WOLFSBURG, Germany -- Volkswagen Group aims to raise the profitability of its core VW brand, which lags those of major rivals, to 6 percent by 2025, VW brand chief Herbert Diess told a news conference today.
The operating profitability of the VW brand, which accounts for almost half of group vehicle sales, is expected to reach just 2 percent this year and 4 percent in 2020.
Diess provided details of his plans today follow the group's Friday announcement of a compromise with labor unions that will allow it to cut 30,000 jobs at the VW brand by 2025 in exchange for a commitment to avoid forced redundancies.
"We want to make Volkswagen future-proof," said Diess, who needs to burnish his credentials as a cost-cutter as the company struggles to restore its reputation and make deep savings to pay for the costs of its emissions-cheating scandal.
VW brand's 6 percent margin target matches that of European mass-market rival PSA Group, but the French automaker aims to reach that level of profitability by 2021.