VW's German plants need to shape up, says production chief

BERLIN (Reuters) – Volkswagen’s (DE:) German plants need to boost efficiency to match overseas operations, production chief Andreas Tostmann was quoted as saying, targeting 2 billion euros ($2.2 billion) in savings by 2023.

German carmakers, including Volkswagen’s Audi (DE:) brand, have announced thousands of job cuts in recent weeks to address an expected 5% drop in global auto sales this year, with declines likely to spill into 2020.

“The pace of improvement is better abroad. In Germany, despite all the successes we’ve achieved, we have to do better,” Tostmann told trade journal Automobilwoche.

Tostmann wants to implement the savings in the production of VW branded cars through a bundle of measures on top of automation, including a leaner logistics operation.

“The result is that we need 15% less space, 60% fewer logistics vehicles and are able to move 20% more product,” said Tostmann, according to extracts from his Automobilwoche interview.

VW’s luxury Audi division last month said that it would cut up to 9,500 jobs, equating to 10.6% of total staff, by 2025 in a move to free up billions of euros to fund the shift toward electric vehicle production.

Rival Daimler (DE:) as well as car suppliers Continental (DE:), Robert Bosch and Osram (DE:) have also recently announced staff and cost cuts.

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