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Volkswagen to cut new vehicle development times from 50 to 36 months

Gajanan Kashikar Updated: December 27, 2023, 11:35 AM IST

To achieve a positive earnings contribution of ten billion euros by 2026, Volkswagen has implemented several performance-enhancing and cost-saving measures. One key initiative involves reducing new car development times from 50 months to 36 months, generating over a billion euros in savings by 2028.

The company will also optimise the number of test vehicles required for technical development, cutting costs by 400 million euros per year. While streamlining under the "Accelerate Forward/ Road to 6.5" program will impact development times, Volkswagen assures no compromise on quality or safety standards.

Other program elements include enhancing procurement services (saving 320 million euros), boosting after-sales business (250 million euros/year), and optimising production times (200 million euros/year). These measures will be implemented by 2024, aiming to improve the operating return on sales by 6.5 per cent by 2026.

Starting in January 2024, Volkswagen will also implement cost-cutting measures in the administrative department, including downsizing staff by 20 per cent and continuing the current hiring and salary freezes.

Despite the initial impact on development times and workforce, Volkswagen believes the "Accelerate Forward/ Road to 6.5" program will ultimately position the company for long-term profitability and sustainable growth.

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Price (Ex-Delhi)
Starts Rs 9.99 Lakhs
Displacement
1353cc
Transmission
Automatic
Max Power(ps)
115
Max Torque(Nm)
242
Mileage
-NA-
Price (Ex-Delhi)
Starts Rs 1.38 Crore
Displacement
2998cc
Transmission
Automatic
Max Power(ps)
350
Max Torque(Nm)
530
Mileage
-NA-
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