Volkswagen will increase investment in technologyNovember 15, 2019
The Volkswagen Group is investing more in electric vehicles and digital technology for up to € 60 billion over the next five years, as the auto giant moves further in a downturn in the industry.
The 5-year budget has risen by about 36% compared with the old plan, VW said in a press release on Friday after a meeting of the supervisory board, which represents key stakeholders. Average annual expenses for areas such as hybridization, electric mobility and digitalization are increasing to 12 billion Euros from 8.8 billion Euros.
“We are moving forward in the development of the Volkswagen Group without fear and will use our investments for the future of mobility,” said Chairman Hans Dieter Pöč in a statement.
VW said it would increase investment in electric cars by about 10 percent to 33 billion euros. The automaker plans to build 75 electric vehicles and about 60 hybrid cars. According to VW, new electric vehicles for MEB electric vehicles in the mass market will include an SUV with an identification plate, which is scheduled to begin production in 2022 at a factory in Emden, Germany. The SUV will be about the same size as the VW Tiguan.
VW said that the decision on a new multi-brand plant is supposed to be made before the end of 2019. In September, the automaker postponed a final decision on whether to build a plant in Turkey, amid international criticism of the country’s military operation in Syria and concerns about possible reputation consequences.
The VW cost project is determined by pressure from Tesla, which this week began to actively participate in the electric car race on the German VW field, saying that it would build a plant outside of Berlin. In November, VW lowered its forecast for global car deliveries as demand in key markets, including China’s largest sales region, declined. CFO Frank Witter said VW has cut production plans by 900,000 cars and is ready to cut them even further to avoid bloated stocks. He acknowledged that weaker market development will affect future budget planning.
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