VW Has 'One, Maybe Two Years' to Turn Things Around, Says Finance Chief

Volkswagen Group executives met with workers on Wednesday. CFO Dr. Arno Antlitz warned that time was running out to change direction amid a drop in demand. VW Group sales in Europe are up slightly, but EV sales are down significantly. 

Update: In an email to Motor1, a VW Group spokesperson provided the following statements made recently by VW Group CFO/COO Dr. Arno Antlitz regarding cost efficiency for the company. The statements reflect the efficiency of VW operations in Germany.

"We have been spending more money at the brand than we earn for some time now.
That can’t go well in the long term. If we carry on like this, we won't succeed in the transformation. 

In Europe, 2 million fewer vehicles are currently sold than before COVID. Before COVID, around 16 million vehicles were bought in Europe. During and after COVID, this figure fell to around 12 million vehicles because the entire industry did not have enough semiconductors. The market in Europe has recovered since then, but will not return to its former level. We expect around 14 million vehicles to be sold per year in the future, if at all. So there is a shortfall of around 2 million units.

We [the Volkswagen Group] are the largest manufacturer with around a quarter of the market share in Europe. We are short of around 500,000 cars, the equivalent of around 2 plants. And that has nothing to do with our products or poor sales performance. The market is simply no longer there.

It is our joint responsibility to improve the cost efficiency of the German sites in particular. We need to increase productivity and reduce costs. We still have a year, maybe two years, to turn things around. But we have to make use of this time.

Simultaneously, we need to reduce the complexity of our processes and leverage even more Group synergies."
Dr. Arno Antlitz, chief financial and operating officer for Volkswagen Group, told workers gathered at the company's Wolfsburg headquarters the company has "one, maybe two" years to turn things around for its main car brand, Volkswagen. His words come just days after news that VW could close two plants in Germany, something that hasn't happened in the company's entire 87-year history.

Approximately 25,000 workers were on hand for a meeting with company executives on Wednesday, per a report from Reuters, and they were rather vocal about the possibility of plant closures in the country. In the 1990s, an agreement was established that guaranteed job security of VW Group employees through 2029. But VW's leadership argues that changing markets in Europe will require significant cost cuts as demand drops. Antlitz mentioned a shortfall of around 500,000 vehicles and told the assembly that sales likely wouldn't recover in the post-pandemic era.

In response, the Volkswagen works council blasted company executives for failing to do their jobs. According to Euronews, Chairperson Daniela Cavallo didn't mince words during the meeting, accusing the board of not focusing on the core business and making employees pay for their mistakes.

Glancing at recent VW Group sales stats, things don't appear as dire as Antlitz suggests. Second-quarter results show the European market is up slightly at 1.9 percent, while sales are also up in South America and the US. It's a different story in Asia, though, where competition from China has VW Group sales down 8.2 percent. Looking specifically at electric vehicles, the company is suffering all across Europe with sales down 15.2 percent. With VW Group pushing hard towards an electric lineup in its plethora of brands, these numbers point to a difficult future.

Volkwagen's longterm future in the US remains uncertain. In the meantime, VW's reboot of the Scout brand is still on track with its new electric truck and SUV scheduled to debut on October 24.