VW unveils big investment plans
Frankfurt, September 17, 2011
Germany's Volkswagen (VW) will invest more than ever before in the coming five years, as it seeks to overtake General Motors and Toyota as the world's biggest auto maker within the decade.
VW, already Europe's largest carmaker, aims to sell more than 10 million vehicles by 2018 and achieve a pre-tax profit margin north of eight per cent, which would equate to a return on investment in their core Automotive Division of over 16 per cent.
'The Volkswagen Group is investing a record amount in forward-looking projects to achieve its goal of becoming the world's best automobile manufacturer,' chief executive Martin Winterkorn said on Friday.
Volkswagen met a setback in its bid to dominate the industry when Japan's Suzuki Motor said earlier this week it wanted to end an alliance that would have boosted the German group's small-car presence in India.
Earlier this month, VW also said it called off a merger with financial holding Porsche SE this year because of legal issues and was now examining other options to integrate the holding's 51 per cent stake in Porsche sports cars.
Although VW supervisory board meets every autumn to decide on the rolling investment plan - commonly targeting an annual ratio of 6 per cent to revenue - this year's 62.4 billion euros ($86 billion) plan represents a significant jump compared with the 51.6 billion euro investment over five years targeted last November.-Reuters