Volkswagen set new financial targets on Wednesday of 5-7% annual revenue growth by 2027 and 9-11% returns by 2030, aiming to stay disciplined on investment and focus on boosting margins in the face of growing competition for market share.
The German carmaker has set “performance programmes” for each brand, allocating them capital and setting a specific return on sales target, but delegating responsibility to the brands for how those targets are reached.
The new revenue growth target is a marked jump from Volkswagen’s performance in recent years, with revenue growing just 1.1-1.2% per year in the last two years, and 0.7% in 2018-2019 prior to the pandemic.
Under the new performance programmes, each brand will have a set target for operating result, returns, net cash flow, cash conversion rate, and investment ratio, Volkswagen said in a statement, adding it would tie management incentives to meeting targets.
