AUTO: “The house is on fire,” said the CEO of VW during a speech to some 2,000 managers of the brand, who are asked to make drastic savings.
Europe’s biggest brand is clearly not in its best shape. This is in any case what emerges from the meeting between Thomas Schäfer, big boss of the Volkswagen brand (not to be confused with the VW group), and more than 2,000 managers. He said during his presentation that “The roof is on fire” (Anglo-Saxon expression expressing a clear sense of urgency), and explained it by the fact that the company allowed costs to rise too much, in many areas. He then indicated that the next few months were going to be particularly tough for the brand.
He, therefore, called on his managers to put in place performance programs that will make it possible to accumulate “small gains”, which would result in a total saving of… ten billion euros in three years! The company’s structures and procedures are pointed out as too complex, too slow and too rigid. So that’s where the efforts would be concentrated, but we can’t imagine how the brand can save so much in such a short time, without going through the “troop reduction” box.
And since little has been said about what caused such a situation, we’re guessing. It seems quite clear that VW is a victim of its desire to switch to 100% electric in the fairly short term, with the colossal investments that this implies. Investments paid off much less quickly than expected due to the very slow growth in sales of electric cars in Europe and by the sharp drop in VW’s market share in China, where the brand is also caught up in a ruthless price war. There, the price of an ID.3 has gone down to 16,000 euros, so it’s hard to see how the manufacturer can make any profit.
So that’s how a too-rapid electrical transition, negatively influenced by very volatile elements (global crises that put markets in slow motion and cause the price of raw materials to explode) is already shaking what is in principle the most powerful brand of Europe. Who’s next?