Volkswagen Has New Strategy To Increase Profits

Industry News / 8 Comments

Mass-produced cars will no longer be its primary focus.

After its disastrous dieselgate scandal, Volkswagen was one of the first manufacturers to declare that it would embrace the future of electrification. By 2035, the expectation is that every VW product sold in the European region will be free of the internal combustion engine. Launching its electric strategy in the USA is the due-to-be locally produced Volkswagen ID.4 followed by the already popular ID.Buzz, and more exciting EVs.

Leading up to this, the German automotive giant is investing massive sums of cash into production plants and development so that it can match future competitors such as Tesla as well as the more recent Rivian and Lucid marques. It's now apparent that in terms of future products, Volkswagen will be taking a very different approach to how it will tackle the post-covid car market.

2021-2022 Volkswagen ID.4 Front Angle View Volkswagen
2021-2022 Volkswagen ID.4 Top View Volkswagen
2021-2022 Volkswagen ID.4 Aft View Volkswagen
2021-2022 Volkswagen ID.4 Rear View Driving Volkswagen

VW Group CFO Dr. Arno Antlitz revealed to the Financial Times that the business would be completely changing its sales strategy by straying away from large-volume models such as the current Golf and focusing on fewer but more premium models. This is a direction that is becoming common with the big names in the automotive sphere as the supply chain crisis highlights how in-demand more premium cars have become.

Dr. Antlitz says, "The key target is not growth. We are [more focused] on quality and on margins, rather than on volume and market share."

He adds that in Europe specifically, Volkswagen will reduce the amount of internal combustion car options by 60% before the decade concludes.

2021-2022 Volkswagen ID.4 Front View Driving Volkswagen
2021-2022 Volkswagen ID.4 Frontal Aspect Volkswagen
2021-2022 Volkswagen ID.4 Front-End View Volkswagen
2021-2022 Volkswagen ID.4 Side View Driving Volkswagen

With this notion, it is apparent that Volkswagen is set on completely contrasting its previous strategy of focusing on mass unit sales. This is the plan that was laid out by the brand's former chief executive Martin Winterkorn who was forced to step down from his position due to Dieselgate.

Looking at its financial results for 2021, we see that Volkswagen is already enjoying higher profits despite its unit sales decreasing compared to previous years. In doing so, it was able to enjoy profits in the North and South American markets again after a period of financial losses.

Frontal Aspect Volkswagen
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Source Credits: Financial Times

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2021-2022 Volkswagen ID.4 Front Angle View
2021-2022 Volkswagen ID.4 Top View
2021-2022 Volkswagen ID.4 Aft View
2021-2022 Volkswagen ID.4 Rear View Driving
2021-2022 Volkswagen ID.4 Front View Driving
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