A top politician in Volkswagen’s home state has criticised the car maker for spending too much developing luxury cars.
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The state premier of Lower Saxony, Christian Wulff, told Reuters VW should focus on its core volume models.
“It has focused too strongly on luxury cars,” Wulff reportedly said at a party conference in Leipzig.
According to Reuters, Wulff said the company had invested too heavily in projects like its Phaeton executive saloon, which has not sold well, and the Lamborghini, Bugatti and Bentley brands, although it now appeared to be back on the right path.
Reuters noted that the state of Lower Saxony holds 20% of Volkswagen and Wulff sits on its supervisory board.
The report said that VW expects its profits to more than halve this year and has warned it will take a hit of several hundred million euros to write off some of its capitalised research and development costs, suggesting hundreds of million euros of investment will never generate a return.
According to Reuters, the company has said the charge is related to investments including the Phaeton platform, which also provides the basis for its Audi A8 executive saloon and Bentley coupe.
VW has signalled a tighter rein on spending under its new finance chief, Hans-Dieter Poetsch, although chief executive Bernd Pischetsrieder has said the company plans to introduce a new luxury model by 2007 to compete against BMW’s 5-series saloon, Reuters added.
