Volkswagen's main volume nameplates will share more parts and factories to boost efficiencies as the car maker battles to lift profitability in the more affordable range of its portfolio.
To differentiate between its namesake VW, Seat and Skoda brands, Europe’s largest car manufacturer will emphasise individual design, the new head of VW’s main car brand, Thomas Schaefer, said in an interview.
The company has long struggled to rein in complexity of multiple engine and trim variants across its sprawling offering that includes the upscale VW Touareg SUV and the Skoda Fabia.
“In the past, we wasted too much time being preoccupied with each other,” Mr Schaefer said. “The competition is outside, it’s not within the company.”
Volume models make up about 80 per cent of VW’s global deliveries, making them “the core of the company”, Mr Schaefer said. VW is aiming for an efficiency gain of 20 per cent, he said.
As part of the push, production of the sturdy VW Passat sedan in Germany and Skoda’s flagship Superb family car in Czech Republic will shift to Slovakia to help reduce internal overlaps.
VW must become more competitive in the face of rivals ranging from Tesla to incumbent manufacturers like Stellantis NV, Mr Schaefer said.
One key battleground is the US, where the company plans to shed its niche market role, Mr Schaefer said. VW returned to profitability in the US last year as it expanded electric-vehicle sales.
VW’s volume segment plans to produce more of its electrified vehicles in the US, including possibly two SUVs, Mr Schaefer said.
The car maker has set up a battery-research lab in the country and is exploring adding a large-scale cell factory, he said.
“For us, the US offers promising growth potential, which we can drive through the electrification of our lineup."
The executive said he’s also optimistic that VW’s efforts in China, where the car maker plans to overhaul its products to better meet the demands of local customers, would prove successful.
Chief executive Herbert Diess has made the company’s push to defend market share in the world’s largest auto market a key priority. He called China the company’s “second home market”, telling staff in Germany last month that a large part of their bonuses were generated there.
VW’s mass-market brands sharing more factories and improving co-operation on production and development will help deliver on the car maker’s efficiency goal, Mr Schaefer said.
While Volkswagen group generates bumper profit and operating cash flow, the luxury Audi and Porsche nameplates have long padded the car maker’s results. Attempts to lift returns at the main VW brand by streamlining processes have so far yielded modest results.
VW is set to add more popular crossover and SUV models to its mass-market lineup to stay competitive, Mr Schaefer said.
The segment, which also covers VW’s new electric model range code-named Trinity, “offers the biggest growth potential for the brand”, he said.
VW plans to break ground on a new €2 billion ($2bn) electric car factory that will make the Trinity marque in 2023. The first Trinity car will roll off the production line in 2026.
Looking towards the third and fourth quarters, Mr Schaefer said he was cautiously optimistic that the chip crunch would ease and that the industry would see fewer supply constraints.
“The prospects for the second half of the year are good, but overall, the situation remains volatile,” he said.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
UAE currency: the story behind the money in your pockets
Company%20Profile
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Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE currency: the story behind the money in your pockets
'Young girls thinking of big ideas'
Words come easy for aspiring writer Afra Al Muhairb. The business side of books, on the other hand, is entirely foreign to the 16-year-old Emirati. So, she followed her father’s advice and enroled in the Abu Dhabi Education Council’s summer entrepreneurship course at Abu Dhabi University hoping to pick up a few new skills.
“Most of us have this dream of opening a business,” said Afra, referring to her peers are “young girls thinking of big ideas.”
In the three-week class, pupils are challenged to come up with a business and develop an operational and marketing plan to support their idea. But, the learning goes far beyond sales and branding, said teacher Sonia Elhaj.
“It’s not only about starting up a business, it’s all the meta skills that goes with it -- building self confidence, communication,” said Ms Elhaj. “It’s a way to coach them and to harness ideas and to allow them to be creative. They are really hungry to do this and be heard. They are so happy to be actually doing something, to be engaged in creating something new, not only sitting and listening and getting new information and new knowledge. Now they are applying that knowledge.”
Afra’s team decided to focus their business idea on a restaurant modelled after the Leaning Tower of Pisa. Each level would have a different international cuisine and all the meat would be halal. The pupils thought of this after discussing a common problem they face when travelling abroad.
“Sometimes we find the struggle of finding halal food, so we just eat fish and cheese, so it’s hard for us to spend 20 days with fish and cheese,” said Afra. “So we made this tower so every person who comes – from Africa, from America – they will find the right food to eat.”
rpennington@thenational.ae
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
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