Volkswagen Spends Itself Through The Crisis

Bertel Schmitt
by Bertel Schmitt
volkswagen spends itself through the crisis

One of the reasons for Volkswagen’s current strength dates back four years. During the carmageddon of 2008 ff, multinational carmakers such as GM and Toyota drastically cut back investments into new cars and technologies. Volkswagen did not change R&D spending. Four years later, this translates into a host of new models, and revolutionary platform architectures (MQB, MLB, MSB) that promise even more new models at lower cost.

Faced with the European edition of carmageddon, Volkswagen won’t lower spending either. Instead, it will increase investments into new cars and factories, Reuters says.

Tomorrow, Volkswagen’s supervisory board is expected to sign off on new spending targets for the 2013-17 period.

Reuters expects Volkswagen to increase spending by 12 percent to as much as 70 billion euros ($89.73 billion) for its twelve brands over the next five years, after the spending target was raised 20.9 percent to 62.4 billion euros for the 2011-15 period.

This could be another nail in the coffins of Peugeot and Fiat, which have slowed or shelved whole vehicle programs, engine technologies and platform revamps.

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13 of 18 comments
  • Oelmotor Oelmotor on Nov 22, 2012

    Nice frames, but did VW invest in their motor engineering? The 1.4 TSI motors are suffering from premature timing chain failures...

    • See 3 previous
    • Toomanycrayons Toomanycrayons on Nov 23, 2012

      @hans007 "Yes … the reliability is so bad that no one is buying their cars any more and the company is on the verge of bankruptcy. Right?"-th009 Do sales actually represent endorsements? Maybe people have simply adjusted their acceptable level of product disgust upward, much as with elections, world news, violence, sports, relationships...

  • Mike978 Mike978 on Nov 22, 2012

    Why did Toyota cut back on R&D spending? I thought they were long sighted (like the Germans) and not short sighted like GM.

  • Dimwit Dimwit on Nov 22, 2012

    It's something that should be kept track of. It would not surprise me to find that the ones who are willing and capable of maintaining R&D are the ones that will survive. That may be a short list.

    • See 4 previous
    • Dimwit Dimwit on Nov 23, 2012

      @th009 You start going down the list of companies and there are only a few. VW, Ford, Toyota, H-K, a little GM, a little Renault/Nissan, Mazda, Honda, BMW and MB. Chryco is very target investing and FIAT is shedding brands.

  • Lowsodium Lowsodium on Nov 23, 2012

    It will be awhile before they convince me the quality is there. My last Jetta was a good looking, nice car. Until the suspension squeaks drove me crazy. The terrible dealership was the worst part of my experience, but thats not all VW's fault.