VW to cut $3.4bn in costs to boost profit margins

Volkswagen announced another €3 billion ($3.4 billion) of cost cuts on Thursday in an effort to speed up an improvement in profit margins at its core VW brand.

Still battling to recover from a 2015 scandal over emissions test cheating, the German automaker has been cutting costs to fund an ambitious shift to electric cars and automated driving.

A key goal is to improve margins at its mass-market VW brand, its largest division by sales, but which has long lagged behind the profitability of rivals such as Japan’s Toyota, due in part to high labor costs at its German plants.

“By 2020 we will achieve €3 billion in cost savings, and now aim for a further €3 billion by 2023,” Arno Antlitz, the board member responsible for finance at the VW brand, told a press conference.