Volkswagen Announces 2025 Strategy: Reducing Model Varieties, Prioritizing Profit Margins Over Sales Volume

According to a report by AutoNews on October 30, Beijing time, Matthias Mueller recently delivered a public address in his capacity as the new CEO of the Volkswagen Group. In his speech, he unveiled specific plans to turn around Volkswagen’s fortunes. Particularly noteworthy is that, going forward, the Volkswagen Group will focus on improving its profitability rather than pursuing growth in sales volume.

Matthias Müller’s proposed rescue plan for Volkswagen consists of five key points, one of which is a comprehensive review of Volkswagen’s previous plan to become the world’s largest automaker by 2018. The Volkswagen Group stated that it will unveil its 2025 strategic plan next year, replacing its current 2018 strategic plan. Under the 2018 strategic plan, Volkswagen Group’s top priorities were to increase sales to 10 million vehicles by 2018, achieve an 8% profit margin, and establish itself as “a global leader in both economy and the environment.”

Some analysts pointed out that Matthias Müller’s announcement of the five key points of the plan to rescue Volkswagen comes at a particularly sensitive time. Right now, Volkswagen is deeply embroiled in a scandal involving emissions cheating, and the number of Volkswagen vehicles affected by this scandal has already exceeded 11 million. Matthias Müller stated that starting from January next year, Volkswagen will collaborate with Germany’s federal transport authorities to develop highly effective technological solutions.

Matthias Müller also stated that in the future, the Volkswagen Group will grant greater autonomy to its regional divisions and sub-brands. In addition, the Group will conduct a thorough review and assessment of the performance and prospects of numerous sub-brands, including Lamborghini, Bentley, Bugatti, and Ducati. In a statement, Matthias Müller pointed out that one of his top priorities is to “slim down” the Volkswagen Group, which boasts a wide array of brands and vehicle models. Previously, some analysts have criticized the Volkswagen Group for developing vehicles that are flashy but lack practicality—for example, the Bugatti Veyron supercar.

Matthias Müller also stated, “We will conduct a detailed assessment of the Group’s more than 300 existing vehicle models and will also examine each brand’s contribution to the Group’s profitability.” He further revealed that Volkswagen’s management team will focus more on addressing cross-brand strategies, enhancing synergy among different departments, and finding ways to use resources more efficiently.

Matthias Müller stated that he would promote decentralization of power within the group, with the aim of reorganizing the group to foster an “open and collaborative corporate culture.” As an example, he pointed out that he would not be involved in the detailed work of product design. Analysts noted that Matthias Müller’s remarks were, in fact, a critique of his predecessor Martin Winterkorn’s overly broad management scope.

Matthias Müller stated that the Volkswagen Group will not abandon its 2018 strategy, despite the fact that the strategy’s goal was to make Volkswagen the world’s best-selling automaker. Critics pointed out that the Volkswagen Group’s “sales-driven” approach inadvertently created fertile ground for the emissions-cheating scandal.

Matthias Müller believes that both inside and outside the Volkswagen Group have misunderstood the 2018 Strategy. Some people think the core of the 2018 Strategy is that everything the Group does must give way to achieving higher sales volumes. However, Matthias Müller points out that the real focus isn't about selling 100,000 more or fewer vehicles than competitors; rather, the real issue lies in “qualitative transformation” rather than “quantitative change.”