Volkswagen finds itself in a difficult position, as the CEO of the German auto manufacturer has revealed. Volkswagen CEO Thomas Schafer has termed the current situation as the roof is on fire for the automaker. British automotive publication Autocar UK has reported that during a fiery internal meeting, the VW CEO said that costs are getting too high. He reportedly asked the managers to freeze spending in order to save at least $11 billion.
The report claims that Volkswagen’s CEO laid out a difficult path for Europe’s largest automaker. Schafer reportedly said that the company is letting the costs run too high in many areas. He also indicated that the coming weeks and months will be very tough for the auto company.
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The Volkswagen CEO reportedly asked the managers to find solutions for small wins. Also, he has revealed that the company is planning to devise a plan that would help it to save as much as $10 billion over the next three years.
This call for cost-cutting comes amid the sales slowdown in China, where the automaker has been forced to join in a price war, as the competition in the world’s largest auto market has tightened as domestic automakers’ share has increased. Also, this move comes at a time when Volkswagen is aiming to ramp up its game in the global electric vehicle market targeting to grab the pole position in the segment, at the same time continuing with its internal combustion engine-powered vehicles.
The Volkswagen CEO has attributed the complex, slow and inflexible corporate structures and processes to this situation. “Our structures and processes are still too complex, slow, and inflexible,” Schafer added. The German brand’s head honcho warned managers of tough times ahead.
First Published Date: 16 Jul 2023, 11:38 AM IST