Frankfurt (Germany) (AFP) – German carmaker Volkswagen said Thursday that it needed to redouble cost-cutting efforts after its quarterly loss deepened to 5.8 billion euros ($6.5 billion) amid intense Chinese competition. “What matters now is swift and consistent implementation,” Volkswagen’s chief financial officer Arno Antlitz said, warning that the company’s ability to invest in future technologies was at stake. “There is no time to lose and we need to act quickly and decisively,” he added.
Volkswagen reported the 5.8-billion-euro loss for the three months to end-September, deeper than the 1.1-billion-euro loss it reported for the same period last year. Restructuring costs as well as write-downs in China and particularly at Porsche, the sports car maker also struggling in China, all weighed on the result. Sales fell 6.3 percent in the quarter to 75.3 billion euros. Overall vehicle deliveries fell 14.3 percent worldwide, driven by a collapse of almost 40 percent in China.
Like its peers BMW and Mercedes-Benz, Volkswagen has struggled with years of declining sales in China, the world’s largest car market, where cutthroat competition between over 100 carmakers has taken its toll. Volkswagen last month reached an agreement in principle with unions to cut an additional 50,000 jobs globally across the 10-brand group by the end of the decade, bringing total planned reductions to 120,000.
“Obviously, we want to close the deal with the unions as fast as possible,” Antlitz said during an earnings call, adding that negotiations were ongoing. “If you look at our results, we need urgent contributions on that, but we don’t have it in our own hands,” he said. German carmakers have increasingly sought to use China as a base to benefit from faster production cycles, while working with Chinese partners such as Momenta and Horizon Robotics to integrate new technologies from the world’s most competitive market.
Mercedes-Benz and BMW have both promised to shift more of the supply chain for their Chinese vehicles into China, and VW’s China boss Ralf Brandstaetter said Wednesday that the company aimed to export 300,000 vehicles a year from the country by 2030. Antlitz said Volkswagen’s Western operations would make increasing use of Chinese components to stay competitive, pointing to the forthcoming low-cost ID.Every1 that would have a Chinese electric motor.
“We look selectively at what we can use from China, what do we want to use from China,” he said. “Where we localise the components in Europe, obviously developed by ourselves, we at least use the benchmarks from what we learned in China.”
© 2024 AFP
