Volkswagen has it would cut costs and reduce investment after profits more than halved last year and sales of its latest Golf V hatchback got off to a weak start.
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“Volkswagen is responding to the ongoing uncertain outlook for the global car market with an extensive package of measures,” Europe’s biggest carmaker said in a statement cited by the Reuters news agency.
The program, named ‘ForMotion’, reportedly was approved at a meeting of VW’s supervisory board on Friday and further details will be given at the firm’s annual news conference on March 9.
“Our aim with this is a rise in sales, a decline in costs and a reduction of investment in the business,” VW chief executive Bernd Pischetsrieder said in the statement, according to Reuters.
The news agency noted that Volkswagen has invested heavily in recent years in luxury models such as the VW Phaeton and in legendary brands such as Bentley and Bugatti – investments which thus far have failed to pay off.
Critics reportedly say that while focusing on designer marques, the ‘the people’s car’ maker has lost sight of bread-and-butter models such as the Golf whose fifth generation took to the road late last year but has failed to ignite the enthusiasm of drivers or critics.
VW is offering German buyers free air conditioner option packages in an effort to boost flagging sales.
Reuters said that VW’s supervisory board also approved an earlier management proposal that the group’s annual payout to shareholders should be reduced by 19% – the 2003 dividend on ordinary shares will be cut to €1.05 from €1.30 the year before while the payment for preference shares will fall to €1.11 from €1.36 in 2002.
