Volkswagen mulls additional cost cuts to cope with Covid-19 impact

The management is reportedly discussing cutting R&D, investments and fixed costs

The Volkswagen assembly line in Germany. The car maker is mulling cost cutting measures to cope with a fall in demand amid Covid-19. Reuters

Volkswagen is considering more cost cuts to help cope with the economic impact of the coronavirus pandemic, a spokesman for the German automaker said on Saturday.

The issue was recently discussed at an internal event, the spokesman said, when asked about a report in industry magazine Automobilwoche.

"There were general deliberations about what further cost measures could be taken to respond to the pandemic," the spokesman told Reuters. "There are no concrete decisions yet."

Automobilwoche quoted Volkswagen chief executive Herbert Diess as telling top managers at a meeting on Thursday: "We must significantly cut R&D expenditure, investments and fixed costs compared with the previous planning."

The group's net liquidity would "continue to decline at least until July due to weak demand", the magazine, citing participants at the event, quoted Mr Diess as saying, adding that not all group brands would achieve a positive result in 2020.

This meant the main VW passenger car brand must reduce its so-called material overheads by 20 per cent, the magazine said.