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Volkswagen has 1 Or 2 Years To Remain Healthy As Demand Remains Disappointing
Things are in turmoil at Volkswagen. Now that the German brand wants to close factories for the first time in its history, Volkswagen’s financial director is also sounding the alarm. The brand would have ‘1, maximum 2 years’ to adapt to the new reality.
According to Reuters and The Guardian, the fierce words came from Arno Antlitz, Chief Financial Officer of Volkswagen. He addressed an angry group of tens of thousands of employees in response to the threatened factory closures. The message: those employees would do better to work together with Volkswagen to cut costs and help the brand through this very difficult period.
In this context, we are specifically talking about the Volkswagen brand, the passenger car manufacturer that is the standard-bearer of the large Volkswagen Group. According to Antlitz, the European car market has never been the same again after the coronavirus pandemic and Volkswagen has to ‘get used to’ a demand that has decreased by 500,000 cars per year, which roughly corresponds to the capacity of two factories. According to Antlitz, the European market has shrunk from 16 million cars per year before the pandemic to 14 million now. “That has nothing to do with our products or our sales performance, the market is simply no longer there,” says the CFO. Sales in China are also disappointing, says CEO Blume, which is a major problem, as that country is Volkswagen’s largest sales market.
The fact that car brands from the same China are now shipping affordable EVs to Europe in large numbers undoubtedly also has an impact on the situation in which Volkswagen currently finds itself. The brand is aiming for a profit margin of 6.5 percent in 2026, but there is still some work to be done. In the first half of 2024, the Volkswagen brand did not get further than 2.3 percent, compared to 3.8 percent in 2023. According to Antlitz, something has to change very quickly to turn the tide. Getting used to the new situation, in combination with the transition to electric driving, costs a lot of money and major reforms, such as the closure of factories, would simply be unavoidable.
