Volkswagen urges German staff to tighten belts as markets slump
BERLIN (Reuters) - Europe's largest carmaker Volkswagen (VOWG_p.DE) on Tuesday warned workers at its biggest factory it might introduce cost-cutting measures in the months ahead to counter the impact of stalling sales.
Company executives including finance chief Hans Dieter Poetsch have warned recently that VW may defer some non-product investments as the German automaker struggles with slumping demand, especially in core European markets.
VW's global deliveries edged up just 0.1 percent last month to 720,400 cars, compared with a 3.2 percent gain in July, making August VW's weakest month in at least two and a half years.
Arno Antlitz, a brand executive, told a staff meeting of 18,000 workers at VW's Wolfsburg headquarters that the company needed further belt-tightening at all levels, across all regions and at all plants.
"We need solid earnings power and a competitive cost position," Antlitz said in a written statement, without being more specific.
VW last week rejected a report in Germany's Manager Magazin that it was at risk of missing its financial targets.
The publication cited company sources as saying that higher than expected costs for a new modular production architecture, known as MQB, were holding back profit margins.
VW aims to boost its group pretax profit margin to more than 8 percent by 2018 from 6 percent last year.
Despite slowing sales, there are signs that VW is weathering the slump better than its European peers.
The manufacturer last week announced 17 additional shifts at Wolfsburg in the fourth quarter to meet excess orders for the Golf hatchback, Tiguan compact SUV and Touran minivan.
VW, which wants to overtake Toyota (7203.T) and General Motors (GM.N) as the world's No. 1 carmaker no later than 2018, said on September 10 that deliveries may still climb to a record 9.5 million cars this year, compared with 9.3 million in 2012.
(Reporting by Andreas Cremer; Editing by David Cowell)
Trending On Reuters
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video