as the management of Group CEO Herbert Diess and CFO Frank Witter admitted.
This said that there will be no major growth in the market next year. Witter said the economic conditions in the car market have changed: "The best of the party is over."
Volkswagen updates its medium-term business planning on an annual basis with the results of the five-year investment planning round; the Group had decided on the latest on Friday. The group wants to publish the regular outlook for the year 2020 with the annual report in March.
Diesel scandal has cost Volkswagen billions
In terms of sales, Volkswagen now plans to only grow by at least 20 percent in 2020 compared to 2016. At that time, VW had made a good 217 billion euros in sales, assuming the calculate Wolfsburg now with at least just under 261 billion euros in revenue next year. Previously, Volkswagen had expected a growth of at least 25 percent over the period - that would have been about 10 billion more euros.
Since the diesel debacle with manipulated exhaust gas software, which has cost VW so far more than 30 billion euros, the company is trying to save costs and avoid unnecessary investment. Pushing the paragraph is no longer at the top of the list of priorities, said Witter.
Management plans job cuts
Herbert Diess advocates fleeing forwards with the electric offensive due to the stricter CO2 emission regulations in force in the EU next year, and wants to give VW a greener image. For both years, one is confident to meet the CO2 targets, said the manager. In the coming year, it would be necessary to sell about 4 percent of the cars as electric cars, the year after VW wanted to double the share to 8 percent.
In order to have the necessary billions for the new drives, VW has to calculate just short and wants to reduce jobs among others. In the next five years, 60 billion euros are earmarked for electromobility, networking and software - around 40 percent of the total investment budget.
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Based on lower sales growth, Volkswagen will also be left with less profit in the coming year. The return target for earnings before interest, taxes and special items remains at 6.5 to 7.5 percent.
The yield plans of the premium subsidiary Audi are questionable. Achieving this in the coming year will be exhausting and may end up not quite in the range of 9 to 11 percent return on sales, said Witter. Audi is suffering from a sales slump and is currently falling behind the rivals Mercedes -Benz and BMW back. The factories are underutilized, which costs the Ingolstadt residents dearly. In April, former BMW manager Markus Duesmann will take up office as the new Audi CEO.
The profit outlook in China estimates VW now more cautious. For over a year, the most important single market has been weakening, especially in the mass models, where VW is the market leader in the country. Although Volkswagen is better off than many a competitor, but originally had the Wolfsburg also here for the next year more calculated, as Witter admitted. China accounts for around half of all deliveries for the core brand VW Passenger Cars, and around 40 percent for the Group.
