A report in Financial Times Deutschland says that Volkswagen is planning to reduce costs in China and to introduce new management structures at Shanghai Volkswagen (SVW), a joint venture formed with Shanghai Automotive Industry Corporation (SAIC), in order to ensure that Shanghai Volkswagen becomes the leading manufacturer in China again.
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The company’s share of the Chinese market amounted to only 16 per cent in June, having reached one-third last year, the newspaper said.
SVW is aiming to reduce its expenditure by Yn4.2bn (around 410m euros) this year and next year; this would correspond to a reduction of 14 per cent.
FTD reported that activities in the field of logistics are now to be outsourced gradually, while imports of components are to be reduced in favour of parts produced in China. The restructuring of the company is expected to take three years. SVW says that the changes will enable it to react more quickly and systematically to increasing competition. The company is thought to have experienced difficulties due to the fact that production costs were too high.
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