VW to slash investments
14 November 2003, WOLFSBURG - German automotive giant Volkswagen AG announced plans Friday to slash investments by 11 percent through the next five years to cope with the slump in the worldwide car market.
14 November 2003
WOLFSBURG - German automotive giant Volkswagen AG announced plans Friday to slash investments by 11 percent through the next five years to cope with the slump in the worldwide car market.
Chief financial officer Dieter Poetsch said investments in the period through 2008 would total EUR41.6 billion, with the 11 percent reduction having no effect on VW's planning for new models.
He said that EUR30.9 billion of the total would go to VW's car production segment, some 7 percent below previous planning.
Of that amount, some 68 percent or around EUR21 billion will be invested inside Germany, chiefly the Passat factories in Emden and Mosel and the Audi A6 works in Ingolstadt.
A spokesman said that outside Germany, focal points of investment would be in VW's operations in the Czech Republic, Spain, Brazil and Mexico. But the investment plans made no mention of Russia, he said, in referring to speculation about VW planning a factory there.
Altogether, some EUR27 billion will be spent in developing the new Passat, the new A6, model variations on the new Golf and on utility vehicles.
At the same time, VW is aiming to increase its annual car sales from the current 5 million to 6 million by the year 2008, Poetsch said.
Abroad, VW is aiming for investments of some EUR6 billion with its joint venture partners in China. The money will go towards new models, production facilities and factories.
Sources at the company said the supervisory board, meeting Friday at the Wolfsburg headquarters, had completely backed the investment cutback plans. Executives said VW was not changing its course, but merely adapting to the world car market situation.
But there was apparently some controversial discussion about VW's operations in Brazil, where the company has run up major costs in seeking to slash 4,000 jobs from the workforce. The sources said that in the end, the supervisory board saw there was no alternative to the company's plans in Brazil.
Subject: German news