German Volkswagen executive: Core brand Volkswagen is "no longer competitive"

November 28 news: Volkswagen executives warned on Monday that the company's original brands are "no longer competitive" due to high costs and low productivity. "Due to many of our preexisting structures, processes and high costs, our Volkswagen brand is no longer competitive," Thomas Schaefer told employees at a meeting at the company's headquarters in Wolfsburg, Germany, according to a post on the company's internal website.

A Volkswagen spokesman said the company has been working hard to improve the financial performance of the Volkswagen brand. The process is particularly important as parent company Volkswagen Group transitions toward producing more electric vehicles.

The Volkswagen brand was born in 1937. The Volkswagen Group also owns many other car brands such as Porsche and Audi.

A company briefing shows that the mainstream brands of the Volkswagen Group include Volkswagen, Czech Skoda and Spanish Seat. The Volkswagen brand, which sells the most cars by far, had the lowest operating margins in the first three months of the year.

According to an investor presentation, Volkswagen Group hopes to increase the return on sales of the Volkswagen brand to 6.5% by 2026 from 3.6% last year.

Volkswagen said in public speeches that the company is working hard to improve the performance of all its mainstream brands, including improving the differentiation between brands and cutting unnecessary expenses.

At a meeting held on Monday, Gunnar Kilian, a member of the Volkswagen Group’s human resources committee, said: “We ultimately need to be candid and courageous enough to abandon those things that have been repeated within the company and abandon those burdens that will not bring good results.”

Volkswagen Group, one of the world's largest carmakers, is in talks with the company's works council over a plan to cut costs at the Volkswagen brand, a first step toward improving efficiency across the group as it transitions to electric vehicles.

Volkswagen Group executives also told employees on Monday that the company's 10 billion euro ($10.9 billion) savings plan would include layoffs and other measures.

Volkswagen Group has previously said it plans to use the "demographic curve" to reduce its workforce. Killian explained that this mainly involves semi-retirement or early retirement agreements with some employees.

Killian also added that most of the 10 billion euros savings plan will be achieved through measures other than layoffs, and full implementation details will be determined before the end of the year.