Volkswagen Group's chief executive, Oliver Blume, has promised that the Group will invest €180 billion between now and 2027. The money will be targeted at what Blume calls 'the most attractive profit pools.'
2023 will be a decisive year
Those include electric cars, digital technology, and the Group's operations in China and the US. Blume said: "Last year was an important year for the Volkswagen Group. We made headway on executing our strategy, despite extreme headwinds. EVs accounted for a record seven per cent share of total deliveries - a significant milestone that we will build upon this year as our popular model range continues to grow. In line with our Ten-Point Plan, we took important steps to execute our strategy, including new product strategies for our brands, the streamlining of our platforms and a revised software roadmap. We continued to strengthen our global presence by concentrating the production and development of our excellent products and technologies even more locally in the markets. 2023 will be a decisive year for executing strategic goals and accelerating progress across the group."
Blume praised Volkswagen's 660,000 global employees for their efforts to pull off a massive restructuring and cost-cutting plan, which has delivered VW Group a profit of €22.5 billion before special items, or €15 billion after tax. Despite the sheer size of those numbers, the Group's chief financial officer, Dr Arno Antlitz, described the results as "a solid result in a difficult and challenging environment. It's thanks to the robustness of our business and the willingness of our teams to change."
Those profits will fuel huge investments focused largely on EVs and digital services. Through Volkswagen's Cariad operations in China, it's developing an in-car app store through which drivers can buy and subscribe to services and apps. The system will appear first in an unspecified Audi model before spreading to other marques and models.
The investments will also go towards expanding and improving Volkswagen's software systems - which Blume acknowledged has been a point of heavy criticism in recent years - as well as a hefty €15 billion investment in new battery 'gigafactories' in Germany, Sweden, Valencia in Spain, and a just-announced factory in Ontario, Canada.
By 2030, Blume wants 80 per cent of Volkswagen's sales in Europe to be fully electric models, and he promised that this year would see a 50 per cent cut in CO2 emissions from the group's passenger cars and light commercial vehicles.
Expansion in the US market
Blume also wants to improve Volkswagen's sales and performance in the US market, which has traditionally been a weakness for the Group. To do that, Volkswagen is reviving the classic US Scout brand for 4x4s and pickups and has confirmed that Scout will have a new factory in South Carolina. "It's a unique opportunity to enter the pickup and truck segment. A chance to strengthen our presence," said Blume.
This year, the Volkswagen Group will launch several key new electric vehicles, including the long-wheelbase version of the wildly popular ID.Buzz, the ID.7 saloon, a revised version of the ID.3, the Cupra Tavascan, and the Audi Q8 e-tron - a rebadged and updated Audi e-tron quattro.
Notably missing from that list were the all-electric Porsche Macan and the new Audi A6 e-tron, both of which use the new PPE electric car platform and have been delayed by problems with software development.
Beyond those models, Blume promised a major revamp for Volkswagen's electric car line up. "We have a major advantage to have a great product portfolio and a brand heritage that sets us apart from the new entrants in these segments," said Blume. "Our icons, the Golf, the GTI, the Tiguan, the 911, the Quattro - these outstanding iconic products, which I can believe can be transformed. The 911 will get hybrid power for example. Golf and Tiguan have huge opportunities to become electric variants. ID has started very successfully, and we have many good ideas for the future."
However, Blume wouldn't be drawn on exactly what was coming or when and is being cautious about announcing new models that take too long to reach showrooms, as with the ID.Buzz. "Products will come as a surprise when we announce them. When we talk about products, they should be available in the short and medium term for our customers."