Volkswagen Group plans to save 1.9 billion euros ($2.8 billion) by cutting model variants and trim options from the Volkswagen brand’s passenger cars, SUVs and commercial vehicles as the cost of the emissions scandal becomes clearer.
Volkswagen chief labour representative Bernd Osterloh told reporters that reducing manufacturing complexity was a simple way to make big financial savings as it attempts to offset the cost of recalls and fines.
“We from the works council have long flagged the huge range of model variants and different components,” Osterloh said.
“That brings enormous complexity and adds to costs, for example, for logistics. We can take out costs there on a large scale and don’t have to talk about job cuts.”
Bloomberg reports Volkswagen’s senior executives will also accept lower bonuses to assist in the company’s wider savings effort.
The brand is targeting 5 billion euros ($7.4 billion) in savings through efficiency gains. It’s also planning to cut investment into the brand by 1 billion euros ($1/5 billion) per year.
Volkswagen currently estimates the emissions scandal will cost the brand 8.7 billion euros ($12.8 billion).
Volkswagen has admitted that approximately 11 million vehicles powered by its 1.2-, 1.6- and 2.0-litre diesel engines sold around the world have emissions test cheating software installed. Another 85,000 Volkswagen, Audi and Porsche vehiclesequipped with the company’s 3.0-litre V6 diesel sold in the US have similar emissions control devices, while Volkswagen has also revealed that 800,000 vehicles could be affected by an issue causing CO2 emission “irregularities”.
Volkswagen last week outlined how it plans to fix the 1.6- and 2.0-litre diesel engines fitted with emissions testing defeat devices.