VW To Massively Cut Model Portfolio Complexity In Bid To Raise Profits

The Volkswagen brand is looking to raise its profits margins faster than it had previously planned, hoping to achieve a 6% rise in 2022, three years earlier than initially anticipated. Recently, their margins stood at 4%.

VW will start things off by investing more than 11 billion euros ($12.5 billion) in e-mobility, digitalization, autonomous driving technologies and mobility services by the year 2023, with most of that money going towards electric vehicle development, reports Automotive News Europe.

While it’s unclear at this point how their plans will affect jobs, the automaker has ruled out the idea of any forced layoffs.

As for their lineup of products, there will be a “massive reduction” in its complexity. In Europe, VW will discontinue 25% of engine-transmission variants with low customer demand in the coming model year. Meanwhile, talks with Ford about a potential alliance beyond commercial vehicles are ongoing.

The two automotive giants could work together in areas such as electric and autonomous vehicle technology, and as far as the U.S. is concerned, VW plans on adding at least two new SUV models, to go with their medium term electric car plans – although for the latter, a decision has yet to be made regarding a production site.

Speaking of which, a potential global alliance with Ford could result in the German automaker building its vehicles at Ford’s underutilized plants in the U.S.