Volkswagen’s Strategy 2025 Focuses On A Greener Future For The Company
Volkswagen AG (OTCMKTS:VLKAY) has announced its ‘Strategy 2025’, which focuses on the automaker’s long-term plans to derive profitable growth and, basically, hopes to shake-off the dieselgate scandal. One of the main highlights of Volkswagen’s strategy is its push for electric vehicles, which are quite the rage these days, fueled by growing environmental consciousness and alarming pollution levels. In fact, moving towards more efficiency makes more sense for the company at a time when the emissions scandal looms large. From a brand whose image has been tainted on the back of falsification of emissions data, Volkswagen is now looking to do damage control by being more efficient and “environmentally friendly” than ever before.
Volkswagen’s leap into new technologies under Strategy 2025 is expected to warrant investments in the double-digit billion range. Cost-cutting at the namesake passenger car brand, bundling together the company’s fragmented parts operations, and re-alignment of its massive 12-brand business, could help Volkswagen finance its long-term goals. The German auto giant set aside €16.2 billion ($18.4 billion) in charges related to the emissions scandal last year.
Emphasis on cleaner technologies bodes well for Volkswagen, because this could be where the automotive growth is heading. Electric vehicles represent ~0.6% of all global passenger car stock presently, but this category continues to grow by a strong percentage year-over-year (70%, 53%, and 70% in 2015, 2014, and 2013, respectively). [1] More than half a million plug-in electric vehicles were delivered to customers worldwide last year. On the other hand, luxury wings Audi and Porsche are also pushing to penetrate the electric vehicle market. Audi plans to bring an electric SUV to market by 2018, work on another electric model after that, and expects EVs to form one-third the company’s U.S. sales by 2030. [2]
Developing electric vehicles, establishing mobility solutions, and dabbling in autonomous driving, could help Volkswagen shrug off the negative impact of the dieselgate scandal — both tangible in terms of fines, settlements, and recall charges, and intangible in terms of hurt customer sentiment.
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