VW bets on electric cars, services to recover from crisis
By Andreas Cremer
WOLFSBURG, Germany (Reuters) - Volkswagen (VOWG_p.DE: Quote) will invest billions of euros in electric cars, ride-hailing and automated driving to become a world leader in green transport by 2025, it said on Thursday, as it reshapes its business following its diesel emissions scandal.
Europe's biggest carmaker said it would fund "the biggest change process in the company's history" with an efficiency drive, including integrating components businesses that currently employ 67,000 people in 26 locations worldwide.
But a lack of detail in the programme, dubbed "TOGETHER – Strategy 2025", left some analysts cold, and Volkswagen (VW) shares fell as much as 4.3 percent.
"The announcements by VW look great on paper but no one can say for sure how demand for electric mobility will develop," said Commerzbank analyst Sascha Gommel.
"There are worthy elements among the plans but it's probably also a marketing exercise by VW to tell the public that they have gotten the message" to change after its scandal, said Gommel, who has a "hold" recommendation on the stock.
VW is battling to recover from the biggest business crisis in its 79 year history after admitting in September to cheating U.S. diesel emissions tests. The German company has set aside $18 billion to cover the cost of vehicle refits and a settlement with U.S. authorities, and analysts expect more fines and costs.
The scandal has cast a shadow over the entire market for diesel cars, which account for about half of new vehicle sales in Europe, and has ramped up pressure on VW to cut costs at its namesake brand, which lags the profitability of rivals.
Spelling out a new strategy ahead of its annual shareholder meeting on Wednesday, the company said it planned to launch more than 30 electric vehicles over the next decade, forecasting they would account for about a quarter of group deliveries by 2025. Continued...