Volkswagen to reduce costs amid slowdown in Europe
With the car sales touching a 20-year low in Europe, Volkswagen AG has announced its plan to take costs reduction measures across plants, departments and levels.
Volkswagen has managed to endure the economic crisis in Europe better than other car manufacturers, primarily due to the stellar sales performance of its Audi and Porsche brands and its big presence in China.
First-half operating profit at the VW brand passenger car division declined 34 percent from a year earlier to 1.49 billion euros (Rs 12,464 crore).
The manufacturer has made it clear that costs reduction measures will be taken across plants
According to a company statement, Arno Antlitz, Volkswagen brand board member for accounting and controlling, has informed the company's 18,000-odd employees that the company needs solid earning power and a competitive cost of production.
The VW car brand is forecast to lift its operating profit margin to more than 6 per cent of sales from 3.5 per cent last year, according to Hans Dieter Poetsch, VW brand chief financial officer. The company anticipates that cars with Seat and VW badge to contribute more to its goal of achieving the status of world's largest automaker by 2018.
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