Volkswagen shortens new car development to three years

Volkswagen plans to save €10 billion ($A16.2b) between now and 2026 by introducing radical new measures that include shortening the time it takes to develop a car from scratch.

VW said it previously gave engineers and designers 50 months to design, develop and engineer a new vehicle.

However, that timeframe will now be shortened to just 36 months as part of the European auto giant’s latest ‘Accelerate Forward/Road 6.5’ cost-cutting measures.

Volkswagen claims that although it’s slashing the time it takes to bring a car to market, the measures will be introduced “without sacrificing quality or safety”.

Cutting lead times will save more than €1 billion ($A1.6b) alone by the end of 2028, VW says.

Further costs will be saved by building 50 per cent fewer prototypes to conduct real-world testing. This measure is said to save around €400 million ($A650m) annually.

Other profit-boosting action involves efficiencies with procurement and an improved aftersales business, plus new production methods that, combined, will bank a further €770 million ($A1.2b) per annum.

Finally, Volkswagen says it will implement “socially acceptable job cuts”, with all employees born before 1967 offered early retirement. An existing hiring freeze will also stay in place.

In the future, VW says it will also slash its administration staff costs by around 20 per cent.

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