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One-year acceleration strategy: Volkswagen enhances efficiency and accelerates transformation

Ralph Brandstätter, CEO of Volkswagen, said:

Volkswagen has successfully transformed into a technology company in the first year of its ACCELERATE strategy. Key milestones were achieved in 2021 with respect to key elements of electronic mobility, digitalization and new business models. At the same time, we have continuously improved efficiency in a fiercely competitive environment. Last year, sales, revenue and operating profit increased significantly, despite a significant decrease in unit sales.

“2021 was a special year. In a very harsh environment, we not only made good progress in operation, but also continuously improved efficiency. Today, we were a year ago. It’s much more profitable, crisis-resistant and more effective than it is. At the same time, the ACCELERATE strategy has further accelerated the pace of transformation into a technology company, “said Volkswagen CEO Ralf Brandstät. Stetter says. “We will continue to drive transformation and resilience in 2022. However, at this time it is not possible to predict the course of the war in Ukraine, especially the impact on the supply chain and the global economy as a whole. Also laid a solid foundation for overcoming this crisis. “

Optimized cost structure, strict spending discipline, good product mix

In 2021, the number of vehicles delivered in the fiercely competitive environment was 4.9 million units, a decrease of 8% from the previous year (2020: 5.3 million units). Nevertheless, sales increased by 7% to EUR 76.1 billion (2020: EUR 71.1 billion). Profit before special items also increased significantly, increasing by € 2 billion to € 2.5 billion (2020: € 500 million). The operating margin before the special items in 2021 was 3.3% (2020: 0.6%), which was within the target corridor of 3-4%.

As a result of the restrictive spending policy, the overhead target was achieved in 2021. Fixed costs were more than € 1 billion below the pre-crisis year figures for 2019. At the same time, Volkswagen continued to make large investments. Future topics: e-mobility was assigned for every euro invested or spent in R & D. The company plans to invest € 18 billion in e-mobility, hybridization and digitization by 2026.

North and South America regions return to sustainable profitability

“We consistently pursue Volkswagen’s transformation through intensive investment in future projects, optimized overhead structures, and a clear improvement in revenue quality through attractive products and superior product mix. We have further strengthened Volkswagen’s resilience in 2021 as the region has improved, “commented Volkswagen CFO Alexander Zytz.

In 2021, sales and performance in the two regions of the Americas were significantly higher than the previous year, and were in the black for the first time in several years. “In North and South America, we have consistently tailored our product portfolio to local market requirements, reduced fixed costs and adjusted local production. The region is currently achieving sustainable profitability and the number of futures. We have a strong plan to be more competitive over the years, “says Ralph Brandtstetter.

Key milestones in electronic mobility and digitalization

With the ACCELERATE strategy launched last year, Volkswagen is not only increasing its competitiveness, but also accelerating its e-mobility and digitization enhancements.

In fiscal year 2021, the company delivered more electric vehicles worldwide than ever before. In total, more than 369,000 electric vehicles (+ 73%) – about 106,000 were PHEVs (+ 33%) and 263,000 were all electric vehicles (+ 73%). + 97%) – Delivered to the customer. As a result, Volkswagen doubled the number of BEVs delivered from the previous year. Three new electric models were launched in 2021: ID.401 01 And ID.502 02 – Both are equipped with the finest GTX03 03 Model – and ID.604 04 In China. ID debut was already seen in 2022.Buzz05 05 a few weeks ago. Pre-sale will begin in May, and the first model is scheduled to be delivered in the fall.

We are systematically expanding our production capacity to meet the rapidly growing demand. After the Zwickau plant was converted to a dedicated electric vehicle production facility, three more plants (Emden, Hanover and Chattanooga (USA)) began manufacturing electric vehicles in 2022.

The company has also reached an important milestone in digitalization. In 2021, Volkswagen became the first volume car manufacturer to offer wireless (OTA) updates. In Europe, over 100,000 software updates have already been installed on customer vehicles. OTA will also be available in major markets in the US and China by the end of this year. In this way, the company is laying the international foundation for new business models such as on-demand capabilities, which are additional services that customers can book.

Volkswagen is improving the customer experience with new IDs. 3.1 software for all vehicles in the ID. family. The new generation of software will debut with ID.5 and ID. It will be available consecutively with Buzz and all IDs. client. It reduces charging time, enhances comfort and optimizes operation.

One-year acceleration strategy: Volkswagen enhances efficiency and accelerates transformation

Wolfsburg becomes a pioneer in development and speeds up even more

Under ACCELERATE, Volkswagen is also driving the transformation of Wolfsburg’s major factories.Factory begins construction of the first all-electric model, ID.3.06 06, 2023. Production of the second electric model, Trinity07 07, Will start in 2026. The charging time of this model is much shorter, and the cruising range exceeds 700km. Equipped with the group’s state-of-the-art software, it technically supports Level 4 autonomous driving. Underlying is Volkswagen’s new SSP platform for the group in Wolfsburg.

Volkswagen plans to invest approximately € 2 billion in a dedicated production facility built near the main plant. In addition, an additional € 800 million will be spent on the site’s new development center. At this location, called Campus Sandkamp, ​​a new SSP electrical platform and Trinity will be developed with the aim of significantly accelerating development and production and setting new benchmarks. The future goal is to reduce development time by 25% and the vehicle project will be completed in 40 months instead of the previous 54 months.

2022 Outlook: Increased Revenue, Revenue, and Electric Vehicle Delivery

Volkswagen plans to significantly increase delivery of all-electric vehicles by the end of this year. This will be helped by the expected improvements in semiconductor availability in the second half of 2022 at the latest. In addition, Volkswagen expects operating profit, sales and sales to increase. “We have identified our goal of a profit margin of 6% in 2023 and will set the next milestone in 2022 to reach that goal,” said Alexander Zeitz, CFO of Volkswagen. ..

However, this guidance is subject to further developments in the war in Ukraine, especially the impact on the Group’s supply chain and the global economy as a whole. At the time of making this outlook, there is a risk that the latest developments in the war in Ukraine will adversely affect the Volkswagen passenger car business.


Financial figures Volkswagen passenger car

2020 2021 %change of
delivery (One million) 5,3 4,9 -8%
Revenue (1 billion euros) 71,1 76,1 + 7%
Operating income In front of special items (1 billion euros) 0.5 2.5 + 451%
Operating profit margin In front of special items (%) 0.5 3.3 3.3
Cash flow from operating activities (Million euros) 89 212 + 138%

sauce: Volkswagen

https://www.automotiveworld.com/news-releases/one-year-of-accelerate-strategy-volkswagen-strengthens-efficiency-and-speeds-up-transformation/ One-year acceleration strategy: Volkswagen enhances efficiency and accelerates transformation

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