VW Hikes Financial Targets, Vows to Accelerate Brand Turnaround

Volkswagen AG says it now expects its profit margins will reach as much as 5% by 2020, up from its initial forecast of 2.5%-3.5%.

The company also declares it will speed up efforts to streamline the company’s mainstay VW brand as it continues to cut costs and rush a fleet of electrified models to market. The unit calls the overhaul Transform 2025+.

VW aims to sell at least 100,000 plug-in hybrid and all-electric vehicles. The brand plans to spend nearly €23 billion ($27 billion) over the next five years on manufacturing updates and new products, including €6 billion on advanced technologies and electrification systems.

Under the Transform initiative, the VW brand introduced five all-new models and significantly updated five others this year. The unit plans to continue that pace through 2020 as part of the marque’s largest new-model rollout ever.

Between now and 2020, the company says its missions will be to boost SUV sales, strengthen its brand position in all major regions, revive sales in the Americas, reach €3.7 billion ($27.1 billion) in annual cost savings and hone its skills in such areas as digitalization and e-mobility.

By 2020 the brand intends to shed 23,000 jobs in Germany through buyouts and early retirements. But it also expects to create 9,000 new positions in “future-oriented” areas.