FRANKFURT: German car giant Volkswagen (VW) said on Wednesday (June 21) it was targeting sales growth of 5% to 7% annually until 2027, as the group bets heavily on electric cars and growth in China and the United States.
“While most revenues are still generated in Europe, the growth engines of the future will be China and North America,” CEO Oliver Blume told reporters in a call ahead of an investor meeting at the Hockenheimring racing circuit.
“We want to grow our sales by on average 5% to 7% per year until 2027,” Blume said.
Last year, the 10-brand group – which includes Porsche, Audi and Skoda – reported revenues of nearly €280 billion (RM1.4 trillion).
VW is also aiming for a higher return on sales of between 9% and 11% by 2030, compared with a profit margin of 8% in 2022.
A wide-ranging cost-cutting plan and a “value over volume” strategy handing the group’s individual brands more autonomy, are expected to help achieve the new goals.
But the main focus will be on the electric transition, as the global battle for dominance in the EV market heats up.
The German behemoth announced in March that it planned to invest more than €120 billion in electrification and digitisation projects over the coming five years.
In China, VW has already fallen behind local manufacturers of electric cars like BYD.
Blume acknowledged the “dramatic speed and change of technology and innovations” in China where “a lot of new competitors” have sprung up.
But he said VW was determined to remain “the most successful international car manufacturer in China”.
China is VW's most important market, accounting for around 40%t of the group's overall sales.
Blume said VW currently had a market share of 14-15% in China, and intended to hold onto it -- partly by developing products “in China, for China”.
The company’s “very, very strong” internal combustion engine business in China would help generate the cash flow for “new investments for the intelligent, smart car approach and the technologies of battery electric cars”, Blume said.
North America also has a leading role in the group’s plans for the coming years, where VW wants to “significantly expand” its market share.
VW said it had all the ingredients needed to grow in the region, including through investments in new electric vehicles and a planned factory for battery cells in Canada.
“We have the technology, we have the will and the finances,” Volkswagen CFO Arno Antlitz told reporters, adding that VW could “play a key role in electrifying America”.
The group has previously said it expects that one in every five vehicles sold worldwide will be electric by 2025.
VW delivered around 8.3 million vehicles globally in 2022, of which just over 572,000 were all-electric. – AFP
Source: The Sun Daily
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