2023 Author: Eric Donovan | [email protected]. Last modified: 2023-05-21 15:44
VW boss Martin Winterkorn sees tough months ahead of the company. On the way to becoming the world's largest manufacturer, the dampers are more than compensated for by the Chinese market, especially in Europe.
Europe's largest car maker, Volkswagen, is slipping more and more into the whirlpool of the sales crisis on its home continent. "The next few months will be anything but easy," said VW boss Martin Winterkorn on Thursday at the general meeting in Hanover in front of the shareholders. The downturn in the domestic market could soon also have an impact on employees. The company needs “a lot of flexibility in production and on global markets” in the coming months, said Winterkorn, using the first crisis vocabulary - unlike in the previous year.
VW increases sales in the first quarter
The worldwide sales of the Wolfsburg-based company had risen by almost five percent in the first three months of this year. In Europe, however, VW also had to give up a lot, and the first quarter was significantly worse on the earnings side than a year earlier. Other manufacturers are already suffering from expensive overcapacities in Europe - Ford, Opel and Peugeot-Citroën are even planning to close individual plants.
VW is far from that, but the first dampers are also visible there. For example, VW recently cut back Passat production at its plant in Emden. After the employees had already received an extra week of Christmas vacation in December, the Easter break was also extended. In the USA, 500 temporary workers from the Passat production facility in Chattanooga (Tennessee) have to leave. Perhaps VW could soon endeavor to counteract the idle situation in this country - for example by emptying working time accounts.
European crisis is also putting pressure on profit at VW
Winterkorn said of the outlook: " Europe in particular remains a shaky candidate." New registrations in the EU have been on the downside for a year and a half in view of the debt crisis; 2012 was the weakest year in 20 years.
And the lull in Europe is likely to continue to depress Wolfsburg's profits in the future. "The competitive pressure remains high and continues to rise," said Winterkorn. There is currently a discount battle on the European car market.
VW wants to expand its market leadership role in China
For Winterkorn, further growth in new registrations in China is a foregone conclusion for years. "The total market will surely grow to over 20 million by 2020." VW wants to defend its position as the Chinese market leader. "We want a market share of 20 percent - at least."
In 2012, VW delivered 2.8 million cars and light commercial vehicles in its largest single market, China. That was a fifth of the market share (20.8 percent). According to VW accounts, the huge Asian empire had around 13.5 million newly registered cars in 2012. According to Winterkorn, VW would have to sell at least four million vehicles in China in 2020. VW is building seven of its ten plants currently planned around the world and, according to earlier information, plans to have factory capacities of more than four million vehicles as early as 2018.
Expensive recall campaign for VW in China
Winterkorn rejected concerns about being too dependent. China's centralized political system, the major environmental problems and the social gradient in society also repeatedly lead to criticism of the gigantic empire. Winterkorn said: “You always have risks when you enter new markets. But the chances are much greater. And that's why we're continuing to invest in the Chinese market."
The recent quality problems in China were part of the risk. “It's normal business. If you sell 2.8 million vehicles a year, something can always happen,”said Winterkorn. In its largest recall campaign to date in China, the group recently brought 384,000 cars to the workshop due to problems with the direct-shift gearbox. The trouble with the circuit is expensive for VW. In the key figures for In the first quarter of 2013, the slump in operating earnings was also due to “provisions in the passenger car sector”. This is essentially the cost of the recall in China, which VW calls a voluntary measure. (dpa)