Volkswagen is making efforts to boost profitability at its distressed core brand name and anticipates strong business next year due to a raft of new models, the department’s top executive stated.
The world’s largest automaker’s core department is being reorganized with millions of job cuts and retrenchments in parts and automobile development as it has a hard time to finance a post-dieselgate shift to electric vehicles and new technologies.
Over 10 new models released this year consists of the state-of-the-art Arteon fastback and a revamped Polo subcompact, among the automaker’s all-time bestsellers, would stoke demand and underpin the turnaround, Volkswagen brand official Herbert Diess informed Reuters.
“We are making great progress,” Diess stated at an event to present the next-generation Polo. “2018 will be a strong year for Volkswagen,” he stated, including a brand-new product constantly helped margins.
Volkswagen brand’s operating margin leapt to 4.6 percent in the first quarter from 0.3 percent a year previously, still lagging French competitors PSA Peugeot Citroen and Renault however getting close to its long-term 2025 target of 6 percent.
Diess stated VW had an objective for 2017 to preserve the brand’s first-quarter performance when operating profits rose to 869 million euros from 73 million a year back.
“The most crucial thing is the product offensive in coming months,” Diess stated.
The automaker is relying on the larger, technology-packed Polo models to restore its slow sales in the core European market where the brand’s deliveries moved 0.2 percent in the January-to-May duration to 726,000 cars.