It will take 36 months to create new machines instead of 50
Volkswagen wants to save an additional 10 billion euros by 2026. To achieve this, the company is cutting costs wherever possible.
As part of the Accelerate Forward | Road to 6.5 program, the company is taking action at all levels. CEO Thomas Schaefer recently said that Volkswagen “is no longer competitive.” Cost cuts should help get the automaker back on track.
First of all, the company will reduce the time required to develop a new car from the current 50 months to just 36. Volkswagen insists that three years will be enough to bring the car to market «without sacrificing quality and safety». This measure alone should help the company save more than 1 billion euros by the end of 2028.
Another important change in the way of working will be the assembly of much fewer test cars. During the vehicle's 36-month development phase, 50 percent fewer prototypes will be built for evaluation purposes. Again, Volkswagen says this radical decision will not have a negative impact on quality. This measure is estimated to provide annual savings of €400 million.
Other measures to improve Volkswagen's fortunes will include more cost-effective purchasing services, improved after-sales business and further optimization of production lead times. The combined annual savings of these three methods are projected to be €770 million.
The most sensitive part of the massive austerity plan involves what VW calls “socially acceptable job cuts.” Partial retirement will be offered to employees born in 1967, as well as disabled people born in 1968. The German company intends to reduce administrative personnel costs by 20%.
VW says these measures will begin to bear fruit next year.