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Volkswagen to overhaul core brand to improve returns, report says

According to a report by Reuters, citing an internal memo from Volkswagen brand chief Thomas Schaefer, the auto maker intends to overhaul its core brand in an attempt to bolster efficiency and returns.

“We can see that our brand – despite all its strengths – is not yet on a sufficiently solid economic footing,” Volkswagen’s brand chief stated in the memo, cited by Reuters.

“We need to create good, competitive returns in times of crisis and in a continually volatile world,” he added.

According to Schaefer, Volkswagen’s core brand was targeting a return on sales of 6.5%, compared with the 3% it actually registered during the first three months of 2023.

Schaefer noted the latter was a result of a number of challenges such as geopolitical conflicts, recession risk, unstable supply chains as well as rising raw material and energy costs.

The shares of Volkswagen AG (VOWG) were last gaining 1.89% (EUR 2.75) on Thursday to trade at EUR 147.95 on Xetra, while extending the gain from the previous market session.

The auto maker’s total market cap now stands at EUR 68.414 billion.

The shares of Volkswagen AG went down 42.86% in 2022, compared with an 8.79% loss for the DAX Automobile (CXPAX) Index.

The company’s shares have edged up 0.20% so far this year.

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