VW denies it may miss profit goals on slow growth, higher MQB costs
FRANKFURT -- Volkswagen Group denied a German magazine report that the company may miss its profit goals because of slower growth and higher-than-expected costs for the the ramp up of its MQB modular architecture.
VW Chief Financial Officer Hans Dieter Poetsch is concerned that the automaker won't meet 2015 targets and is looking to cut costs by about 1,000 euros ($1,355) per vehicle, Manager Magazin said in a report published on Thursday.
Higher than expected costs for VW's new modular assembly architecture (MQB) are weighing on profit margins, Manager Magazin said, citing company sources. It also said that several new models such as the Touran minivan and the Tiguan compact SUV were expected to be less profitable than previous versions of the models.
Poetsch made his comments to Volkswagen managers at VW's headquarters in Wolfsburg on Sept. 13, according to the magazine.
Volkswagen said the report was "without any foundation" and the company remains fully committed to its statements on the future business development of the group. The suggestion that it will not stick to its targets is "wrong," VW said in a statement.
Juergen Pieper, an analyst with Bankhaus Metzler in Frankfurt, said: "The trends show VW heading for a difficult phase for the first time in years." The sales momentum in the past two months have become "clearly weaker," he said.
$70 billion for new platform
VW has been developing the MQB front-wheel-drive platform since 2007. It allows the automaker to share more components between different models and is being implemented over the next four years at a cost estimated by Morgan Stanley at nearly $70 billion.
VW plans to build more than 40 new vehicles across its volume brands on the MQB platform. The first cars to use the platform - the VW Golf, Audi A3, Skoda Octavia and Seat Leon – are already on sale.
VW Group's global car sales rose just 0.1 percent last month to 720,400 cars, the automaker said on Sept. 13.
VW aims to increase sales to 9.5 million cars this year across its group brands including Audi and Porsche, up from 9.3 million in 2012. Eight-month group sales rose 5 percent to 6.17 million, an all-time high for the period, as growth in China and North America offset falling sales in Europe.
VW wants to surpass General Motors and Toyota to become the world's biggest carmaker by no later than 2018, aiming to sell more than 10 million cars per year. It also aims to boost its group pretax profit margin to more than 8 percent by 2018 from 6 percent last year.
Bloomberg and Reuters contributed to this reportContact Automotive News