Volkswagen AG Slash Revenue, Profit and Cash Flow Expectations

Volkswagen AG, known internationally as the Volkswagen Group, on Friday, slashed expectations for revenue, profit and cash flow due to dipping demand for their cars. 

The company now expect to deliver fewer vehicles this year than in 2023 – their fourth annual sales slump in five years. The warning underscores the extent of the crisis at Volkswagen, which have bungled a transition to electric vehicles and lost relevance in China, where their VW, Audi and Porsche brands are hemorrhaging market share. 

Even if they posted a net profit of €2.29 billion, it was down about a third from a year earlier. Operating profit fell around 29 percent to €3.83 billion, resulting in an operating margin of 4.7 percent, in line with analyst expectations. 

Also, revenue shrunk 3 percent to €80.6 billion, despite slightly higher vehicle deliveries. 

Volkswagen attributed the earnings decline to €1.3 billion in costs from increased US import tariffs and €0.7 billion in restructuring expenses at Audi, Volkswagen Passenger Cars and software unit Cariad. A greater share of lower-margin electric vehicles, along with price and currency effects, also weighed on profitability.

Europe’s largest carmaker now expect an operating margin of between 4 percent and 5 percent, down from a previous forecast of 5.5 percent to 6.5 percent. And net cash flow in the automotive division is forecast between €1 billion and €3 billion, revised from €2 billion to €5 billion.

And it's not just the Volkswagen Group that are in dire straits. In fact, European auto makers have booked billions of euros of losses and issued profit warnings as they face US import tariffs, stiffening competition from China, and domestic regulations aimed at accelerating the switch to EVs (singularly, the implementation of the CAFE "Clean Air for Europe" regulation). 

Already, car manufacturers warn that the mass adoption of electric vehicles, which is necessary to meet these regulations, is not progressing at the expected pace. This is due to factors such as the high price of electric vehicles, the lack of adequate charging infrastructure and consumer reluctance. 

Malaysian women’s doubles shuttlers Pearly Tan-Thinaah Muralitharan cruised into the semi-finals of the China Open after defeating Japan’s Yuki Fukushima-Mayu Matsumoto in straight games yesterday.

The world No 3 pair were in total control throughout the match, winning 21-16, 21-12 in just 38 minutes. 

Pearly-Thinaah will meet China’s world No 8 Jia Yi Fan-Zhang Shu Xian in the semi-final today.

Volkswagen Strike Deal to Avoid German Plant Closures

 

 

 

 

 

 

 

 

 

Volkswagen have reached a deal with the IG Metall trade union which will avert plant closures in Germany and avoid immediate compulsory redundancies.

 

The two sides have, however, agreed to cut more than 35,000 jobs across the country in a "socially responsible manner" by 2030, in order to save some €15 billion ($15.55 billion). 

 

Germany's largest carmaker had previously warned it might have to shutter plants in the country for the first time in a bid to cut costs. [Kindly read my post "Volkswagen Plan Mass Layoffs" published November 01, 2024]. 

 

After drawn-out negotiations which began in September, the union said on Friday that the two had "succeeded in finding a solution" that secures jobs and enables future investment. 

 

While the deal will also see a reduction in production capacity across its plants, it was celebrated by union leaders. 

 

"No site will be closed, no-one will be laid off for operational reasons and our company wage agreement will be secured for the long term", said IG Metall's works council chief Daniela Cavallo. 

 

"We have achieved a rock-solid solution under the most difficult economic conditions", she added. 

 

The 35,000 job cuts by 2030 are expected to be found through different solutions such as offered early retirement. Under the agreement, a 5% wage increase that was previously agreed will also be suspended in 2025 and 2026. 

 

Oliver Blume, VW's group chief executive, said in a statement that the agreement was "an important signal for the future viability of the Volkswagen brand". Factory closures in Germany would have been unprecedented in the manufacturer's history.

Ford to Axe 14% of Workforce in Europe

US car manufacturer Ford have said they plan to lay off 4,000 of their workforce in Europe, becoming the latest automaker to try to slash costs. 

 

The job cuts represent about 14% of Ford’s 28,000 workforce in Europe and around 2.3% of their total workforce of 174,000, and will be completed by the end of 2027, the company said on Wednesday. The bulk of the layoffs will take place in Germany, where 2,900 positions are under threat, and in UK, with an expected 800 jobs to be deleted. 

 

The US carmaker will be the latest after Nissan, Stellantis, and GM to resort to the drastic cost-cutting step as the automotive sector faces challenges, including weak EV sales.

 

For sure, the measure will exact a heavy blow to the EU’s top economy, Germany, where the bloc’s biggest carmaker – Volkswagen – earlier announced that they would consider plant closures or layoffs for the first time in their 87-year history.

 

In September, thousands of demonstrators stormed Brussels to protest Volkswagen’s plans to shut down the Audi facility in the Belgian capital. 

 

The development comes as EU automakers are facing their worst months since the Covid-19 pandemic. Car sales within the bloc have fallen by 200,000 vehicles in the first eight months of 2024 compared to the same period last year, according to the Center for Automotive Research.

 

Malaysia's Sivasangari Subramaniam was stopped in the semi-finals of the Singapore Squash Open today when she lost to world No. 10 Amina Orfi 3-1: 5-11, 6-11, 12-10, 8-11 in 64 minutes. 

 

It was the Egyptian's third win over Sivasangari in four encounters.

 

I'm disappointed but it is what it is.

Volkswagen Plan Mass Layoffs

Volkswagen are reportedly looking to significantly reduce their workforce in Germany and shut down at least three factories in the country, amid a major overhaul aimed at lowering costs and increasing return on sales, the head of the carmaker’s Works Council has announced.

Daniela Cavallo (right) explained to employees in Wolfsburg in the German state of Lower Saxony, on Monday that Volkswagen management are “absolutely serious” about the plans and that the move is “not saber-rattling in the collective bargaining round”, Reuters reported. 

 

Throughout their almost 90-year history, the company have never closed a plant in their home country. The last time they shut down any of their facilities was in 1988 in the US. 

 

“It is a firm intention to let the locations’ regions bleed dry and the clear intention to send tens of thousands of Volkswagen employees into mass unemployment”, Cavallo asserted. Her comments come as the automotive giant have been negotiating for weeks with unions over plans to overhaul their business in order to remain competitive in light of weaker demand from China and Europe. 

 

She did not specify which of the ten Volkswagen plants operating in Germany would be shut down or exactly how many of their roughly 300,000 workers in the country would be laid off, but noted that all remaining facilities would be affected by the changes and that “none of them are safe”. Cavallo also stated that Volkswagen management are demanding a 10% pay cut and no pay raises for the next two years. 

 

She stressed, however, that the German government must urgently come up with a plan to ensure that the country’s economy does not “go down the drain”. She noted that Volkswagen and other car companies are in agreement as to the nature of the problems they are facing, such as slower-than-expected electric transition as well as fierce competition from Chinese automotive brands entering Europe. 

 

“We are not far apart when it comes to analyzing the problems. But we are miles apart on the answers to them”, Cavallo said. 

 

I'm not surprised at Volkswagen's calamitous circumstance because on Wednesday, the company reported a 42% plunge in third-quarter profit to their lowest level in three years. 

 

Earlier this month, the Sueddeutsche Zeitung newspaper reported that the German economy is expected to contract for a second year in a row as it struggles to keep up with soaring energy costs after cutting itself off from Russian gas. [FYI, Germany's economy contracted by 0.3% in 2023, and the government predict a further contraction of 0.2% in 2024]. 

 

Over the past year, the German government have noted a 5.3% drop in the country’s industrial output as orders for domestic-made goods have also plummeted. 

 

Experts at the Berlin-based Forum for a New Economy have warned that Germany’s failures are expected to turn the 2020s into a “lost decade” for the country as it suffers “the worst economic downturn since World War II”.

Is Germany facing collapse? I won't be surprised if it does.

Volkswagen Spider Sculpture

David Fambrough's giant Spider Bugs are larger than life art installations created from Volkswagen Beetles. 

 

The Spider Bugs feature the body of a VW Beetle (left) elevated on long, spindly legs, giving them the appearance of a giant spider. They're found in the US. One of these "spider bugs" is currently located outside Carson City, Nevada, with others perched atop an auto shop in Sparks, Nevada, and one reported in Palm Springs, California. 

 

As some of these locations are subject to change, the "spider bugs" could continue to creep along to new spots, surprising and delighting viewers. 

 

In this video filmed by a drone, we get to see one of the Spider Bug sculptures along route 66 from all angles. I love the way this footage is filmed – it's so clear that it makes me feel like I'm really there.

 

These striking sculptures capture the essence of classic sci-fi and horror films of the 1950s. Fambrough's sculptures can be seen as both playful yet unsettling, making them memorable landmarks across the American Southwest.

 

Liverpool claimed an assured victory at AC Milan on their Champions League return to firmly bounce back from Saturday's shock defeat by Nottingham Forest – they triumphed 3-1.

 

Actually, the Reds let in a goal inside three minutes but Arne Slot's side picked up aggressive pace thereafter and responded with a dominant performance. 

 

Defender Ibrahima Konate leapt highest to thump a header into the net in the 23rd minute, courtesy of Trent Alexander-Arnold's free-kick. It was 2-1 in similar fashion to the equaliser when Konstantinos Tsimikas’ corner from the opposite side was headed in by Virgil van Dijk five minutes before half time. The victory was sealed in the 67th minute when Cody Gakpo ended an electric run by squaring the ball to Dominik Szoboszlai for a tap-in.

 

The Premier League is back on the menu for Liverpool this weekend, as the Reds host Bournemouth at Anfield on Saturday before taking on West Ham United in the EFL Cup next Wednesday.

Happy Diwali 2020

 

Happy Diwali to all those celebrating this special day! May your life be as colorful and shimmering as the lights of Diwali! 

The Volkswagen Beetle is one of the most iconic cars in automotive history. Sure, the classic Type 1 was considered a tad bit underpowered and technically unimpressive compared to its competition. However, what it lacked on the inside was vastly outweighed by its never-before-seen aesthetic – so much so that just by looking at it, you can’t help but smile. I don’t know about you but it’s a cute car! 

So, it should come as no surprise that people are paying tribute to the classic Beetle by revamping it into an even cooler version of itself, just like designer Danni Koldal did with his sleek black matte 1961 Volkswagen Beetle Deluxe Roadster that he designed and converted from a regular 1961 Beetle Deluxe.

Brands are Social Distancing Too

During these trying Covid-19 times, it's not just people that are social distancing. Brands are doing it too.

McDonald's, Coca-Cola, Audi and Volkswagen are just a few of the corporate conglomerates that are interpreting "social distancing" with logo redesigns. They’re simple, yet effective messages on the importance of staying indoors.

Coca-Cola, the world’s most famous beverage has unveiled a billboard (in the albeit very deserted) Times Square in New York that urges “staying apart is the best way to stay united”. 

The billboard was created in partnership with Mercado McCann in Argentina and follows The Coca-Cola Foundation’s, the philanthropic arm of Coke, $20.5 million donation to help fight the virus.

Burger King are re-imaging their store signs in the US from “home of the Whopper” to a more simple message: “Stay home”.

The term has become popular because of the worldwide spread of the novel coronavirus. Social distancing means standing 2 meters (6 feet) apart from others in an effort to lower the risk of contracting the illness.

Piloted Driving

Image credit: http://www.zdnet.com/audis-self-parking-car-whats-stopping-the-tech-getting-on-our-roads-7000009891/

With crime in this country determined to soar to the heavens above and the Malaysian police having been rendered impotent, this innovation can be a boon to women everywhere because they are the most vulnerable. This technology of ‘piloted driving’ can mitigate their fears whenever they step out of the door.

Audi has introduced a self-parking car (or as it prefers to call it 'Piloted Parking technology') at the International Consumer Electronics Show (CES) 2013 that was held January 08-11.

The company’s senior engineer Annie Lien of the Audi/Volkswagen Group of America demonstrated this new technology for the Audi connect integrated system. Using an app on your smartphone, you can tell your car to find a spot and park itself and then later, to pick you up! You don’t need a boyfriend to do the job anymore!

The idea behind it is rather simple: you exit your vehicle, pull out your smartphone, click a button and the car drives itself off to a parking spot at a nearby garage. What at first sounds like a mixture between Knight Rider's KITT and something James Bond's Q might create is actually technically possible.

The car uses an array of internal and external sensors to get its position: Audi claims they can be as accurate up to 10 cm, but only if they have access to special laser sensors inside the parking structure (four of those scanners had been set up in the parking structure to support the demo – it was conducted at a Las Vegas hotel). These might be redundant in the future, as the car maker is working on a laser sensor that will be integrated in the car itself (think the sensor tower on top of Google's self-driving car, but completely integrated in the chassis).

The self-parking system also needs access to the car park's management system, in order to find and allocate a free parking space and transmit the route to the car. Since most modern car parks have more than one level or are underground, GPS-based positioning is not really an option, so instead the management system uses Wi-Fi to transmit the route.

Therefore, I am not the least bit surprised that the German car maker has the slogan 'Vorsprungdurch Technik' which translates into 'Leap ahead through technology'. Consumers, especially the women – are you ready?

DAP’s Lim Kit Siang informed Parliament yesterday that he finally understood why his party was accused of funding a band of cyber-troopers to cause racial disharmony. [Please read about it at this link http://helpvictor.blogspot.com/2013/05/the-red-bean-army.html].

Lim had said: “Today I know why these stories about the Red Bean Army were made up. There is a proposal made by UMNO members for a RM250 million allocation to fight the RBA”.

And he added: “They have a vested interest in this. They want UMNO leaders to allocate to fight them but it is not for the fight. It is for their own riches”.

So now we know that whenever there are issues that demonise the Opposition, it is because they have their own self-serving agendas.

Car Parks in the Sky

As Kuala Lumpur transforms into a mega-metropolis, roads get more congested, traffic snarls become more commonplace and parking spaces diminish in tandem. It is this type of scenario that painted a picture in my mind when I came across this article featuring futuristic garages in the UK’s Daily Mail (January 28, 2012)!

Image credit: http://www.dailymail.co.uk/news/article-2093052/The-ultimate-high-rise-garage-600-new-cars-packed-robotic-arm-new-car-tower-wait-delivered-buyers.html

These garages are the ultimate car showroom – where new vehicles sit with pride in the stunning glass towers – housed at the Volkswagen theme park, the Autostadt (“car city”). And each day about 600 cars are picked up from the two 200 feet tall silos by their new owners – making it the world’s largest vehicle delivery center.

Incredibly, the cars are built at the manufacturer's main plant, in Wolfsburg, Germany, and transported by conveyor belt to the adjacent towers' basement. From there they are lifted into position at a speed of two meters a second via a robotic arm that rotates and run along a central beam.

Each tower contains 400 brand new Volkswagens.

An underground tunnel connects the two buildings, and the cars roll along an internal track to arrive to be fitted with license plates.

New owners can watch as their car is picked up from a bay and delivered to them at the Autostadt CustomerCenter, with the speedometer at zero.

Moreover, the weather’s gone cuckoo – yes, blame it on global warming. In parts of Kuala Lumpur, ground-level car parks and especially basement car parks are at the mercy of rising waters when rainstorms batter our cities, bringing about flash floods that will drown cars or sending them adrift. We all know how frequent Kuala Lumpur experiences this phenomenon.

So parking lots that tower high above our roads can be a boon to KL motorists. I would even be so bold to suggest that if the twin towers in Autostadt are only 20 storeys high – for Kuala Lumpur, where car populations are expanding rapidly, I could envision them to be 40 or even 60 storeys high! That’s parking spaces for 800 to1,000 cars! Now, isn’t this a fab idea?

Having advanced in two domestic cup competitions in the past week, Liverpool got its Premier League campaign back on track with a 3-0 win over Wolverhampton Wanderers on Tuesday. Andy Carroll celebrated the first anniversary of his £35m move to Liverpool by opening the scoring when he prodded in at the far post to beat Wolves goalie Eggert Jonsson (52) – after collecting a cross from Charlie Adam. Craig Bellamy added a second with a low finish (61) and Dirk Kuyt scored a third after a quick break (78). Liverpool is now in fifth place in the EPL standings.

Aqua-car

Last evening, I went to Bukit Jalil to attend the AFC Toastmasters meeting. I was originally slotted to be one of the Evaluators but ended up being elevated to be the General Evaluator instead. And the meeting agenda was riddled with confusing changes. Still, I was fortunate to listen to good speeches and evaluations – I shouldn’t be surprised since this is an AFC Toastmasters meeting where Daniel Teh and company would have set certain benchmarks.

My other major complaint was that the meeting started twenty minutes late! This is really inexcusable. Anyway, I would grudgingly give a score of 4 out of a 10 for this meeting.

I spotted this intriguing Chinese-designed car on UK’s The Daily Mail yesterday although it first surfaced in the same newspaper on June 13, 2011 – see photos below:

Image credit: http://www.dailymail.co.uk/sciencetech/article-2002726/Meet-car-future-drives-roads-sand-ice--water.html

The all-terrain eco-friendly vehicle, which has a top speed of 62 mph and works like a hovercraft, can move seamlessly between different surfaces. Xihua University student Yuhan Zhang created the spectacular car – called the Volkswagen Aqua – the winning entry to a Volkswagen-sponsored compeition.

The vehicle's sleek sportscar-like design incorporates four high-powered fans and integrated airbags that inflate to lift it from the ground.

A large windscreen stretches above the front seats to give a panoramic view of the landscape ahead.

And you enter and exit the car from a hatch at the rear of the car.

Based on technology that is currently available, the Aqua uses a hydrogen fuel cell to power two motors - with zero carbon emissions. One motor inflates the skirt around the vehicle to make it hover, while the second drives it forwards and controls its direction.

But I do know that hovercrafts are difficult to control and there is also the issue of stability, I think. If the Aqua really works like a hovercraft, has Ms Zhang addressed this? Still, this car is cool! And it would be really swell to drive this amphibious vehicle on our flood-prone KL roads, wouldn't it?