Volkswagen to invest $4.5 bn for digital transformation

Volkswagen will invest up to 4 billion euros or $4.51 billion over the years to 2023 to digitalize its administration and production as part of the digital transformation strategy, Reuters reported.
Volkswagen office
The German carmaker said on Wednesday that it will cut up to 4,000 jobs in non-production units.

“At least 2,000 new jobs related to digitalization are to be created,” the Wolfsburg-based company said. Works council head Bernd Osterloh added there would be no forced layoffs until 2029.

Volkswagen’s core brand aims to raise its profit margin faster than previously planned despite rising investments in the development of electric vehicles. The Volkswagen brand aims to raise its profit margin to at least six percent in 2022. Most recently, the margin stood at 4 percent.

Volkswagen’s 2018 operating profit reached 13.92 billion euros or $15.8 billion.

Volkswagen earlier said it will use Microsoft Corp’s Azure cloud platform to provide all future digital services and mobility offerings across its entire fleet, the companies said on Friday.

From 2020, more than 5 million new Volkswagen-specific brand vehicles per year will be fully connected through Microsoft’s cloud and internet of things (IoT).

Volkswagen will establish an automotive cloud development office in Washington State close to Microsoft’s headquarters.

Volkswagen in January said it sold a record 6.24 million vehicles in 2018, registering growth of 0.2 percent compared with 2017.

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