Volkswagen’s situation is serious. His electric cars are not doing very well, and he has to save | Currently.cz

“With many of our old structures, processes and high costs, we are no longer competitive as a Volkswagen brand,” quotes the German Handelsblatt newspaper the head of the German car company Thomas Schäfer. He also led Škoda Auto in the past. He was to address these words to the employees in Wolfsburg, who filled the entire main auditorium at CongressPark.

The German newspaper, citing the participants, claims that the atmosphere in the hall was calm, with only a few disapproving whistles. “However, many VW employees were apparently not aware of the seriousness of the whole situation,” notes Handelsblatt. Although it may not seem so at first glance, Volkswagen as a brand is in relatively significant trouble and should save ten billion euros by 2026.

In addition, it is also expected to significantly increase its profitability – from the current three percent to 6.5 percent. As they stated Economic newspaper already at the end of May, when VW’s problems started to be talked about more, a three percent profitability means that the brand has three euros for every one hundred euros sold. And that is not enough for her in the long term, given the necessary investments, especially in electromobility. It is necessary to reach the mentioned 6.5 percent.

It seems that electric cars are the biggest problem for Volkswagen. DPA Agency came at the beginning of December with the information that, due to low interest, production of the Volkswagen ID.3 and the technically related Cupra Born will stop in Cvikovo until the end of the year. At the same time, the ID.3 was supposed to be VW’s path to more popular electromobility and a full-fledged alternative to the popular Golf.

But the numbers are relentless. According to data from Jato Dynamics, Volkswagen sold 54,487 ID.3s in Europe in the first ten months, as well as 150,000 Golfs.

The compact German electric car lags behind even the electric competition. The more expensive ID.4 sibling SUV is significantly more popular in Europe, the Škoda Enyaq has practically the same numbers, and there is probably no need to talk about the sales of the Tesla Model 3 and especially the Model Y, which is almost four times more popular. And competition from China is also heading to Europe, the MG4 is already more popular than the ID.3 with 56,669 units sold this year.

Handelsblatt also reminds that the problem is not only the absolute sales of electric cars, but also the relative comparison to the entire European electric car market. While the latter grew by 52 percent in the third quarter of this year, Volkswagen improved by only 34 percent. In fact, it is losing market share.

At the same time, the reaction to sales problems with electric cars is clear. Almost 500 temporary workers of the factory in Cvikovo will not have their contracts renewed by the end of the year, this year the contracts of 269 workers have already expired. They were not renewed. The DPA agency notes that this caused nervousness among other workers with temporary contracts. According to VW, however, their situation will depend on the development of demand.

Thomas Schäfer has previously said that VW will also have to cut staff in order to cut costs. Therefore, new people should not be hired to replace the staff who are headed for retirement, the layoffs should also affect employees from the brand’s management. It should apply four to six thousand people.

At least one bit of positive news reached the management of Volkswagen after all. At the beginning of the week, the production of the electric VW ID.4 and ID.5, as well as two Audi models, which had stopped in recent weeks due to a lack of engines, could be resumed in Cvikov.