Volkswagen aims to have an additional $11 billion in its coffer by 2026. Keeping an eye on this goal, the German auto giant is streamlining its new car development strategy. The automaker claims to have reduced new car development time to three years. Also, Volkswagen plans significantly fewer test vehicles during its new car development programs. It believes, these measures will begin to bear fruit in 2024 and will help the OEM to achieve its target by cutting vehicle production costs.
Volkswagen has said that it has adopted a new program, christened the “Accelerate Forward/ Road to 6.5”, under which the automaker has been adopting some major changes across different levels of the company. Interestingly, this move comes after Volkswagen CEO Thomas Schafer recently said that the carmaker is no longer competitive. Clearly, with these moves, VW is aiming to reduce expenditures in an attempt to put the company back on track.
Currently, a new car development process takes around 50 months, which Volkswagen claims to have reduced to 36 months. The carmaker claims that three years will be enough to bring a new car to the market without sacrificing its quality or safety. VW estimates this move will help the company to save around $1 billion by the end of 2028. Another major change in the new car development strategy will be fewer prototypes for the evaluation process. The automaker claims to be aiming to reduce the prototypes by 50 per cent. It claims this move will not impact the quality of the new cars of the company negatively and will annually save $844 million.
Besides these, Volkswagen is also aiming to improve its after-sales business, more optimized production time, cost-effective procurement services etc. Besides these, Volkswagen is planning job cuts as well to reduce its expenses and increase profit.