By on September 17, 2011

One of the reasons why Volkswagen is hitting on all cylinders (don’t be U.S. myopic – always measure a car company by global success) is that they did not stop investing in the wake of the 2008 crash. They did not have to: Sales in the U.S. were low, and where you don’t have a lot, you can’t lose a lot. At the same time, VW had the big luck of being a major player in China. While  U.S. and Japanese car companies stopped or severely dialed back their investments into R&D and capacities, Volkswagen kept on spending. This has a delayed effect of 3 to 5 years, and what we are seeing now is just the beginning of this effect. It is also the beginning of an even greater spending spree.

The Volkswagen Group will invest around €62.4 billion ($86 billion) in the coming five years. This investment plan has been approved in a Volkswagen Supervisory Board meeting yesterday.

Investments in property, plant and equipment will account for €49.8 billion ($68.7 billion). On top of this will come capitalized development costs of €11.6 billion ($16 billion). All in all, Volkswagen wants to invest around six percent of sales into the future. According to the press release, Volkswagen wants to safeguard that future “by building new production facilities, introducing new models and developing alternative drives, as well as with its modular toolkits.”

 

Get the latest TTAC e-Newsletter!

14 Comments on “Volkswagen Bets $86 Billion On Its Future...”


Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • mcs: Well, with the money he’s saved by driving the jeep, maybe in the holiday spirit, he could spring for some...
  • BobinPgh: Did the fact that according to Chrysler, it was “Suddenly 1960!” have anything to do with the...
  • ToolGuy: Re: XJ Cherokee This individual (current CEO of Amazon) has a net worth of something like $400 million and...
  • olddavid: I agree. I live where most electricity is generated by hydro and/or nuclear at Hanford. In my travels I see...
  • RHD: Yaffle, dear readers, means an armful, or a green woodpecker. Maybe what the author could have written was...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber