Volkswagen Group Considering More Cost Cuts To Cope With Downturn
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Volkswagen is considering more cost cuts to help cope with the economic impact of the coronavirus pandemic, a spokesman for the German automaker said on Saturday.
The issue was recently discussed at an internal event, the spokesman said, when asked about a report in industry magazine Automobilwoche.
“There were general deliberations about what further cost measures could be taken to respond to the pandemic,” the spokesman said. “There are no concrete decisions yet.
Volkswagen and Daimler both said Wednesday that they foresaw full-year profits despite taking a beating from the global virus crisis.
Automobilwoche quoted Volkswagen CEO Herbert Diess as telling top managers at a meeting on Thursday: “We must significantly cut R&D expenditure, investments and fixed costs compared with the previous planning.”
The group’s net liquidity would “continue to decline at least until July due to weak demand”, the magazine, citing participants at the event, quoted Diess as saying, adding that not all group brands would achieve a positive result in 2020.
This meant the main VW passenger car brand must reduce its so-called material overheads by 20%, the magazine said.
Questions & Answers
Q.What is the primary reason Volkswagen Group is considering further cost cuts?
What is the primary reason Volkswagen Group is considering further cost cuts?
The company is considering more cost reductions to help manage the economic consequences of the coronavirus pandemic. A spokesman confirmed the issue was recently discussed at an internal event, following a report in Automobilwoche.
Q.What specific areas has CEO Herbert Diess indicated must be reduced?
What specific areas has CEO Herbert Diess indicated must be reduced?
CEO Herbert Diess stated to top managers that R&D expenditure, investments, and fixed costs must be significantly cut compared to previous plans. This is a direct response to the downturn and weak demand.
Q.Which specific Volkswagen brand is expected to make a significant cost reduction?
Which specific Volkswagen brand is expected to make a significant cost reduction?
The main VW passenger car brand is expected to reduce its material overheads by 20%. This measure is being considered to help some group brands achieve a positive financial result during the economic downturn.
Q.How long does Volkswagen expect its net liquidity to decline?
How long does Volkswagen expect its net liquidity to decline?
Volkswagen expects its net liquidity to continue to decline at least until July, due to weak demand. This forecast was shared by CEO Herbert Diess, as reported by industry magazine Automobilwoche, citing event participants.
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