Volkswagen AG (VKW.L,VLKAF.PK,VOW.BE) announced Saturday that the core brand of the Volkswagen Group will be investing about 22.8 billion euros throughout the world from 2018 to 2022, a day after it announced a spending programme aimed at bolstering its position as a maker of electric cars.
Volkswagen said that around 14 billion euros will be spent in Germany, adding that one of the key measures included a 1 billion euros injection to transform the carmaker's Zwickau plant into a pure e-mobility facility.
Herbert Diess, CEO of the Volkswagen brand, said, "The investment package which has now been adopted will give a decisive boost to the largest product and technology offensive in the history of the brand".
On Friday, the company announced that it will invest more than 34 billion euros for the development of electric mobility, autonomous driving, new mobility services and digitalization until 2022.
The decision was made following the conclusion of consultations on the Wolfsburg-based firm's board over how to respond to the challenge of technological change in the automotive industry.
CEO Matthias Müller said, "We are reinventing the car. To achieve that, we are making targeted investments to provide the necessary funds from our own resources."
The company also announced that the Volkswagen brand is on track for success with the pact for the future. This is the interim assessment given by the Board of Management and the General Works Council 12 months following the signature of the agreement.
To date, 1.9 billion of efficiency savings have already been achieved, corresponding to 96 percent of the target set for 2017. As regards partial early retirement, Volkswagen is also on the right track, having already reached 94 percent of the target for 2020.
The company said that the pact for the future provides for savings and efficiency improvements in all areas and at all locations, with an annual positive impact on earnings of 3.7 billion euros from 2020 onwards, including 3 billion euros in Germany.
It also said that it plans to cut some 23,000 jobs at its own-brand unit in Germany with the creation of 9,000 future-oriented jobs.
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