VW to Cut Global Production Capacity By 1 Million Cars a Year, CEO Says

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turb0_encapsulator@reddit

for decades Audi was their golden goose that kept them afloat and they have fallen off hard. Meanwhile most of the EVs from VW group are mediocre despite tens of billions invested. The Chinese and Tesla are hard to beat in the mainstream, and BMW and Mercedes seem likely to dominate luxury EVs in Europe. Things are not going to get better at VW group unless drastic changes are made.

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Pseudonym_741@reddit

I do see dozens of VW/Skoda EVs in traffic every day though. Are their margins so bad that they're selling them at a loss or something?

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MiliVolt@reddit

It is costing them a shitload in warranty claims when they break because nobody knows how to fix them. I have one in the shop right now for almost three weeks. After 30 days will be looking for a buyback. Can't make money on a car if you can't fix it and have to buy it back.

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Pseudonym_741@reddit

EVs are disposable like smartphones, yes. You'd have to be out of your mind to actually buy one instead of leasing or getting it as a company car.

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MiliVolt@reddit

They are not any worse than any other car right now. GM forgot how to make a V8 for their Silverado truck and is now offering a free conversion to an EV if the customer is interested. Planned obsolescence is the way all companies are doing it right now.

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PRSArchon@reddit

Nah that guy is just a hater. Almost everything stated in his comment is false.

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desf15@reddit

No, they're still earning pretty penny. Net profit of VW group was around 8-9 billions (EUR) last year. Just with issues at Audi and Porsche this figure represents significant drop versus previous year.

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icona_@reddit

Their new SSP platform and the rivian software really needs to be good.

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Due_Title_6982@reddit

What do you mean? All the VAG brands sold well, not just audi

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turb0_encapsulator@reddit

for many years, nearly all of VW group profit came from Audi, including Lamborghini which is under their umbrella.

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Purrchil@reddit

Lots of bullshit in your post. A lot of companies would want to make 9 billion € profit and have a 28% market share in Europe. The current VW EV’s have taken massive steps and are ahead of many competitors. The current APP engines are very energy efficient.

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SavageNeos9000@reddit

You loser idiot, geely will murder everything with Zeeker

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desf15@reddit

VW (as a brand, not whole group) is 5th best selling BEV manufacturer in the world last year. It seems that their EVs are good enough for people who actually buys them.

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Shark00n@reddit

This means they want more profit per car. Great.

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Recoil42@reddit

They're cutting capacity, not actual production. They're over-capacity by about 2M units, so they want to cut roughly 1M units of capacity. This is an a production efficiency play.

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Shark00n@reddit

The news article literally says VW is targetting higher margins

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Recoil42@reddit

Yes, through efficiency. Not by charging you more per car, as you're trying to suggest.

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aamgdp@reddit

They should instead improved quality so it's matching the price.

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Shark00n@reddit

Let’s see then

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Opening-Cream5448@reddit

Why not both? Covid proved people will pay more if it’s harder to get

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Therunawaypp@reddit

It's not COVID time anymore. Jeep leaned too hard into this strategy and got burned. They really just expect people to pay obscene amounts of money for something that just isn't actually a high end luxury car.

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Opening-Cream5448@reddit

People are though. Average new car price is $50k

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Therunawaypp@reddit

It's because Americans buy huge trucks and not anything even remotely reaosnable

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Recoil42@reddit

It isn't COVID anymore. Cars aren't hard to get.

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Car-face@reddit

This isn't new, and it's a result of a broader strategy to refocus on lower volume, but it's not about "more profit per car" so much as greater efficiency following the collapse of diesel, slow BEV growth and not having anything in between.

As I said 4 years ago (!)

The biggest flip side (specific to VW) is VAG's decision to throw in the towel in terms of volume.

there's going to be a large contraction of their overall production, so their market share will contract over the coming decade (but profit margin should increase).

Ironically that comment was from a thread titled "VW's BEV ambitions are too conservative".

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coexee@reddit

Yeah, pricing strategies are not the only way to do that. Many times they are even less efficient

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strongmanass@reddit

It's coming mainly from Audi and VW brand. They'd be happy with any profit per car.

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Drifty_Canadian@reddit

Company that can't fix the same problems it has had for 20 years. Can't say I'm surprised.

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Purrchil@reddit

But unlike Honda etc they are selling a lot of BEV’s, market share of 28% in Europe. And not like some other manufacturers announcing a electric car together with a other company and then cancel the car before you can even buy it.

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Drifty_Canadian@reddit

True, but I have no use case for a BEV so I'll keep making fun of VW and their plastic water pumps.

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lael8u@reddit

Meanwhile, Honda now use plastic water pumps.

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Drifty_Canadian@reddit

Probably won't fail like VWs lmao.

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AnonymousEngineer_@reddit

The water pump thing is massively overblown.

I own a VW with one of these. You need to get in there anyway every seven years to change the timing belt, otherwise you end up with valves and pistons doing mechanical speed dating.

The pump is driven by that belt. All you or your mechanic needs to do is undo two extra Torx bolts to pop a new pump in and you're good for another seven years. And the OEM pumps aren't expensive even if you buy them from the dealership parts counter.

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JournalistExpress292@reddit

I remember researching these engines when my dad wanted to buy one and later myself, all I really heard about was the water pumps …

… which of course shouldn’t be an issue in the first place, but it is cost effective and easy to replace and that’s about it! One you get it replaced you get a nice smooth engine that’s be reliable for years come.

Now these were for the mid-2010s and forward, not sure about issues on EA888 before then.

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owleaf@reddit

A lot of places get stuck in inertia with an unproductive culture. I once started at (and swiftly left) a big company that was working on a 20 year old project and they were still dealing with big issues from the early years. They couldn’t see that they were getting in their own way.

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ColoradoCyclist@reddit

Oh no! Anyways…

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StrangeSmellz@reddit

Why does this place love the demise and struggles of car companies and then turn around and say no one makes anything intereting anymore and everything is a SUV.

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DZello@reddit

So they’ll make fewer vehicles that people won’t buy. Better sell less than give rebates to get rid of the inventory.

However, they should perhaps try to improve the products...

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Feuerdrachen@reddit

In a sense, they already are. To increase sales, VW introduced a in China, for China strategy to remain a top selling brand in China.

Basically, entire vehicle models designed with their joint venture partners in China for the Chinese market.

If knowledge from this will flow back into models for western markets remains to be seen though.

As for production in western factories, they're unable to copy paste the high degree of automation due to various reasons.

Unions staunchly opposing the closing of unprofitable factories or bigger reductions of the workforce.
The state of Lower Saxony is one of the biggest shareholders of the company (20%). Keeping people employed is also in their interest to not risk instability in towns reliant on the employment of the automotive industry.
Despite that, reductions are ongoing, although very slowly. Currently, employees close to retirement are offered severance payments to fasten this process.

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Weird-Bluebird-132@reddit

Perfect, brilliant, English until you get to this: fasten

The word you want is "hasten," and I'm not trying to shame you. I love bullet points, but they're so often a marker for AI that that one little misuse proves you're human!

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Feuerdrachen@reddit

Oh I did kinda mess that up, thanks for the correction. But that's just what happens when you are scrolling on Reddit instead of trying to fall asleep.

It's sad how we gotta watch out for these little mistakes to make sure that we are talking with actual people and not bots. There are already enough of them running around on Reddit.

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Confident_Season1207@reddit

So they should use forced Chinese labor?

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DZello@reddit

Have you seen Chinese car factories? There’s almost no labour.

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Confident_Season1207@reddit

You think any of that was built willingly? They'll show you what they want you to see

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glymao@reddit

You can just apply for a visa and visit the country, it's not hard. Conversely, try applying a Schengen/US tourist visa from there.

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DZello@reddit

Of course, but Ford’s CEO visited those factories recently. They’re real and Americans are worried. They know they’re unable to compete.

You have way less parts in an electric cars. So less assembly work is needed.

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Such cost-cutting measures will impact approximately 50,000 jobs in Germany by 2030

Really can see German automakers following Detroit route. When automakers are no more making profits, it would hurt their local city economic and even a country.

Right now, we’ve heard that Lower Saxony plans to ask Chinese automakers to buy their VW factories.

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coexee@reddit

Yeah thats bullshit