Volkswagen aims to become the largest car manufacturer in the world by 2018, and has lined up even more investments and growth targets during this period. Global investments have been planned by Volkswagen Group to an extent of €84.2 billion (INR 7.15 lakh crores) by 2018.
Out of these investments, a major chunk will go towards the production of new range of fuel efficient cars, the development of enhanced technologies and models that conform to strict environmental standards. The announcement of these increased investments comes at a time when the auto scenario is not as promising and hence is seen as a positive factor as the company strives to maintain its leadership position in global markets.
Audi is also planning record breaking investment of close to €22 billion in the coming five years. Global expansion and new models is the company’s target. The company’s German sites will also benefit from this increased investment with more than 50% planned for Ingolstadt and Neckarsulm, while the company also plans added job opportunities globally.
Investments and upgrades in technology besides modernization of plants will give the company a boost on its way to the top. Volkswagen, currently in No 3 position hopes to replace Japan’s Toyota as world’s leading auto makers by 2018 and will continue with this added investment despite unfavorable and uncertain economic environment. For more information, scroll through the press release below.
Volkswagen has created about 123,000 new jobs since 2007, including 44,000 in Germany
• Human Resources Board Member Dr. Neumann: Group continues to invest strongly in junior staff
Since 2007, the workforce of the Volkswagen Group has grown by about 248,000 employees, representing a rise of 76 percent. This increase includes 123,000 new jobs created throughout the world and around 125,000 employees of companies newly integrated into the Group. As of the end of 2013 (figures for November 30, 2013), the Volkswagen Group has about 573,000 employees, including some 260,000 in Germany. This is more than ever before.
“Volkswagen continues to be successful. Our cars make customers enthusiastic and this success is also reflected by employment,” said Dr. Horst Neumann, Member of the Board of Management of Volkswagen Aktiengesellschaft responsible for Human Resources. “The number of employees has grown strongly over the past six years. At the same time, we have also significantly improved our productivity and earnings.”
In 2007, when the Group adopted its Strategy 2018 with a new management team, the Volkswagen Group had around 325,000 employees throughout the world. Some 573,000 people now work for the Group. This increase of 248,000 employees includes about 123,000 newly created jobs, almost 44,000 of them in Germany. 125,000 employees came to the Group with Scania, MAN, and Porsche Holding Salzburg, as well as Porsche AG and Ducati.
“The Volkswagen Group is a strong and reliable motor for employment in Germany and Europe as well as throughout the world. Management and employee representative bodies have successfully integrated the new employees and the new brands in the Volkswagen family. This is a respectable achievement,” said Human Resources Board Member Dr. Neumann.
“Volkswagen offers all employees individual support, secure jobs and good remuneration. Surveys confirm that we are among Germany’s top employers. We are investing strongly in our junior staff and safeguarding the future-oriented nature of the Group. In future, Volkswagen will continue to offer performance-oriented young people outstanding career entry and development opportunities,” Dr. Neumann emphasized.
As of the end of November, the Volkswagen Group employed about 260,000 people (end of 2012: 249,000) in Germany alone, with the brands Audi, MAN, Porsche, Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Volkswagen Financial Services AG. Throughout the world, about 573,000 people (end of 2012: 550,000) were employed by the Group.
Volkswagen Group further strengthens innovation and technology leadership
• €84.2 billion for new models, environmentally friendly technologies and production
facilities over the coming five years
• Chinese joint ventures to invest €18.2 billion in the period from 2014 to 2018
• CEO Winterkorn: “Powering our way to the top.”
The Volkswagen Group will invest a total of €84.2 billion in its Automotive Division over the coming five years. Over two-thirds of the total investment amount will continue to flow into increasingly efficient vehicles, drives and technologies, as well as environmentally friendly production. This is the result of the Group’s investment planning for 2014 to 2018 discussed by the Supervisory Board of Volkswagen Aktiengesellschaft at its meeting on Friday. “We will continue to invest strongly in our innovation and technology leadership, despite the uncertain economic environment. This will once again significantly boost the Group’s competitiveness and safeguard its future. I am convinced that this will give us extra power on our way to the top”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft.
Investments in property, plant and equipment in the Automotive Division will amount to €63.4 billion. Average annual investments in property, plant and equipment will be around €0.5 billion less than in the planning approved in 2012 for the period from 2013 to 2015. “In times like these, our disciplined cost and investment management will remain a cornerstone of our activities”, said Winterkorn. The lower level of investment in property, plant and equipment is due among other things to the postponement of construction projects and capacity optimization. Investments in products and technologies remain unaffected by the decline. The ratio of investments in property, plant and equipment (capex) to sales revenue will remain at a competitive level of between six and seven percent in the period from 2014 to 2018.
Alongside investments in property, plant and equipment, the plans also include capitalized development costs of €19.5 billion and other investments including for financial assets in the amount of €1.3 billion. The increase in capitalized development costs as against previous planning is due to upfront investments in connection with the Group’s CO2 targets.
More than half of the investments in property, plant and equipment (almost 60 percent) will be made in Germany. “The amount being invested in Germany is a strong testament to the fact that our home locations will continue to play a key role in the globally positioned Group going forward”, said Winterkorn, adding: “At Volkswagen, we are clearly committed to Germany as a manufacturing and development location. At the same time, we are also stepping up our investments in the markets outside Europe so as to further increase our global presence and capability.”
According to Bernd Osterloh, Chairman of the General and Group Works Councils, “Volkswagen’s focus on future viability and sustainability also extends to its investments – and this applies to both products and production. This is good for our locations and good for jobs. It is a positive signal, particularly in light of the difficult market environment.”
At €41.2 billion (roughly 65 percent), the Group will spend a large proportion of the total amount to be invested in property, plant and equipment in the Automotive Division on modernizing and extending the product range for all its brands. The main focus will be on new vehicles and successor models in almost all vehicle classes, which will be based on the modular toolkit technology and related components. This will allow the Volkswagen Group to systematically continue its model rollout with a view to tapping new markets and segments. The high level is due among other things to upfront investments relating to the changeover to Euro 6, which means completely revamping the Group’s range of vehicles and engines. In the area of powertrain production, new generations of engines will be launched offering additional enhancements to performance, fuel consumption and emission levels. In particular, the Group will continue to press ahead with the development of hybrid and electric motors.
In addition, the Company will make cross-product investments of €22.2 billion over the next five years. These include spending to expand capacity. Other investment focuses are press shops and paintshops, reflecting the Company’s high quality targets and the continuous improvement of its production processes. Investments outside production are mainly planned for the areas of development, quality assurance, sales, genuine parts supply and information technology.
The joint ventures in China are not consolidated and are therefore also not included in the above figures. They will invest a total of €18.2 billion in new production facilities and products in the period from 2014 to 2018. These investments will be financed from the joint ventures’ own funds.