VW - Skill Shortage

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https://www.cnbc.com/2018/08/01/reu...der-for-vw-to-meet-new-rules-of-the-road.html

* Volkswagen laments loss of engineering expertise

* New anti-pollution rules make financial targets tough

* Still paying price of "dieselgate" scandal (Recasts adding VW CEO comment)

WOLFSBURG, Germany, Aug 1 (Reuters) - Volkswagen warned that a shortage of engineers is hampering efforts to get its cars to meet new anti-pollution rules, clouding its sales outlook and overshadowing a forecast-beating 23 percent rise in underlying operating profit.

VW has seen a raft of engine experts depart since admitting to systematic emissions cheating in Sept. 2015. That has left the carmaker short of engineers now needed to work on models complying with stricter emissions tests, Chief Executive Herbert Diess said on Wednesday.

"Engine development expertise has been lost," said Diess, explaining that getting engines certified for road use has become a lot harder under a new Worldwide Harmonized Light Duty Vehicles Test Procedure, known as WLTP, that takes effect from September.

The carmaker last week poached BMW engine development expert Markus Duesmann to help overcome the problem, but warned that delays in getting road certification will result in bottlenecks for certain model variants between August and October.

"That impacts capacity utilization at our plants, so there will be closure days at our sites during this period," Diess said. Although VW is sticking to its delivery targets, meeting them will be hard.

"One thing is clear, though: this will be a titanic task for the second half of the year, particularly on the margin side," said Diess, who was promoted to the top job in April after running the VW brand.

In a press conference on Wednesday to discuss second-quarter results, Diess said the changeover to the WLTP test procedure poses, "The biggest volume and earnings risk for Volkswagen."

Volkswagen shares were down 1.3 percent at 1145 GMT.

The introduction of WLTP rules was accelerated in the wake of Volkswagen's diesel cheating. Regulators now take a much more granular look at vehicles and test car pollution levels much more comprehensively, Diess said.

"They look at what kind of tyres were fitted and whether the air conditioning is switched on," Diess explained.

In June, VW warned that production of up to 250,000 cars will be delayed because of WLTP and said last month it would be renting parking spaces to stockpile vehicles that cannot be sold.

DIESELGATE COST

Rival carmaker Daimler and supplier Valeo cut their outlooks citing the introduction of new stringent emissions standards and a slowdown in growth as a trade war and tariffs hamper global trade.

Automakers General Motors Co, Ford Motor and Fiat Chrysler Automobiles lowered their full-year profit forecasts last week due to escalating tariffs.

Although its sales have held up, Volkswagen is still suffering the financial consequences of the "dieselgate" emissions scandal almost three years since it broke.

The scandal has cost the carmaker 27.4 billion euros so far and second-quarter earnings took a 1.6 billion euros hit to cover a fine and legal expenses, it said.

A 5.5 percent rise in vehicle sales helped lift second-quarter operating profit before special items to 5.58 billion euros from 4.55 billion a year-earlier, compared with analyst consensus for 4.98 billion in a Reuters poll.

After special items, group operating profit dropped by 13 percent to 3.95 billion euros.

"These are solid numbers despite the legal expenses," NordLB analyst Frank Schwope, who has a "Buy" rating on VW, said on Wednesday.

Despite confirming its outlook for a full-year adjusted operating margin of between 6.5 percent and 7.5 percent, Volkswagen warned that sticking to its financial targets will be a challenge.

After special items, VW said it anticipates that its operating return on sales will fall "moderately short."

In the wake of its emissions scandal, Volkswagen accelerated a push to expand its portfolio of electric cars. The Wolfsburg-based carmaker said it could start serial production of solid-state battery cells from 2024 or 2025.

"We must not make ourselves dependent on a few Asian manufacturers in the long term," Diess said, explaining that advances in ceramic separators had raised the viability of mass production.

A solid state battery factory would likely be in Europe, or even in Germany under the right conditions, Diess said.
 
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Jimbobcook

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This sounds like alot of excuses lol

Stop building VWs and just make parts for us and all will be well.

27.4 billion is a fair chunk of money, won't take them long to make it back...

Cheers
 

Deleted member 103408

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Don't forget they have to build a battery factory / business from scratch and pay higher salaries to keep engineers and poach more from other companies.

Tesla are already there so its going to be interesting watching them all battle it out for the Elec market and from what i have heard that is another stop gap they are all looking for other power sources
 

Jimbobcook

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I love a good competition, makes things interesting.

Until they make a battery that can charge in minutes instead of hours and it goes like a stage 3 cupra at the same price then I'm not really fussed.

Electric is all too quiet lol they need to please the petrol head for it to work. Then again I struggle with a DSG so maybe I'm just mardy...

Cheers
 

Deleted member 103408

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Agreed about battery (which i still think is only a short term solution on both expense and environmental grounds) but maybe we are going to see a few more people complaining about delivery times as the cars wont be signed of for delivery - hence VW renting more space to store the cars.
 

Deleted member 103408

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and it appears that Audi have taken a better route for wltp

FRANKFURT (Reuters) - Audi has stepped up production ahead of a September deadline when it becomes harder to register vehicles as roadworthy, the German premium carmaker said on Friday.

From next month, vehicles need to pass new pollution rules known as the Worldwide Harmonized Light Duty Vehicles Test procedure, or WLTP. Cars which are registered for sale ahead of this deadline can still be passed on to dealerships after September.

The Ingolstadt-based manufacturer said it had ramped up production ahead of the deadline and therefore does not expect to see a drop in vehicle deliveries this year, even as it faces problems adjusting its portfolio.

"The company expects significant fluctuations during the year in production, inventories and deliveries, as well as in its key financials," Audi said in a statement accompanying its latest financial results.

"In this context, the first half of the year featured a significant increase in production levels for anticipatory stockpiling."

Several manufacturers including Audi parent Volkswagen and rival Daimler have said margins may suffer because of delays getting their fleet ready for the new road certification standards.

Audi added it expects its research and development expenditure ratio to be slightly above the long-term target corridor of 6.0 to 6.5 percent of sales.

Audi also assumes that the capital expenditure ratio will be also be slightly above its target level of 5.0 to 5.5 percent.
 
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