The Volkswagen Group is aligning investment activity in its Automotive Division with the current situation.
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The aim is for planned investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs (capex), to be capped at approximately 12 billion euros next year. The average figure for the previous planning period was about 13 billion euros per year.
“We are operating in uncertain and volatile times and are responding to thisâ€, said Matthias Müller, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg on Friday, after a regular meeting of the Company’s Supervisory Board.
“We will strictly prioritize all planned investments and expenditures. As announced, anything that is not absolutely necessary will be cancelled or postponed.â€
Müller announced the intention to increase expenditure on alternative drive technologies by approximately EUR 100 million next year.
“We are not going to make the mistake of economizing on our future. For this reason we are planning to further increase spending on the development of e-mobility and digitalizationâ€, he said.
The core focus will be on rapidly developing electric drive systems for the Volkswagen Passenger Cars, Audi and Porsche brands.
Most of the capex is earmarked for new products, the continuing rollout and enhancement of the modular toolkits, and the completion of ongoing investments to expand capacity. Examples include product start-ups such as the next-generation Golf, the Audi Q5, the new Crafter plant in Poland, as well as upfront expenditures for the modular electric toolkit (MEB).
Approximately 50 percent of capex will be spent on the Group’s 28 locations in Germany.
Müller also outlined the first projects as examples where investments are being spread out to a greater extent or cut back. For example, construction of the planned new design center in Wolfsburg is being put on hold, saving approximately EUR 100 million. In addition, the construction of a paint shop in Mexico will be reviewed. ■