IOB - IOB Delayed price. Currency in EUR
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Ask190.45 x 0
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52-week range134.90 - 182.50
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  • Prosecutors seek charges against VW managers over labour bonuses

    Prosecutors seek charges against VW managers over labour bonuses

    German prosecutors on Tuesday sought charges against a current Volkswagen manager as well as a former manager and two former board members, accusing them of awarding works council members inflated salaries. A court must now decide whether the accusations, made by the prosecutor's office in Braunschweig, near where Volkswagen is headquartered, will be brought before a judge. A spokesman for Volkswagen on Tuesday said that there had been no misconduct in relation to deciding appropriate salary levels for works council representatives.

  • Prosecutors seek charges against Volkswagen managers over labor bonuses

    Prosecutors seek charges against Volkswagen managers over labor bonuses

    German prosecutors on Tuesday sought charges against a current Volkswagen manager as well as a former manager and two former board members, accusing them of awarding works council members inflated salaries. A court must now decide whether the accusations, made by the prosecutor's office in Braunschweig, near where Volkswagen is headquartered, will be brought before a judge. A spokesman for Volkswagen on Tuesday said that there had been no misconduct in relation to deciding appropriate salary levels for works council representatives.

  • German Companies Love Stability. That’s Becoming a Problem

    German Companies Love Stability. That’s Becoming a Problem

    (Bloomberg) -- Tucked between rapeseed fields and wooded hills in the Austrian countryside sits one of the remaining outposts of a frantic push by the German car industry into a pricey alternative to steel.The goal was to make carbon fiber the core of future cars: combustion or electric. But it proved to be more of an engineering vanity project and highlights the shortcomings of a corporate culture that creates a bias for stability.While Germany’s focus on steady improvement has worked well in the past, it’s ill-suited for a period of rapid change. And the risks have become evident as Europe’s largest economy struggles with trade conflicts and the value chain shifting away from traditional engineering. Third-quarter economic data on Thursday are expected to show that Germany fell into technical recession for the first time in six years.Inside the SGL Carbon SE factory in Ort im Innkreis near the German border, two dozen workers in blue t-shirts shuttled between about 30 industrial robots on a recent fall day. The machines stacked, cut and glued carbon-fiber parts for rooftops and rear spoilers.What they didn’t do was churn out entire auto frames by the masses, as envisioned by BMW AG and Volkswagen AG earlier this decade.Ahead of the 2013 rollout of the BMW i3, which has a body based on the material, “the hype around carbon fiber was huge,” said Herwig Fischer, who heads the plant located in what’s known as Austria’s Composite Valley. The i3 “has been a revolutionary project. Today, it’s more about an evolution.”At the time, BMW teamed up with SGL to set up a plant in the U.S. to produce the sleek black fiber and vied with VW for control of the Wiesbaden-based company. Mercedes-Benz maker Daimler AG jumped on the bandwagon by setting up its own joint venture with a Japanese peer. The German giants were keen to secure access to the material that’s lighter and stronger than steel, but costly and cumbersome to work with.iPhone on WheelsShortly after the carbon-fiber craze started, Tesla Inc. introduced the Model S, featuring a 265-mile range, wireless software updates and a 17-inch touchscreen display. In other words: While German auto engineers tinkered with a complex material that drivers couldn’t see or touch, the California upstart was inventing the iPhone on wheels.Similar fizzled developments include BMW’s 2005 combustion-hydrogen car fueled by a liquid form of the gas that’s almost impossible to store safely in a vehicle. And then there was the original Mercedes A-Class in 1997. The compact infamously rolled over during testing and featured an innovative but boxy design that turned off its target audience of younger customers.While the stumbles have been relatively minor, the window for business-as-usual overengineering is closing.Germany -- only now developing a car-battery sector to power its shift to electric vehicles -- has already started to lose its edge, according to the World Economic Forum’s latest report on global competitiveness. The country dropped to rank seven worldwide from third last year, largely because it’s struggling to adopt new Internet and communication technologies, the report says.The complex way decisions are made in corporate Germany has contributed to the slow pace of adaption. At the top of the pyramid are supervisory boards, which hire and fire top executives and sign off on major strategy decisions.Employee representatives make up half the seats on the boards and tend to take a dim view of moves that could reduce jobs. They generally need to seek a compromise with the investor side. Those representatives are 60 years old on average, 93% male and many split their time between multiple oversight bodies, according to a recent study from consultancy EY.The investor delegates were described as often being “ill-equipped,” “relatively useless” and “all old guys” in a 2018 study from consultancy Alvarez & Marsal, which was based on interviews with 20 German executives.Daimler’s effort to become more nimble is a case study in the complexity of German corporate decision making. In 2013, the automaker sought to untangle its conglomerate structure by making its commercial vehicle unit more independent, but internal dynamics shot down the plan at the time.It took Daimler six years to finally succeed. And the company had to pay dearly to gain support just for creating legally separate units for cars, trucks and services: agreeing to invest 35 billion euros ($39 billion) in Germany and safeguard jobs through 2029.Wake-Up CallThere has been progress. Most big German companies are making an effort to add more diverse views. Last year, Daimler recruited Marie Wieck, head of IBM Corp.’s blockchain operations, to its supervisory board, and Volkswagen added communications executive Marianne Heiss to its group of overseers. This year, SAP SE appointed Germany’s first-ever female DAX chief executive officer.Volkswagen’s diesel scandal also delivered a painful wake-up call to German automakers, which have since accelerated efforts to develop self-driving, electric cars. And it looks like there’s still time: Tesla’s development remains volatile, and other game-changing risks, such as ride-sharing services and robo-taxis, are still in the works.BMW is now exiting its joint venture with SGL and its future iNEXT flagship won’t rely as heavily on carbon fiber as the i3. While the prospects for an entire car frame -- with the exception of elite models like the Lamborghini Aventador -- are a stretch, the push wasn’t totally in vain.Many components benefit from the material’s low weight, durability and fire resistance, and it’s gradually becoming more economical.SGL churns out parts faster than ever before. It’s developing battery cases for China’s NIO Inc. and will start 10 new projects to produce automotive parts in 2020, from three new lines this year. It’s also expanding outside the car industry, and similar composite materials have become well established in plane making.“It took about half a century for aluminum to make its way from the aviation industry into serial production in cars,” said Andreas Woeginger, SGL’s head of technology for its composites division. “Our industry is still young.”To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net;Eyk Henning in Frankfurt at ehenning1@bloomberg.net;Richard Weiss in Frankfurt at rweiss5@bloomberg.netTo contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Chris Reiter, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Vietnam to Check Huawei, Xiaomi Phones for Disputed Map: Report

    Vietnam to Check Huawei, Xiaomi Phones for Disputed Map: Report

    (Bloomberg) -- Vietnam will inspect all phones imported from China, such as Huawei and Xiaomi models, the Tuoi Tre newspaper reports citing Nguyen Hung Anh, head of Vietnam Customs’ anti-smuggling and investigation department.At issue is whether the Chinese-made phones come with preinstalled navigation apps that use maps reflecting Chinese territorial claims rejected by Hanoi, such as the expansive nine-dash line claims in the South China Sea that overlap resource-rich maritime areas Vietnam says are within in its exclusive economic waters. The U.S. has said the area under dispute could contain oil and gas reserves worth $2.5 trillion.Vietnam has been the most aggressive Southeast Asian nation pushing back on Chinese maritime claims. Its ships directly confront Chinese vessels off its coast in disputed territorial waters and the government bans and removes products that reference China’s controversial claims to large swaths of the South China Sea, from T-shirts worn by tourists to Hollywood movies.Vietnam last week seized all seven car models from China’s Hanteng Autos for using the China’s disputed map, the newspaper reported yesterday, citing Vietnam Customs Head Nguyen Van Can. Earlier, Vietnam said it would penalize Volkswagen AG’s local distributor and an importer for displaying a Touareg CR745J car at a motor show last month that featured the nine-dash line in the navigation map.The country also recently blocked screening of a Dreamworks Animation movie “Abominable,” co-produced with a Chinese company, that included a scene showing the nine-dash line.Vietnam Customs will send instructions to its local branches soon, the newspaper said. The agency, which typically responds only to formal requests made on paper, did not immediately respond to a request for comment via phone.(Updates with additional details of Vietnamese response, starting in third paragraph.)To contact the reporter on this story: Mai Ngoc Chau in Ho Chi Minh City at cmai9@bloomberg.netTo contact the editors responsible for this story: Chua Baizhen at bchua14@bloomberg.net, Derek Wallbank, John BoudreauFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • EU Warns Worst May Be Ahead as Euro-Area Resilience Wanes

    EU Warns Worst May Be Ahead as Euro-Area Resilience Wanes

    (Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.The European Commission cut its euro-area growth and inflation outlook amid global trade tensions and policy uncertainty, warning that the bloc’s economic resilience won’t last forever.The EU’s executive arm sees economic momentum remaining muted through 2021, forecasting an expansion of 1.2% for that year. At 1.3%, inflation is projected to remain well below the European Central Bank goal of just below 2% over the medium term.The updated projections, which put the Commission broadly in line with the consensus view among economists, reflect more pronounced weakness in the region, which has stumbled along with the world economy as tariffs disputes hit manufacturers and dent broader confidence. The institution warned that risks, which include the possibility of a disorderly Brexit, remain “decidedly to the downside.”“Adding to domestic economic shocks and policy uncertainty, the slowdown in global demand and weak trade has hit the European economy hard,” EU chief economist Marco Buti wrote in the report.While the strength of the labor market and the resilience of the services sector have so far prevented a more broad-based deterioration of momentum, Buti warned that “this resilience cannot endure indefinitely.”“Economic activity now looks set to slow down in a number of member states, which at first appeared immune,” he added.Manufacturers across the region have lowered their outlooks in recent weeks. Rheinmetall cut its full-year forecast citing a downturn in global automotive production, Siemens said weakness in the car and factory-equipment industries will lead to a decline in some business volumes next year, and Volkswagen’s finance chief warned of two tough years ahead for industry.The EU’s latest warning comes despite recent economic data suggesting the region’s manufacturing slump may be bottoming out. Progress in U.S.-China trade talks has also sparked cautious optimism that economic prospects would stop deteriorating.What Bloomberg’s Economists Say“Uncertainty has been a key factor in pushing growth below potential and forcing the ECB into a fresh round of easing. A return of uncertainty toward the pre-trade war level would help stabilize the 2020 outlook.”\--David Powell and Dan Hanson. Read the EURO-AREA INSIGHTMomentum in France proved more resilient than expected in the third quarter, and the Spanish economy maintained its pace of robust growth.At the same time, Germany probably slipped into a technical recession, with the Commission predicting only “muted growth” through 2021. Italy “still shows no signs of a meaningful recovery.”The Commission’s projections come with a call on countries including Germany to spend more.“Using available fiscal space actively would allow member states not only to provide a fiscal stimulus amid the sharp slowdown in manufacturing that threatens to spill over to the labor market, but also to refresh and modernize the public capital stock, thereby boosting potential growth,” the report said.That echoes demands by the ECB, which deployed fresh monetary stimulus in September in a package aimed at bolstering the economy in the face of global trade tensions. Outgoing chief Mario Draghi warned that euro-area governments should do more to support the central bank’s efforts with fiscal spending -- a message his successor Christine Lagarde has also pushed.So far, the message has fallen on deaf ears. German Finance Minister Olaf Scholz argued Thursday the country is in a “stable economic situation.”“We will have more growth in the next years,” he told reporters in Brussels. “If the trade tensions worldwide will be reduced, this will have a real impact on better growth.”(Updates with companies in seventh paragraph, Scholz in penultimate two.)\--With assistance from Nikos Chrysoloras and Zoe Schneeweiss.To contact the reporter on this story: Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Jana Randow, Paul GordonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Tesla Reaches Preliminary Battery-Supply Deal With CATL

    Tesla Reaches Preliminary Battery-Supply Deal With CATL

    (Bloomberg) -- Tesla Inc. has reached a preliminary agreement to start using CATL as a battery supplier for cars made in China from as early as next year, and the companies are in talks to expand the relationship globally, according to people familiar with the matter.Following months of negotiations, the companies clinched a non-binding deal after Tesla Chief Executive Officer Elon Musk traveled to Shanghai in late August and met with CATL Chairman Zeng Yuqun for about 40 minutes, according to the people, who asked not to be named discussing private deliberations. Though a final agreement is expected to be signed by mid 2020, there is no guarantee that will happen, the people said.The batteries would go into Model 3 cars produced at Tesla’s factory near Shanghai, which is slated to begin operating this year. But the companies still need to iron out details such as how many batteries Tesla will purchase, and separate discussions are underway on a potential global supply contract, the people said. Tesla will use batteries from Panasonic Corp. and LG Chem Ltd. in China in the meantime, one of the people said.Securing enough domestic batteries -- the costliest part of an electric vehicle -- is crucial to Musk’s efforts to expand in the world’s biggest car market. Chinese supply would allow Palo Alto, California-based Tesla to rely less on imports, reducing any impact from tariffs that have fluctuated amid the U.S.-China trade war. It’s also likely to please Beijing, which has prioritized the building of a world-leading electric-vehicle ecosystem.CATL rose as much as 7.4% to 78.88 yuan in Shenzhen trading on Wednesday and the stock headed for its highest close since mid-September. Tesla was little changed Tuesday.Representatives for Tesla didn’t respond to requests for comment. LG Chem and CATL declined to comment, while Panasonic wasn’t immediately available to comment.For CATL, whose full name is Contemporary Amperex Technology Co. Ltd., a final agreement would bolster its profile as one of the world’s emerging battery-making powerhouses. The company, based in the southern province of Fujian, already supplies domestic EV startups including NIO Inc., as well as global carmakers Volkswagen AG and Daimler AG.Tesla has been building the Shanghai plant, its first outside the U.S., for the past nine months, with mass production targeted to start at year-end. The company is also building facilities to eventually make batteries, but in the meantime, it’s agreed to purchase them from LG Chem. The South Korean battery maker won’t have exclusive rights to be Tesla’s battery supplier, people familiar with the arrangement said in August.Should Tesla agree to a global agreement, CATL would become its second such battery partner after Osaka, Japan-based Panasonic.What Bloomberg Intelligence Says“It’s a competitive blow to Panasonic as Tesla was relying on the Japanese battery producer only. But it’s a boon for CATL and LG Chem.”\--Kevin Kim, automobiles analystTesla is likely to try having several strong suppliers, giving it negotiating power as they’ll compete and drive down battery prices, said Kevin Kim, an analyst at Bloomberg Intelligence in Hong Kong. Having several partners also helps Tesla diversify risks such as faulty batteries resulting in fires.NIO Jumps 37% After Pact With Intel on Driverless Car TechnologyBatteries make up the bulk of an electric vehicle’s cost, meaning long-term supply deals with top carmakers can easily reach billions of dollars. The price of a China-built Tesla Model 3 will start at about $50,000, cheaper than foes including NIO’s best-selling ES6.(Updates with comment from analyst in 10th paragraph)\--With assistance from Kyunghee Park, Kae Inoue, Dana Hull and Gabrielle Coppola.To contact Bloomberg News staff for this story: Haze Fan in Beijing at hfan40@bloomberg.net;Chunying Zhang in Shanghai at czhang714@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Craig Trudell at ctrudell1@bloomberg.net, Ville Heiskanen, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Vietnam Punishes Volkswagen for Car With Disputed China Map

    Vietnam Punishes Volkswagen for Car With Disputed China Map

    (Bloomberg) -- Vietnam will fine Volkswagen AG’s local distributor and an importer for showcasing a car with a navigation app reflecting Chinese territorial claims rejected by Hanoi.VW Vietnam Auto Co. faces a penalty of 20 million to 40 million dong ($860-$1,724), while World Auto Co. will be fined 40 million-60 million dong and suspended from operating for six to nine months, the General Department of Vietnam Customs said in a statement on its website. The model, a Touareg CR745J, was displayed at a motor show in Ho Chi Minh City last month.Southeast Asian countries have clashed with China over maritime claims in the region, where Beijing’s so-called nine-dash-line encompasses waters the U.S. has said could contain unexploited hydrocarbons worth $2.5 trillion. Vietnam and China fought a war along their land border in 1979.Vietnam’s Ministry of Industry & Trade on Tuesday ordered its local units to step up inspections of imported goods that contain images or information of the nine-dash line. The ministry said cases of companies or importers found to sell, display or introduce products featuring the line are “very serious” as they hurt national security and sovereignty, and violate the law.Last month, Vietnam ordered cinemas to halt screenings of DreamWorks Animation’s “Abominable” because it showed the nine-dash-line on a map. There were also calls for a DreamWorks boycott in the Philippines and the movie was withdrawn from a scheduled debut in Malaysia. Another automobile importer was told last month to remove navigation apps that showed Chinese territorial claims.Uproar Over ‘Abominable’ Movie’s Map of China Spreads in AsiaA representative from VW Vietnam Auto declined to comment on the statement from the customs administration. VnExpress news website on Oct. 29 cited the distributor’s general director as saying the vehicle was showcased due to carelessness on its part.(Updates with statement from trade ministry in fourth paragraph.)To contact the reporter on this story: Mai Ngoc Chau in Ho Chi Minh City at cmai9@bloomberg.netTo contact the editors responsible for this story: John Boudreau at jboudreau3@bloomberg.net, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Germany Boosts Electric-Car Incentives to Stimulate Demand

    Germany Boosts Electric-Car Incentives to Stimulate Demand

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Chancellor Angela Merkel’s government and German automakers agreed to increase cash incentives for electric cars, intensifying an effort to move away from the combustion engine and reduce harmful emissions.A so-called environment bonus will jump by 50% to as much as 6,000 euros ($6,680) per electric vehicle and the auto industry will continue to cover half the cost, Merkel’s chief spokesman, Steffen Seibert, said in a statement. The changes will take effect this month and run through 2025, according to Bernhard Mattes, president of Germany’s VDA auto lobby.“It will therefore be possible to provide support for another 650,000 to 700,000 electric vehicles,” Seibert said. The measures were agreed Monday evening in Berlin between Merkel and officials from automakers, parts suppliers and labor unions, including the chief executives of Volkswagen AG, BMW AG and Daimler AG.The accord came a day after Merkel visited a revamped VW electric-car plant in Zwickau, eastern Germany. The chancellor has come under fire for failing to make more progress in curbing greenhouse-gas emissions, while VW -- the world’s biggest carmaker -- has invested billions in the shift to electric vehicles.Merkel’s Climate Protection Program 2030, unveiled in September, targets as many as 10 million electric cars on German roads by that year, a goal that most automotive experts say is unrealistic even with generous subsidies. As of the start of the year, there were about 420,000 electric and hybrid-electric vehicles in a national fleet of 47 million, according to the the University of Duisburg-Essen’s Center for Automotive Research.Merkel called the challenges facing the industry “a paradigm shift in mobility that has never been realized in automotive history.”Germany is closing in on Norway for European leadership with sales of almost 53,000 all-electric cars this year, according to the KBA, or federal motor transport authority. Per-capita it remains far behind the smaller country, and it’s still unclear how many German customers will ultimately switch to electric cars in a country with a rich automotive heritage centered on combustion engines.Subsidies make a difference because higher costs for development and batteries drive up the price of an electric car. VW’s ID.3, for example, will start at just under 30,000 euros, while the least-expensive version of the new combustion-powered Golf will be sold for less than 20,000 euros.The government’s push to promote electric cars includes boosting the number of public charging stations to 50,000 within two years, Seibert said. Automakers will help fund 15,000 of the stations by 2022. BMW has said it will install 4,100 charging points at its German locations by 2021, with about half being open to the public.Mobility Transformation“I see this as an absolute chance to now increase demand, which will be good for us,” Klaus Rosenfeld, chief executive officer of German automotive supplier Schaeffler AG, said in an interview Tuesday.“Anything that helps to achieve this mobility transformation, to increase consumer demand, is good for us, so in that sense we welcome the decision made today,” he added.Merkel said in a podcast Sunday that the government’s focus is on promoting electric vehicles, but that it’s also open to hydrogen technology. It wants 1 million charging stations to be in place by 2030, she said.Merkel’s $60 billion climate package failed to restore her reputation as a champion of the environment. Critics branded the measures, such as extra taxes on flights, as insufficient for a “climate emergency,” while economists criticized carbon price proposals as too shy an approach to spur emissions cuts.Big industry and some union leaders slammed Germany’s go-it-alone approach, saying it would harm jobs and businesses.Ferdinand Dudenhoeffer, the director of Center for Automotive Research, estimates a tally of about 5 million all-electric and hybrid car registrations by 2030. Reaching that level would be an achievement, he said in September.(Adds electric-car sales in eighth paragraph)\--With assistance from Oliver Sachgau, Brian Parkin and Stefan Nicola.To contact the reporters on this story: Iain Rogers in Berlin at irogers11@bloomberg.net;Arne Delfs in Berlin at adelfs@bloomberg.netTo contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Anthony Palazzo, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Ferrari Trails Behind Porsche in One Crucial Race

    Ferrari Trails Behind Porsche in One Crucial Race

    (Bloomberg Opinion) -- The mood music in the car sector is pretty melancholy right now because of Donald Trump’s trade wars and rising technology costs. But Ferrari NV is dancing to a different tune, thanks to its wealthy customers.Revenues rose 9% in the third quarter of 2019 and operating profit jumped 12% year-on-year, the Italian manufacturer reported Monday.Ferrari’s patrons are still ordering new cars despite worries that a recession might be around the corner; many are happy to pay a premium to personalize their vehicle. Ferrari was confident enough to raise its cash flow and profit guidance for 2019. On both metrics it should accomplish this year what it had planned to achieve in 2020. It even announced a more convincing strategy to extend its brand beyond cars, an area where it’s fallen short.The Italian company is making this look easy, but lifting sales while preserving exclusivity is a difficult balancing act in the luxury autos business; just look at the struggles of Aston Martin Lagonda Global Holdings Plc. That company’s shares have dropped 66% this year while Ferrari’s have gained 77%, valuing the prancing horse at more than 28 billion euros ($31 billion). That’s more than its former parent Fiat Chrysler Automobiles NV, which sells as many cars in a day as Ferrari does in a year. Investors would now have to fork out about 41 times estimated earnings to buy Ferrari stock, approaching the exalted 45 times multiple of handbag maker Hermes International. German premium carmaker BMW AG trades on less than 9 times earnings. While this is the very definition of a luxury problem for Ferrari, it still leaves very little room for error.When Ferrari listed its shares in 2015, it implored investors not to think of it as a regular carmaker but rather as a luxury goods company like Hermes. Much of that sales pitch made sense: Ferrari can charge plenty for its cars because customers expect them to hold their value or even increase. Its 25% operating profit margin is much higher than that of other carmakers and should be more resilient. There are waiting lists for some models. Unlike much of the industry, Ferrari sales held up in the last recession.Even so, it has to spend heavily on factory equipment and technology development (including for its struggling Formula 1 racing team). That will always be an impediment to matching Hermes’ operating profit margins, which exceed 35%.The biggest beef with Ferrari’s luxury company aspirations was that its non-car branded products, many produced under licensing agreements, weren’t appealing. What’s the point of a $100 Ferrari polo shirt or $250 wristwatch? Not so long ago you could even buy a Ferrari surfboard. While Ferrari dithered over how to improve things, the brand suffered.On Monday, the company sketched out a plan to slim down its clothing and accessories lines and move them upmarket with the assistance of Giorgio Armani SpA. Meanwhile, it will open driving simulation centers and expand in e-sports to get young customers excited about the brand. Within a decade it hopes these products and services will contribute about 10% of operating profit. That’s still far from certain — brand diversification is notoriously difficult — but the success of the core business leaves room for maneuver.Unlike peers such as Rolls-Royce Motor Cars and Volkswagen AG’s Lamborghini, Ferrari isn’t yet selling high-margin sports utility vehicles. The Italian carmaker’s Purosangue isn’t slated to arrive for a couple more years.But judging by Ferrari’s profit and loss statement, its refreshed product line, including the single-seat Monza SP1 and 812 Superfast, is delivering. Upcoming hybrid models such as the 1,000-horsepower SF90 Stradale supercar should increase confidence that Ferrari has the technical know-how for tougher emissions regulations.Still, it’s surprising that the carmaker seems in no hurry to build a fully electric car. Some caution is natural: An electric Ferrari won’t have the famous engine growl and some Ferrari purists are skeptical, management said on Monday’s investor call. Yet Porsche’s electric Taycan shows sportscar brands can deliver the same excitement with a much smaller carbon footprint. Ferrari proved skeptics wrong once before. It can do so again. To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Peugeot's Fiat Takeover Is Great for Some Investors

    Peugeot's Fiat Takeover Is Great for Some Investors

    (Bloomberg Opinion) -- Peugeot SA’s equity holders might not think much of its takeover of Italy’s Fiat Chrysler Automobiles NV but bondholders appear to love the idea. Fiat’s credit spreads (the extra yield above the benchmark) have tightened by as much as one-third after news of the deal emerged, accompanying a jump in the company’s share price. Peugeot’s shares fell sharply because of concerns about the premium it would have to pay, but the French company’s credit spreads modestly improved. It’s interesting that Peugeot’s shareholders and bondholders took such different views.One reason is that the European Central Bank is restarting its quantitative easing program, meaning there’s a big new buyer in the euro zone for investment grade corporate bonds. If Peugeot-Fiat becomes reality it will have the right hallmarks to attract Christine Lagarde’s Frankfurt institution. While there’s no firm deal yet, the credit rating agency S&P Global Ratings says the creation of the world’s fourth-biggest carmaker would support Fiat’s debt ratings.However, the ECB could be the real driver for shrinking both companies’ credit spreads. The central bank has just restarted its so-called corporate sector purchasing program as part of the 20 billion euro ($22.3 billion) per month QE bond-buying scheme. According to Mahesh Bhimalingam of Bloomberg Intelligence, there could be about 2.5 billion euros per month of corporate debt purchased.Fiat is already rated BBB- by Fitch Ratings, after being upgraded to investment grade from junk last November. This makes it eligible for inclusion onto the ECB’s list of potential purchases. Peugeot was junk-rated too until recently, but is now a stable BBB- across all the major ratings companies. Both companies were too late to feature in the first round of ECB asset-buying, which snapped up 178 billion euros of corporate bonds.The ECB isn’t going to suddenly build huge holdings in Fiat or Peugeot debt, but it’s logical to assume that it will look to add newly eligible industrial names. On average, the central bank owns about 20% of any holding’s total eligible debt. It doesn’t officially buy bonds to make a profit but it’s common sense to prefer an asset that offers some yield when compared to the negative rates of sovereign debt.Furthermore, as the chart above shows, the ECB likes carmakers. It probably owns up to 75 billion euros of debt in the three German autos giants, Volkswagen AG, Daimler AG and BMW AG. It would be strange indeed then if it didn’t acquire a decent chunk of the bonds in one of Europe’s biggest cross-border industrial combinations. That must put a supportive floor under the Fiat and Peugeot credit spreads.To contact the author of this story: Marcus Ashworth at mashworth4@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • VW Labor Boss Vows to Block New Turkey Plant Amid Violence

    VW Labor Boss Vows to Block New Turkey Plant Amid Violence

    (Bloomberg) -- Volkswagen AG’s powerful labor unions vowed to block the manufacturer’s plan to build a 1.3 billion-euro ($1.4 billion) factory in Turkey until violence triggered by the country’s cross-border offensive in northern Syria has stopped.“I want to say very clearly: the labor representatives repudiate approval as long as Turkey tries to reach its political goals with war and force,” VW’s global works council chief and supervisory board member Bernd Osterloh said in remarks published in a staff newspaper seen by Bloomberg.The world’s largest automaker put the project on hold last month after tensions escalated following the withdrawal of U.S. troops from Syria. The U.S. move opened the way for Turkish forces to cross into northeastern Syria, forcing back Kurdish militants who controlled the border area.The factory would be capable of building around 300,000 cars a year and provide a base for VW’s expansion in Turkey and the Middle East. The project would mark a milestone for the country in attracting foreign investment after a shaky economic period following a recession.Shares of Dogus Otomotiv, the distributor of VW vehicles in Turkey, reversed gains and traded down 0.7% at 1:53 p.m. in Istanbul following Bloomberg’s report.VW is concerned about the political situation and is monitoring developments, Chief Financial Officer Frank Witter told reporters on Wednesday. There’s no immediate time pressure to seek alternatives and capacity can be added at existing sites in Slovakia and elsewhere, he said.VW declined further comment.In the published remarks, Osterloh said VW guidelines on co-determination and social engagement at its plants require “an environment of stability and reliability.”Labor representatives have unusual sway over strategic decisions at VW. They account for half of the seats on the supervisory board and have far-reaching veto rights.The supervisory board is scheduled to meet Nov. 15 for the annual review of the manufacturer’s 5-year spending plans, which include capital allocation for its factories across all regions.(Updates with share prices in fifth paragraph)To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • In Indonesia, Fried Rice Is Getting Cheaper as Gojek Fights Grab

    In Indonesia, Fried Rice Is Getting Cheaper as Gojek Fights Grab

    (Bloomberg) -- Follow Bloomberg on LINE messenger for all the business news and analysis you need.Indonesia’s national dish of nasi goreng, or fried rice, has become a lot cheaper these days as the nation’s two big ride-hailing apps wage a price war on everyday groceries.In a battle for market share in Southeast Asia’s biggest economy, Gojek and Grab are giving discounts of as much as 50% and more on purchases made online or with e-wallets. Not only is the competition making food more affordable, it’s also keeping a lid on inflation and allowing the central bank to cut interest rates.Some of the key ingredients in nasi goreng -- rice, onions, eggs and chili -- could be bought this week from The FoodHall supermarket via the Grab app for 144,600 rupiah ($10.30). Those goods cost 156,186 rupiah if purchased directly from the same store in central Jakarta.It’s difficult to assess the direct effect online purchases are having on price-growth in the economy, but its certainly helping to “dampen inflationary pressures,” said Enrico Tanuwidjaja, head of economics and research for PT UOB Indonesia in Jakarta.Inflation eased to 3.1% in October from a year ago, the slowest pace in six months, staying well within the central bank’s target band of 2.5%-4.5%. Growth in food prices, which make up about 19% of the consumer price index, eased to 4.8% in October from 5.4% in September.Low inflation has allowed Bank Indonesia to cut interest rates four times this year to help support the economy amid a global slowdown. The bank is set to lower its inflation target band to 2%-4% in 2020 as price pressures remain subdued.Grab and Gojek -- fighting for dominance in a country of 267 million people and 355 million mobile phones -- have morphed from ride-hailing services to super apps, offering everything from food delivery to massages and furniture removal. The startups are racing to lock in customers as they win over billions of dollars of investment from the likes of Google, JD.com Inc., Tencent Holdings Ltd. and SoftBank Group Corp.Banks, Startups Build a $38 Billion Southeast Asia Fintech ArenaA country of some 17,000 islands, Indonesia has seen an explosion in e-commerce in recent years, with online transactions surging 230% last year, according to the central bank.Grab’s grocery service is via HappyFresh, another startup it invested in. With Gojek, a consumer can purchase groceries directly via the app or receive discounts and cash refunds when buying goods directly at a supermarket using its e-wallet.There’s still reason to be cautious on inflation though, since the discounts and cashback offers from the ride-hailing apps won’t last forever, Tanuwidjaja said.“Once you pull the plug, inflation may not necessarily stay muted,” he said.(Upates with inflation data in fifth paragraph)To contact the reporter on this story: Karlis Salna in Jakarta at ksalna@bloomberg.netTo contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Thomas Kutty AbrahamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Fiat Deal Would Leave Peugeot CEO With a European Headache

    Fiat Deal Would Leave Peugeot CEO With a European Headache

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.PSA Group and Fiat Chrysler Automobiles NV’s plan to combine into the world’s fourth-largest automaker will face a laundry list of challenges, with the bleak outlook for Europe near the top.The Peugeot car manufacturer and Fiat mapped out an accord Thursday for a 50-50 Netherlands-based holding company to be headed by PSA Chief Executive Officer Carlos Tavares. They said the deal would lead to 3.7 billion euros ($4.1 billion) in annual synergies without factory closures.Investors sent PSA shares tumbling as much as 14% after digesting the details, which show the French carmaker paying a premium of around 32%. Fiat shares rose as much as 11%.Read more: Plunging Peugeot Shows Who the Buyer Is in Merger of Equals (1)The combination would create a global powerhouse and leave Tavares, who has successfully turned around PSA and the loss-making Opel brand it acquired, to figure out how to integrate Fiat’s struggling operations in Europe. The Italian-American manufacturer published earnings Thursday that showed a widening loss in the region.“Fiat-Chrysler is in a very bad situation” in Europe, said Jean-Pierre Corniou, a partner at SIA consultancy in Paris. Only the American brands, RAM and Jeep are attractive, and the Fiat plant utilization rate is around 50% in some parts of Italy, he said.The contrast with PSA is striking. Sales of Fiat Chrysler branded cars including Fiat, Jeep, Lancia, Chrysler, Alfa Romeo and Maserati, fell 10% in Europe during the first nine months of 2019, based on data from the European Automobile Manufacturers Association. At the French carmaker, the second-largest in sales in the region, they were little changed, against an industry decline of 1.6%.The plan for their tie-up is unfolding at an exacting time for global car manufacturers who are having to grapple with a deepening industry slump and a wall of investment required for new technologies.The deal would bring together the billionaire Agnelli clan in Italy and the Peugeot family of France. Yet their deep national roots, along with the French government’s 12% stake in PSA, will make slimming down all the more difficult.France is one of the biggest shareholders of PSA, and while the government has signaled support for a deal, it has also warned it would scrutinize the jobs impact and governance structure of the new company.Italian Industry Minister Stefano Patuanelli also said the government would make sure the deal and expected cost cuts don’t affect jobs in Italy.Read More: Five Reasons Why France Is Backing a Fiat-Peugeot MergerThe combination makes economic and strategic sense, but “there are significant hurdles to overcome and execution risks,” Oddo BHF analysts wrote in a note. These include headcount and under-utilized plants in Europe as well as the challenge of gaining antitrust clearance for a company that would have a strong presence in France, Italy and Spain, they said.Looming large over operations in Europe are tougher rules on emissions that kick in next year. Carmakers’ fleets will have to comply with stricter caps, leaving Fiat vulnerable to future fines. The Italian-American company is a laggard on low-emissions technology whereas PSA plans to introduce seven electric vehicles by 2021 and offer either electric or hybrid versions of all models by 2025.Still, Fiat brings PSA a long-sought presence in North America, a market that’s traditionally been more profitable for the car industry. Tavares also has a track record of turning around European automotive operations.“Tavares’ playbook has been to take on loss making businesses and fix them, rapidly,” Bernstein analyst Max Warburton wrote in a note. “We believe he can achieve something similar at Fiat in Europe.”PSA and Fiat said they aim to reach a binding memorandum of understanding in the coming weeks. Goldman Sachs, D’Angelin & Co and Sullivan & Cromwell are advising Fiat Chrysler. Perella Weinberg and Mediobanca’s Messier Maris are advising PSA. The Peugeot family is advised by Zaoui & Co and Lazard is advising Exor.\--With assistance from Gabrielle Coppola.To contact the reporters on this story: Ania Nussbaum in Paris at anussbaum5@bloomberg.net;Daniele Lepido in Milan at dlepido1@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Kenneth Wong at kwong11@bloomberg.net, Tara Patel, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • VW lowers 2019 sales outlook as demand cools

    VW lowers 2019 sales outlook as demand cools

    Volkswagen lowered its full-year sales outlook on Wednesday, warning of slowing demand even as nine-month adjusted operating profit jumped 11.2% on increased demand for SUVs as well as Skoda and Porsche cars. The German carmaker said a slowdown in global demand would result in 2019 vehicle deliveries being in line with last year's figures, adjusting its previous forecast for a slight rise. "Despite the gain in market share, the Volkswagen Group anticipates that vehicle markets will contract faster than previously anticipated in many regions of the world," it said.

  • Billionaire Agnellis Make Another Bet on France

    Billionaire Agnellis Make Another Bet on France

    (Bloomberg Opinion) -- The automotive M&A carousel is taking another turn, with Peugeot SA and Fiat Chrysler Automobiles NV hopping aboard this time. The two companies confirmed on Wednesday that they are in talks about a potential merger that would create a $47 billion auto giant. This comes just a few months after Fiat abandoned talks to merge with Peugeot’s French rival Renault SA. And yet the news isn’t the least bit surprising: Peugeot and Fiat have both made clear in the past that they’re keen on consolidation, and indeed they’ve discussed working together before.Providing the two partners are willing to take tough decisions and politics doesn’t get in the way (again), the stars might just align this time. If anyone can make a go of a hugely complex trans-Atlantic auto merger, Peugeot’s self-assured CEO Carlos Tavares is surely that person.The main reason these two companies are talking is that they’re both sub-scale compared with industry giants Volkswagen AG and Toyota Motor Corp. That matters when the industry is spending heaps on things like electrification and autonomous driving. Neither company is a leader in these technologies, but sharing the financial burden would certainly help. It’s also helpful that their respective stock market valuations aren’t that far apart. This makes an all-share merger of equals conceivable and avoids one party having to shell out for a big premium.Renault long seemed the more logical partner for Fiat because roughly 80% of Peugeot’s sales are in Europe, where Fiat struggles to make money and has tried to diversify away from. However, Renault has drifted since the arrest of former boss Carlos Ghosn, its cash flow has deteriorated and its alliance with Nissan Motor is in need of repair. In short, it’s not a tremendously appealing partner right now.In contrast, Peugeot is in good health. Tavares has shown his mettle by rapidly turning around the Opel/Vauxhall business that Peugeot acquired from General Motors. And even Germany’s luxury carmakers are struggling to match the almost 9% operating profit margins that Peugeot is achieving, despite a pretty tepid European car market.While Fiat’s balance sheet isn’t as strong as Peugeot’s, there’s still plenty there to tempt Tavares. In Jeep and Ram, Fiat has a very profitable SUV and trucks business, and that U.S. footprint would be helpful if Peugeot decides to re-enter the U.S. market. So what could go wrong? Plenty. Fiat and Renault’s merger talks fell apart because the French state, a Renault shareholder, couldn’t get comfortable. And unfortunately for Tavares, France also owns a 12% stake in Peugeot.In theory France should welcome consolidation that strengthens a key domestic manufacturer. But the greatest financial benefits of a merger would come from rationalizing their respective manufacturing footprints — and that means cutting jobs.Still, Fiat Chairman John Elkann, head of the billionaire Agnelli clan, has doubtless learned a few lessons from his earlier entanglements with French politics. Once bitten, twice wiser? One way or the other, we’re about to find out.  (Updates with confirmation of the talks.)To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Will Tesla and Volkswagen Go Head-to-Head in China?
    Market Realist

    Will Tesla and Volkswagen Go Head-to-Head in China?

    Tesla has just begun trial production of the Model 3 at its Shanghai Gigafactory 3. However, it's set to face stiff competition from Volkswagen.

  • Volkswagen brings electric cars to Rwanda for ride-hailing service

    Volkswagen brings electric cars to Rwanda for ride-hailing service

    Volkswagen is importing a batch of electric powered Golf models into Rwanda for a local ride-hailing service, establishing a bridgehead in the country that it hopes to expand to other nations as it seeks to increase market share globally. Importing the vehicles into Rwanda, which sells itself to foreign investors on its reliable infrastructure, stability and relative ease of doing business, and where VW already assembles cars, is initially intended to test infrastructure and performance in the region's climate. "We’ve been investing more than $30 billion into new electric vehicles and platforms and the entire world is moving in that direction," VW's Africa boss Thomas Schaefer told Reuters.

  • VW ramps up China electric car factories, taking aim at Tesla

    VW ramps up China electric car factories, taking aim at Tesla

    FRANKFURT/ZWICKAU (Reuters) - Volkswagen AG is ramping up production of electric cars to around 1 million vehicles by end of 2022, according to manufacturing plans seen by Reuters, enabling the German carmaker to leapfrog Tesla Inc and making China the key battleground. Volkswagen is readying two Chinese factories to build electric cars next year. The Chinese plants will have a production capacity of 600,000 vehicles, according to Volkswagen's plans, which have not been previously reported - revealing VW’s ability to industrialise production faster than other pioneers in the electric vehicle market.

  • VW Finance Chief Outlines Road Map for $222 Billion Ambition

    VW Finance Chief Outlines Road Map for $222 Billion Ambition

    (Bloomberg) -- Days before production starts on Volkswagen AG’s cornerstone electric vehicle, the German manufacturer is stepping up a campaign to more than double its market value and gain investor recognition for the industry’s most ambitious technology push.In an internal newsletter sent last week, Chief Financial Officer Frank Witter prodded managers to get behind a goal to reach a valuation of 200 billion euros ($221 billion), arguing that a higher stock price will help VW keep pace with rivals and strengthen its hand in negotiations with future partners. Witter’s message confirms a goal reported earlier this month by Bloomberg.“We must increase our company value in order to stay competitive,” Witter said in the newsletter seen by Bloomberg. “A higher capital market value reflects profitability and financial strength along with the future viability of a company.”The need to act is evident in VW’s numbers. The world’s biggest carmaker leads Toyota Motor Corp. in deliveries and generates robust cash and profits. But its main global rival has more cost-efficient manufacturing operations and a market value of 24.4 trillion yen ($225 billion), versus about $95 billion for VW.VW’s lower valuation and earnings multiples suggest investors aren’t convinced the company’s 44 billion-euro plan will succeed in making VW a leader in electrification with new, money-spinning software-based services. The company starts production on the all-electric ID.3, a key entry in an e-car onslaught that will eventually span 70 models across the group, at its plant in Zwickau on Nov. 4, with an event to be attended by German Chancellor Angela Merkel.“We are tackling crucial future areas, among them e-mobility and digitalization, with resolution and determination,” Witter said. “That boosts our credibility and the capital market gains more trust in our future viability.”A VW spokesman confirmed the authenticity of the newsletter, which will be used to regularly update managers on developments in the capital markets, and declined to comment further. The company has linked compensation of its top executives more closely with share-price performance, and is phasing in the system across management ranks.The seven-point plan includes strengthening individual brands such as VW, Audi and Porsche, growth in China and boosting software operations.VW’s Seven-Point PlanStrong brands with clear positioning and great productsLeading position in China, with value-creating global growthEliminate complexity, industry-leading economies of scaleFull commitment to carbon-neutral goals and shaping e-mobilityTransform into a leading automotive software playerOptimize business portfolio and rigorous allocation of capitalDeliver on demanding financial targets and dividend goalsIndustry peers like General Motors Co., Ford Motor Co. and Daimler AG also trade at relatively low multiples, far behind cash-rich Silicon Valley giants like Apple Inc. and Waymo parent Alphabet Inc. that are plotting to grab valuable turf as technology challenges traditional automaking businesses. Meanwhile, better-than-expected quarterly earnings last week lifted Tesla Inc., valuing the company at $60 billion, more than GM and Ford.“We have a lot of potential within the group,” VW Chief Executive Officer Herbert Diess said on the sidelines of the presentation of the revamped Golf Thursday. “We can make better use of synergies internally.” Investors and analysts have intensified calls for VW to become more nimble and address an unwieldy conglomerate structure that includes 12 automotive brands. Porsche alone could be worth 100 billion euros in a potential initial public offering, according to Bloomberg Intelligence.The company has been weighing options for the Lamborghini unit, including a sale or a stock listing, people familiar with the matter said this month. While no decisions have been made, VW has started preparations to fold the Italian supercar brand into a separate legal entity. VW has said there is no plan in place for a Lamborghini IPO or sale.While Fiat Chrysler Automobiles NV unlocked value with the IPO of its Ferrari unit, now worth about $30 billion, key VW stakeholders have stifled similar moves in Germany.An asset review started in 2016 has brought few tangible results to date, beyond an aborted effort to sell the Ducati motorbike brand and an initial public offering of the trucks division this year after much internal wrangling.(Adds Tesla reference in 9th paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Tesla Is No Niche Automaker Anymore, Volkswagen’s CEO Says

    Tesla Is No Niche Automaker Anymore, Volkswagen’s CEO Says

    (Bloomberg) -- There appears to be a budding bromance between the CEOs of Volkswagen AG, the world’s largest automaker, and Tesla Inc., the electric-car company suddenly back on the ascent.At an event where VW was presenting the new Golf hatchback late Thursday, Chief Executive Officer Herbert Diess quibbled with reporters who suggested Tesla is in trouble because it’s too small.“Tesla is not niche,” Diess said in Wolfsburg, Germany, where VW is based. “The Model 3 is a large-series model and they are one of the biggest manufacturers of electric-car batteries.”“We have a lot of respect for Tesla,” Diess continued. “It’s a competitor we take very seriously.”Diess, 61, jumped to Musk’s defense on a day the billionaire needed little help dispelling doubters. Tesla shares soared 18% Thursday -- the biggest jump in 6 1/2 years -- following a surprise quarterly profit report. The rally vaulted the company back above General Motors Co. as the top U.S. automaker by market capitalization.The words of praise may have been a response in kind to Musk, 48, who tweeted last month that Diess was “doing more than any big carmaker to go electric.” Four years after VW admitted to cheating on diesel emissions tests -- a scandal that has cost the company more than $30 billion -- it’s committed to spend almost $50 billion on electric vehicles.The key question for Tesla’s planned global expansion is whether capital markets continue to provide funding for its growing operations, Diess said.“Scaling up globally is difficult,” he said. “The car industry is very capital intense, and electric cars make it even more capital intense.”(Adds VW CEO comment in seventh paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • VW speeds up production of next generation Golf

    VW speeds up production of next generation Golf

    Volkswagen will start deliveries of its new Golf hatchback in December after shaving an hour off the time needed to build its flagship model, the board member responsible for production at the VW brand said on Tuesday. Volkswagen's main factory in Wolfsburg, Germany is preparing to make 450,000 Golf cars a year with the manufacturing time of the eighth-generation model sped up by one hour per vehicle, Andreas Tostmann told journalists in a call. Because VW is able to re-use 80% of the tooling for its new model, VW will invest a midsized triple-digit million euros amount in overhauling production, the carmaker said.

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