Volkswagen AG announced that it will invest €51.6 billion ($70 billion USD) in its automotive division in the next 5 years as it aims to top Toyota as the No.1 global automaker in sales and profitability by 2018. Investments in property, plant and equipment will account for €41.3 billion, of which more than half of this (57 percent) will be invested in Germany alone.
“The Volkswagen Group will help shape the technological turning point in key areas of the automotive industry and, to do this, will continue investing in environmentally friendly technologies, efficient drives and new models,” said said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG. “We are systematically pursuing the goals of our Strategy 2018 to further increase our profitability and to make Volkswagen the world’s most future-proof automotive group. The investment program we have now resolved will play a significant role in this.”
“These investments underline Volkswagen’s goal of becoming the leading automobile manufacturer for its customers, employees and shareholders, because our investments are aimed precisely at these three groups. New, attractive and high-quality models for our customers as well as investments in our locations safeguard our colleagues’ jobs. Our shareholders also profit from this, not least because at Volkswagen we all agree that every investment must pay off”, stressed Bernd Osterloh, Chairman of VW’s Group Works Council.
At €27.7 billion, the Group will spend most of the total amount to be invested in property, plant and equipment in the Automotive Division on modernizing and extending the product range of all its brands. The main focus of the investment will be on new vehicles, successor models and derivatives in almost all vehicle classes based on modular technology. This will allow the Volkswagen Group to systematically continue its model rollout with a view to tapping new markets and segments, the company said in a statement.
– By: Omar Rana