Financial chief of Volkswagen paints a dismal picture
In an interview with the "Braunschweigische Zeitung", Volkswagen's CFO Arno Antlitz addressed the significant challenges the company is currently facing. Antlitz sent a clear message to Volkswagen's workforce, urging the need to improve the competitiveness of German factories and accelerate innovation to navigate the complexities of the changing market.
Volkswagen is grappling with growing competition from Chinese automakers such as BYD, Nio, and Chery. These companies are offering affordable, high-tech electric vehicles (EVs) that are eroding Volkswagen's market share, particularly in Europe and China. Additionally, the company is contending with disruptive U.S. tariffs on European-made EVs that are hurting profitability and raising operational costs.
The pressure from both the U.S. and China is mounting for Volkswagen. These crises have occurred at a time when the carmaker was losing market share in important markets. Business in China played a role in the profit decline, as the company's profit plunged by a third in the second half.
To tackle these issues, Antlitz is focusing on accelerating innovation, managing the complexity of the brand portfolio to avoid internal cannibalization, and optimizing costs to preserve profitability during this market transition. Volkswagen is investing heavily in electrification and software (notably a €30 billion R&D investment in its CARIAD software unit) to boost competitiveness.
The CFO is also navigating tariff impacts by lobbying for reductions and considering adjustments such as cost absorption or price increases. Despite these pressures, Antlitz emphasizes the resilience shown in recent quarterly growth and the importance of continuing to expand EV offerings to maintain market relevance.
Antlitz did not specify a new date for achieving cost targets, which were previously set for 2030. He also criticized Volkswagen's crisis management so far and warned that Chinese competition could become a problem in the domestic market. Chinese competitors could potentially enter the German market within one to two years, according to Antlitz.
More details on Antlitz's message to Volkswagen's workforce and his criticism of the carmaker's crisis management can be found in the article of the "Braunschweigische Zeitung". Antlitz believes the Trump tariffs are here to stay and that Volkswagen needs to step up its efforts to adapt to this new reality.
A major tech issue is affecting thousands of Volkswagen vehicles, according to a recent report. This new challenge adds to the already complicated landscape that Volkswagen is navigating as it transitions to a more electric future.
[1] Braunschweigische Zeitung article [2] Volkswagen press release [3] Bloomberg article [4] Reuters article
- Volkswagen's CFO, Arno Antlitz, acknowledges the industry-wide challenge posed by Chinese automakers like BYD, Nio, and Chery, particularly in the finance and business sectors, as they offer affordable, high-tech electric vehicles (EVs) that are impacting Volkswagen's market share in Europe and China.
- In an attempt to maintain competitiveness, Volkswagen is investing significantly in electrification and software, such as its €30 billion R&D investment in the CARIAD software unit, which falls under the transportation sector.
- Antlitz also expresses concerns about Chinese competitors potentially entering the domestic German market in the near future, posing a threat to the automotive sector in Germany.
