«The Most Critical Year Of The Crisis Lies Ahead Of Us»

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

The crisis on the global automobile market is far from over. The VW board fears that the worst is yet to come.

At Volkswagen, there is growing concern about a very long car crisis. According to information from the industry and business newspaper Automobilwoche, the board of directors around CEO Martin Winterkorn fears that the weakness of the vehicle business will drag on for much longer than previously expected. “The most critical year of the crisis lies ahead of us!”, Quoted the “Automobilwoche” in a letter from CFO Hans Dieter Pötsch to management.

Elimination of an entire year

According to this, VW expects the world car market for the period from 2007 to 2018 to be 67 million vehicles lower than earlier estimates. “And that means the omission of a complete calendar year of the global market in this planning period”, quoted the “Automobilwoche” VW sales expert Detlef Wittig from the same letter. “This effect”, continues Wittig, “leads to lower group deliveries to customers in the long term compared to the preliminary planning and thus to a lower financial result”.

Declining sales in the core market of Europe, considerable excess capacities, high price pressure, insolvency risks for suppliers and dealers as well as an ongoing deterioration in the product mix towards smaller vehicles put the Volkswagen result “under additional pressure”. The crisis is “not over yet”, is the conclusion in the passage from CEO Winterkorn. At the same time, Volkswagen is sharpening the goals of its “Mach 18” growth strategy, with which Toyota is to be replaced as the world's largest automaker by 2018. VW is not just sticking to the specifications, Winterkorn told the manager. "We are raising the bar even higher." Above all, VW now has to “sell cars profitably and gain market share with full force and the greatest possible consistency,” demanded the VW boss. (dpa)