VW brand lifts midterm profit outlook on higher-margin
cars, cost cuts
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[November 30, 2017]
WOLFSBURG, Germany (Reuters) -
Volkswagen's <VOWG_p.DE> core autos division has raised its midterm
outlook for profitability on cost cuts and a planned rollout of
higher-margin models, and expects deliveries to hit a new record this
VW's namesake brand on Thursday said it expects the operating profit
margin to climb to between 4 and 5 percent by 2020, after previously
guiding for that benchmark to hit 4 percent or more at the end of the
The world's largest automaker plans to increase the share of
sport-utility vehicles (SUVs) of its overall deliveries to about 40
percent by 2020 from currently 14 percent.
Persistent demand for SUVs will help VW brand this year to beat the 2016
deliveries record of 5.99 million cars, the carmaker said without being
more specific. Ten-month sales were up more than 3 percent at 5.04
The VW brand, which has been undergoing heavy restructuring for about a
year, said it has kept fixed costs broadly stable this year despite
growing spending on model launches.
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A Volkswagen logo is pictured at the International Auto Show in
Mexico City, Mexico November 23, 2017. REUTERS/Henry Romero
The carmaker said it will realize 3,800 job cuts in Germany by the end of 2017,
a year after it agreed with unions to slash 23,000 positions via natural
attrition by 2020.
"We have completed the first five kilometers of a marathon," VW brand chief
executive Herbert Diess said. "We are all aware of the challenges that lie ahead
(Reporting by Andreas Cremer; Editing by Arno Schuetze)
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