Can Volkswagen cost-cut its way out of a crisis? The automaker plans to shut several German plants and axe tens of thousands of jobs. At this point, though, the question is no longer whether VW needs to restructure but whether the axe will be sharp enough to excise its troubles.
The German group is facing a car crash of problems, as a series of profit warnings and, more recently, a 64 per cent decline in third-quarter earnings exemplifies.
China is a key issue as domestic carmakers churn out cheaper and better vehicles. VW’s deliveries in the region fell by 10 per cent in the first nine months of the year. The contribution from its joint ventures in China this year will be some €1.6bn of “proportionate operating income”, thinks VW, around half the amount in 2022.