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Volkswagen and workers' representatives have agreed on cost-cutting measures that could add 10 billion euros to the company's earnings by 2026. As part of the initiative, Volkswagen announced that it will shorten the development cycle for new products from 50 months to 36 months.
The Volkswagen brand has shortened the product development cycle from the current 50 months to three years, which Volkswagen believes is enough to bring new cars to market "without sacrificing quality and safety", a measure alone that could save Volkswagen 1 billion euros by 2028. At the same time, Volkswagen plans to invest 800 million euros in a new R&D center in Wolfsburg.
At the same time, Volkswagen will reduce the number of test vehicles used in the development of the technology, reducing the number of test vehicles by 50 percent over the course of a 36-month development cycle, and completing more tests digitally, which will save Volkswagen 400 million euros per year.
The reform will also involve procurement, after-sales and production cycle optimization, which can save about 7700 million euros. In addition, some employees will be laid off in a "socially acceptable manner", i.e. employees born in 1967 and some employees born in 1968 with disabilities will be retired. It is reported that Volkswagen has also frozen recruitment, and it plans to reduce the cost of administrative staff by 20%.