Thursday, 12 October 2017
VW's plans to fund EVs
Reuters reports that Volkswagen has a plan to improve its profitability.
By creating a new car parts business without the constricts of the high cost of in-house labour rates, Volkswagen could improve its profits and therefore release funds that would see it move towards electric vehicle production.
It is reported that Volkswagen will move the production of its parts, by bringing together the manufacturing of parts, including engines and transmissions at 56 plants on five continents with a total of 80,000 staff.
The plan was drawn up last year but has no won approval from the Executive Board. The new entity 'will bundle these activities, organize them even more efficiently, strengthen in-house competences in specific areas, and drive forward the transition to electric cars throughout the group,' the carmaker said in its statement.
'We believe this is a key game changer for the VW equity story,' Jose Asumendi, J.P. Morgan analyst said, adding the move entails a growing likelihood that VW will spin off or streamline component businesses in the medium term.