AutoBeta(AutoBeta.net)06/12 Report--

Germany's Volkswagen CEO Oliver Blume is planning a massive restructuring of Europe's largest carmaker to boost its overall profits, according to a report in the German Business Daily cited by the Financial Associated Press and other media. One senior executive called it "the biggest restructuring in decades".

It is understood that the first step in restructuring is to cut costs. At the same time, the top management of Volkswagen also hopes to restructure the group structure and may involve layoffs, but Volkswagen has not yet released any news. As for the reasons for the restructuring, it is reported that the main reason is that the Volkswagen brand, which accounts for about half of Volkswagen Group's revenue, is not generating enough profits.

As of press time, Volkswagen officials did not respond to the news.

Reviewing the relatively large-scale changes in the history of Volkswagen Group, it can be traced back to 2012. At that time, Volkswagen Group experienced a major personnel reshuffle, with a total of 31 top executives changing positions, which the industry called "the largest personnel reshuffle in history". If the news of this restructuring is true, it means that Volkswagen Group will once again usher in a historic change.

According to the official website, Volkswagen Group, founded in 1938 and headquartered in Wolfsburg, Germany, is the largest car company in Europe and one of the first foreign car companies to enter the Chinese automobile market. it owns Volkswagen, Audi, Skoda, Porsche and other well-known brands, and has invested in joint ventures in China, including FAW-Volkswagen, SAIC-Volkswagen, Volkswagen Anhui and other joint ventures.

Although the Volkswagen brand is the revenue pillar of the Volkswagen Group, it is the "most dragging down" brand in the Volkswagen Group in terms of profit. According to the latest financial data, Volkswagen Group's revenue rose 22% year-on-year to 76 billion euros in the first quarter of 2023; pre-tax profit fell 27.6% to 6.453 billion euros; operating profit fell to 5.7 billion euros from 8.3 billion euros in the same period last year; operating profit was 7.1 billion euros, up 35% from a year earlier; profit margin was 9.3%. Among them, Audi achieved a profit margin of 10.8%, the best in history, while Porsche, another luxury brand, had a profit margin of 18.2%, Skoda had 8%, and Volkswagen had only 3%. In other words, the Volkswagen brand is one of the lowest profit margins in the group.

Volkswagen executives reportedly plan to increase the profit margin of the Volkswagen brand from 3 per cent to at least 6.5 per cent, and a senior company official said that every percentage point increase in profit margins would have to reduce expenditure by 1 billion euros.

In fact, with the reform of the car market, Volkswagen Group has frequently carried out drastic reforms in recent years, especially in personnel. In May, Volkswagen announced the dismissal of all senior executives except personnel and almost restructured the board of directors of CARIAD, a software subsidiary of Volkswagen Group, because of serious delays in research and development and years of losses. On May 9th, Volkswagen Group announced that Peter Bosch, former Bentley production director, had succeeded Dirk Hilgenberg as CARIAD CEO of Volkswagen software company, which was also in charge of finance, procurement and IT. Volkswagen Group said on its official website: "after a series of technical optimization measures in the past few months, Volkswagen Group has made adjustments to the organizational structure and personnel of CARIAD-- including adjusting the organizational structure of CARIAD, accelerating the landing of the E ³platform (end-to-end electrical and electronic architecture), focusing on the development needs of" software-defined vehicles (SDV) "at the organizational level, and strengthening technical cooperation. And introduce a new leadership and team model. "

At present, Volkswagen Group is accelerating the transformation of electrification in China. According to the plan, Volkswagen Group's brands, including Volkswagen and Audi, will offer more than 30 pure electric models in China by 2030. Among them, Volkswagen is stepping up its investment in the Chinese market in order to expand China's electric vehicle market share and promote the development and production of electric vehicles. On May 28th, Haryogan, chief financial officer of Volkswagen Group (China) Volkswagen Anhui, said that Volkswagen Anhui will continue to invest in Hefei, Anhui, with a total planned investment of 23.1 billion yuan. the total investment in fixed assets between the production base (phase I) and the R & D center is 14.1 billion yuan, and the total investment in pre-market research is about 9.05 billion yuan.

As of press time, Volkswagen Group officials have not announced any information about the above restructuring plan, and the follow-up progress "Automotive Industry concern" will continue to follow.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat