VW to Cut $2 Billion in Costs by Offering Fewer Trims, Variants
Thanks to the emissions scandal, Volkswagen's future existence has been called into question as the company has had to set aside large amounts of cash to deal with the various recalls and fines. With sales numbers dropping, the automaker needed to find a way to tighten its belt.
The automaker identified a way to save around $2 billion, which will cut trim levels and variants in its lineup, Bloomberg reports. "We from the works council have long flagged the huge range of model variants and different components. That brings enormous complexity and adds to costs, for example, for logistics. We can take out costs there on a large scale and don't have to talk about job cuts," said labor representative Bernd Osterloh in a briefing with journalists in Wolfsburg, Germany, last week.
So far, the emissions scandal has cost Volkswagen just over $9 billion. While the $2 billion that it will save by cutting trim levels will help, the automaker will also cut investments by $1.05 billion a year. VW Group is also scaling back its sports car racing programs to save money, with both Audi and Porsche running one less car in the WEC series. The scandal is currently being battled on three fronts now, with the nearly 85,000 3.0-liter diesel models in the U.S., 800,000 vehicles in Europe with irregular CO2 ratings, and the nearly 11 million vehicles globally that feature a 1.2-, 1.6-, and 2.0-liter diesel engine.