BERLIN (Reuters) – Volkswagen set its new financial targets on Wednesday, aiming for annual revenue growth of 5 to 7% by 2027 and a return of 9 to 11% by 2030.
The automaker has established “performance programs” for each brand, allocating capital to them with a fixed specific return target on sales, while delegating responsibility for achieving those targets, executives told a conference. press on the occasion of the group’s investor day.
“If you look at how Volkswagen operated in the past, we often had fixed cost growth and we wanted to exceed those fixed costs,” said chief financial officer Arno Antlitz.
“We believe that as part of the transformation, we need to change this strategy to adopt a value-based approach rather than volume, be very disciplined in terms of fixed costs and investments and focus instead on the value,” he added.
Volkswagen has slightly reduced its electric vehicle sales target in China, as sales of combustion-powered cars still provide strong revenue for the automaker, which wants to focus on margins, the chief financial officer said.
The new revenue growth target represents a clear improvement on the performance of Volkswagen, which has posted revenue growth of only 1.1 to 1.2% per year for the past two years, and by 0.7% in 2018-2019 before the pandemic.
Under the new performance programs, each brand will have a defined target for operating profit, return, net cash flow, cash conversion rates, as well as the investment ratio, Volkswagen said in a statement, adding that it would tie executive bonuses to goal achievement.
(Report Victoria Waldersee, Jan Schwartz; Nathan Vifflin, edited by Kate Entringer)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
