Volkswagen's Commitment to Cost Reduction

Volkswagen AG (OTC: VWAGY) CEO Oliver Blume has reaffirmed the company's dedication to cost reduction. At Tongji University in Shanghai, he celebrated Volkswagen's 40 years in China and highlighted their "in China, for China" strategy, which focuses on local technological advancement and cost-effectiveness.

Blume recognized the challenges faced by Volkswagen this year and mentioned plans to launch over 30 new models by 2030 to enhance the brand's appeal through a strong product lineup.

This strategy is a reaction to the competitive Chinese auto market and the rapid transition towards electric vehicles. Many foreign manufacturers, including Volkswagen and General Motors Co (NYSE: GM), have found it difficult to keep pace.

Volkswagen is further challenged by the success of local companies like BYD Co (SZ: 002594), which has diminished the era of robust sales and profitability for international automakers.

The decline in demand is even leading Volkswagen to consider closing factories in Germany, its home market.

To navigate these difficulties, Volkswagen is using its subsidiary, VW China Technology Co., based in Anhui province, to establish a new automotive platform tailored for the Chinese market. This platform is expected to lower costs by 40% and improve time-to-market for new products by 30% starting in 2026, enabling the company to be more agile in addressing market trends in China.

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