FRANKFURT (Reuters) -- Volkswagen said on Wednesday it would save $3.4 billion in the next five years by cutting spending and would make its production more flexible.
According to slides on the company's Web site from an analysts' presentation given in London, VW also aims to increase its use of modules -- which enable components to be shared between different models -- to cover 50 percent of its production from a current 10 percent.
The company would also space out new model launches to avoid having key products age at the same time. One of the reasons its sales and profits are currently suffering is that its top-selling Golf model and important Passat saloon age simultaneously.
Its operating profit more than halved in the second quarter due to a strong euro, new product costs and slumping demand, and it does not expect to match last year's 4.76-billion euro operating profit in 2003.
The presentation, given by CEO Bernd Pischetsrieder and incoming Finance Chief Hans Dieter Poetsch, repeated that VW aimed to cut costs by one billion euros this year.
Sal. Oppenheim analyst Patrick Juchemich said Pischetsrieder had also told analysts that the company was planning a new executive saloon to fit in above its Passat, but below the luxury Phaeton model which it admits has been a disappointment.