VW Group Boss Admits The Real Problem: Its Cars Aren’t Profitable Enough

Volkswagen Group’s CEO, Oliver Blume, has admitted that the company’s underlying problem is slim profit margins. Despite high demand for its products, the company is not making enough money from them due to high production costs. To address this issue, the company plans to implement more cost-cutting measures across all areas of the business, which could include cutting up to 120,000 jobs, or roughly a fifth of the company’s workforce. The company also plans to reduce its product portfolio by up to 50 percent, prioritizing high-volume products and those with the biggest profit margins. Additionally, the company will reduce the number of available options for surviving models by up to 75 percent. The goal is to increase sales per model by streamlining the product portfolio and focusing on cash cows. The company’s cost-cutting plan is in response to high labor and energy costs, and the need to offset these costs by scaling down operations. The situation is dire, and the VW Group’s business model is in need of radical change. The company’s future will likely involve a significantly reduced product lineup and a smaller workforce.