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VW chief aims to challenge Toyota on margins as well as technology

Volkswagen aims to challenge its main rival Toyota not only in the area of technology but also on plant efficiency and thus on marginal returns, VW chairman Martin Winterkorn told German business weekly Wirtschaftswoche.

Wolfsburg-based Volkswagen is aiming at increasing efficiency by at least 10% a year, as well seeking to increase turnover by a similar figure, Winterkorn said. By 2010, the German carmaker is aiming at 8 million vehicles a year. New models, such as the new Golf should offer higher margins than the 8% achieved by current models. Winterkorn is not planning to cut jobs. “That danger would only exist if we stopped growing”’ he said.

According to the chairman, VW will grow through its new products, like the Tiguan and the Scirocco. According to Winterkorn, VW’s struggling Spanish subsidiary Seat is to remain part of the concern and will not be sold. VW plans to build the new small City car in Europe. It is to be presented as a prototype at the International Motor Show (IAA) beginning in Frankfurt on Thursday. Winterkorn said this might mean a plant in Eastern Europe.

The new model is a four-seater intended to replace the Fox with a sticker price of around €9,000 ($12,000). (c&m.com)