In the wake of the Dieselgate scandal, VW Group is currently trying to cope with its budget cuts in order to pay for the misconduct.
The VW brand will eliminate some variants and trim options from its line-up, in order to reduce the complexity and costs, said Bernd Osterloh, the automaker’s top labour representative.
VW Group has identified about 1.9 billion euros in savings at its namesake car brand to help offset fines and recalls stemming from the manipulation of vehicle emissions.
Aside from that, the automaker’s senior executives are expected to participate in the broader savings effort by receiving lower bonuses this year.
“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 Osterloh.
Volkswagen is grappling with an emissions scandal on three fronts: cheating software installed in about 11 million vehicles worldwide with 1.2-, 1.6- and 2.0-litre engines; irregular carbon dioxide ratings on about 800,000 vehicles in Europe; and questionable emissions software in about 85,000 VW, Audi and Porsche vehicles with 3.0-litre diesel engines in the U.S.
The company calculated that the dieselgate scandal will cost them 8.7 billion euro and plans to reduce investment by 1 billion euros a year, targeting a total of 5 billion in efficiency gains.
Savings will be key as customers are balking at buying new VW vehicles because of uncertainty created by the scandal, Osterloh explained. Volkswagen executives have generally downplayed the effect of the revelations over the manipulations on customer behavior. To respond to weaker demand, the automaker plans to scale back production to avoid bloating inventory of unsold vehicles.
