Two-door Polo may be scrapped as a savings drive

EUROPE’S largest carmaker Volkswagen is set to scrap the two-door version of its popular Polo compact as part of a big savings drive, German news magazine Der Spiegel reports.

VW hopes to save 200 million (R2.63 billion) by offering the overhauled, third-generation Polo from 2017 as a fourdoor car only.

The Wolfsburg company has also cast doubts on the future on the Audi and Porsche luxury marques for profit.

VW fell as much as 1.6 percent to 238.35 and was trading down 1.5 percent as of 10.45am in Frankfurt, reversing a gain earlier in the day.

After years of pushing for growth in its bid to surpass Toyota Motor in deliveries, VW has shifted focus to profitability, even as it boosts investment to upgrade factories and develop technology for electric cars and self-driving vehicles.

Those efficiency efforts have yet to pay off as VW faces slowing market growth in China of some other models such as the sports Scirocco, said the report. Commenting on the report, VW has said halting production of the two-door Polo was one of the options being considered.

The Polo is one of the brand’s big-selling models in Germany and it has been in production for four decades. Volkswagen aims to make savings of 5bn in its under-performing car and plunging demand in Russia and Brazil. The manufacturer has a goal of group operating profit in a range of 5.5 percent to 6.5 percent of revenue for this year, compared with 6.3 percent in 2014. The VW car brand’s margin has narrowed from 3.5 percent in 2012.

“Our stated goal is to achieve further growth both in terms of volume and in our sales revenue and operating profit,” Winterkorn said.

Profitability at Audi, the world’s second-largest maker of premium cars, has also slipped as it increases spending division, said the magazine. The focus is on reducing the number of components, models and variations. Volkswagen will make more use of modular platforms in order to cut costs.

The report also said the Beetle was also under threat but VW denied the claim. The chubby, two-door Beetle is a strong seller in the US where overall VW sales have otherwise fallen. – Sapa-dpa on additional manufacturing capacity and new models to catch BMW. The margin narrowed to 9.6 percent last year from 10.1 percent. The return on sales this year would be in a range of 8 percent to 10 percent, Audi said on Tuesday.

Porsche’s profit margin, meanwhile, narrowed to 15.8 percent of sales from 18 percent after the sports carmaker rolled out the Macan compact sport utility vehicle.

The Bentley ultra luxury division’s profitability shrank to 9.7 percent from 10 percent. – Bloomberg