Volkswagen Group plans to redouble cost savings following disappointing third-quarter margins, with falling demand in Europe and China adding urgency to efforts to slim down bloated structures.
VW Group reported a return on sales of 6.2 percent during the quarter, which compares with a long-term goal of more than 10 percent across the group.
High costs in its VW volume brand group weighed on the result. The company also took a major hit from raw materials hedges.
Like many other industrial firms, automakers hedge against commodity price swings, potentially leading to non-cash gains or losses, usually at the end of each quarter.
This led to a 2.5 billion euro ($2.64 billion) non-cash loss in the third quarter that VW will not be able to offset by the year-end.
"The further development of the commodity markets remains unpredictable," VW said.