Volkswagen targets profit recovery as speeds transformation

16 Mar 2021

                                                                            Volkswagen targets profit recovery as speeds transformation

Volkswagen is confident that cost cuts will help it raise profit margins in the coming years, the world's second-largest carmaker said on Tuesday, a day after outlining an ambitious electric mobility expansion.

"Our good performance in 2020, a year dominated by crisis, will give us momentum for accelerating our transformation," Chief Executive Herbert Diess said in a statement.

The comments come a day after Volkswagen unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla.

Volkswagen said it aimed for an operating margin of 7%-8% in the years after 2021, not specifying an exact year, confirming it would end up at the upper end of a 5%-6.5% target corridor this year.

This will be achieved by 2 billion euros less fixed costs by 2023 compared with 2020, a decline of 5%, as well as a decline of 7% in materials costs over the same period, Volkswagen said. ($1 = 0.8382 euros) (Reporting by Christoph Steitz; Editing by Riham Alkousaa and Emma Thomasson)