At this week's LA auto show, VW presented a new version of the electric e-Golf (Photo: VW)
Volkswagen Group announced plansÂ to strengthen its focus on new mobility, while at the same time reducing the work force at its core VW brand by 30,000.
The moves are necessary to shore up declining profit margins and profitability at the core VW brand, which has been hurt by high costs and the negative effects of its admitted widespread cheating on diesel emission tests.
"For the brand, we had no choice," VW brand CEO Herbert Diess said at a press conference. "Without these measures, the brand would have faced even much harder times."
The cost reductions are expected to addÂ 3.7 billion euros a year to the bottom line from 2020. VW said.Â That money willÂ come from a projected 25 pc productivity improvement at the brand's German factories alone.
VW's work force reductions will be handled mostly through a cut in temporary workers and through natural attrition, company officials said.
The moves are part of a strategy designed to change VW from a carmaker into a provider of mobility services with a focus on digital technologies and electric vehicles. That transition should result in a completely new VW brand as soon as 2020.
"We re reshapingÂ the entire brand, making it fit for the big change happening in our industry," Diess said.
VW wants to add 9,000 jobs in new growth areas, specifically software development, in coming years. These investments should generate a combined 3.5 billion euros in new revenue, the company said.