Car Industry

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Car industry in general

The automobile industry is suffering from overcapacity and high costs. This is particularly the case for American firms, such as Ford and GM.

Volkwagen is facing similar problems, as high wages in Germany and laws making it tough to lay people off are making the firms “uncompetitive by at least 40%” (Wolfgang Bernhard, head of VW).

The company is planning to cut 20,000 jobs over the next three years.

In the mid-1990s, the strategy was for VW to use the same platforms for Skodas, Golfs, Seats and Audis. But this lead to “similar boxes with different badges”. Now the strategy is more modular, where parts are mixed and matched like Lego to produce a wider range of cars and hopefully serve the needs of an increasingly fragmented market.

See related article, Daimler-Chrysler