Volkswagen plans to cut niche models like the Arteon hatchback and wagon to improve efficiency of its operations and in turn boost profits, the automaker said on Wednesday.
The new strategy, which aims to improve earnings by 10 billion euros (approximately $10.8 billion) and grow return on sales to 6.5% by 2026, without cutting jobs or wages, was announced by VW brand boss Thomas Schäfer at a meeting held with unions at Volkswagen Group's headquarters in Wolfsburg, Germany.
“We will focus on a small number of—though genuine—Volkswagen core models,” he said. “This will reduce complexity and deliver higher profits.”
Schäfer didn't provide a timeline for the discontinuation of the Arteon, but it will likely be when VW starts production of the similar 2025 ID.7 electric hatch (and soon-to-be wagon) at the Arteon's plant in Emden, Germany, around the end of the year.
2021 Volkswagen Arteon R
Schäfer didn't say which other models could be dropped.
A U.S. VW spokesperson confirmed the Arteon will survive into the 2024 model year, but didn't say whether there will be subsequent model years for it.
In addition to dropping models, VW will also look to reduce the number of options and variants within remaining model lines. This will start with the ID.7, which VW said will have much fewer configuration options compared to the current Golf.
There will also be further consolidation of platforms and production with other volume brands within the VW Group. An example of this is VW's upcoming subcompact EV previewed earlier this year by the ID.2all concept car. VW said fellow VW Group brand SEAT is taking the lead on the vehicle's development and production, as well as with similar models from Skoda, SEAT, and Cupra. Similarly, Skoda has been made the lead for VW's next Passat and the related Skoda Superb.