Volkswagen outlines new strategy, to expand electric car offering

Volkswagen outlined details of its strategy for the next decade as it looks to boost profitability and broaden its electrical vehicles offering.

VW said the Transform 2025+ programme, which focuses on clearer brand positioning across regions and segments, will set the course for the brand over the next 10 years.

Chairman of the board Dr Herbert Diess said: “From 2020, we will be launching our major e-mobility offensive. As a volume manufacturer, we intend to play a key role in the breakthrough of the electric car. We are not aiming for niche products but for the heart of the automobile market. By 2025, we want to sell a million electric cars per year and to be the world market leader in e-mobility. Our future electric cars will be the new trademark of Volkswagen.”

He said the expansion in electric vehicles will be financed through the discontinuation of certain low-volume, low-earnings conventional models and model variants, which will release funds in excess of €2.5bn.

VW said it expects a significant jump in sales revenue and profitability over the next 10 years as a result of the new programme. It expects the operating margin to double from about 2% in 2015 to 4% by 2020 and 6% by 2025, with further improvements aimed for after 2025.

“Over the next few years, the Volkswagen brand will keep its investments stable at about €4.5bn. Together with improved operating earnings power, this will result in significant positive net cash flow in the medium term.”