German auto major is now feeling the heat of stiff competition in the electric vehicle segment. The company’s Boss Thomas Schaefer has warned that high costs and low productivity were making its cars uncompetitive and as a result it was negotiating with its works council over a cost-cutting scheme at the VW brand, the first step in a group-wide drive to boost efficiency in the transition to electric cars as per Reuters report.
“With many of our pre-existing structures, processes and high costs, we are no longer competitive as the Volkswagen brand,” stated the report quoting Schaefer.
The carmaker’s 10 billion euros (Rs 87,880 crore) cost saving programme includes staff reductions with other measures to be outlined and defined by end of the year.
“We need to finally be brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we don’t need for good results,” stated Kilian.
Even in India, the German carmaker despite investing significantly has been not able to make much headroom in the competitive passenger vehicle segment. As a result, the OEM has shifted its focus towards catering to the premium vehicle segment (above Rs 10 lakh) which now accounts for almost 45 percent of the passenger vehicle sales. It is targeting 3 percent market share in the coming few years from the current 1.2 percent. The company had sold 10,592 vehicles in H1 FY2024 in India versus 9,157 units last year.
