Volkswagen under pressure: Flower demands record margins until 2026!
Volkswagen under pressure: Flower demands record margins until 2026!
Volkswagen AG faces enormous challenges, which are additionally tightened by the current economic difficulties. The CEO of the Group, Oliver Blume, has clearly recognized the situation and sees an unmistakable need for savings of ten billion euros until 2026. This company is anything but easy and could only be achieved with drastic measures such as plant closures and personnel cuts.
The first six months of 2024 were anything but positive for Volkswagen. The company's profit has dropped by almost 14 percent compared to the previous year and is now 8.5 billion euros. The decline of the margin of the main brand VW, which fell to only 2.3 percent, is particularly alarming. This happened while difficult collective bargaining with IG Metall. Blume itself described the situation as challenging: "A large part of the work is still ahead of us".
high margin goals by 2026
The brands in the luxury segment, such as Porsche, Bentley and Lamborghini, are under particular under pressure. Blume has spent high margins for these brands to achieve the necessary returns. In internal documents that according to Business Insider pointed out that the global challenges require an adjustment of the profit margins.The current margin goals by 2026 are divided as follows:
| brand
| |
|---|---|
| Volkswagen | 6.5 % |
| Skoda | 10 % |
| cupra | 10 % |
| audi | 13 % |
| ducati | 14 % |
| Porsche | 20 % |
| Bentley | 20 % |
| lamborghini | 25 % |
| Volkswagen Commercial Vehicles | 6 % |
The group's strategy focuses on the fact that the luxurious brands, which did relatively high business in 2023, are to compensate for the worrying decline in the main brand. While the margins for the core segment such as Cupra, Skoda and Audi are lower, Blume hopes that the established premium brands can act as an economic backbone.
This strategic realignment also represents a reaction to the adjustments to the market, which are necessary against the background of in -depth economic uncertainties. Flower remains optimistic and states that it is possible to achieve the set margin goals, even if the numbers were rather bad for the first half of the year.
The next few years will be decisive for the future of Volkswagen, and Blume has according to Annual reports more work promised. The question remains whether the high margin goals can actually be implemented and whether the luxury brands lead the company out of the crisis. Time will show how the strategy affects and what specific measures are taken to restore the financial health of the group.
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