HAMBURG -- Volkswagen Group CEO Matthias Mueller is accelerating cost cuts at the embattled automaker to cope with the diesel-emissions scandal and to finance VW's shift toward electric vehicles and digital services.
Mueller is seeking to reduce costs by 10 percent next year compared with the automaker's 2016 spending, Automobilwoche sources said.
Mueller announced the goal at a meeting of the company's top management. "The cuts will be heavy and not without pain," Mueller told the gathering at VW's headquarters in Wolfsburg.
The effects of the diesel scandal "will go to the limits of what we can bear in the coming years," Mueller told his managers. At the same time, VW needs to invest "every available cent" in meeting the challenge of the industry's "brutal" transformation, he said.
The savings will cover a wide area including reducing electricity and telephone charges as well as costs for office equipment, maintenance, rental, consulting and advertising.
VW's finance chief, Frank Witter, told the managers that fixed costs, productivity and profitability would have to be improved across the 12-brand group – and especially at the core VW marque and its inhouse components businesses.
In June, Mueller mapped out a sweeping strategy overhaul for VW Group focused on electric cars, automated driving and services such as ride-hailing. VW will introduce more than 30 electric vehicles by 2025 to account for up to one-quarter of its deliveries as part of the transformation, he said at a press briefing on June 16.