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2025, the details of which will be developed over the next few months. The group is looking to take a step back from its previous aggressive pursuit of expansion, and realign its strategy and targets, in a bid to realize more qualitative growth, and not just quantitative growth. The company is also emphasizing more on the development of new energy vehicles. Volkswagen brand’s focus is on building plug-in hybrid electric vehicles with greater range, high-volume electric vehicles with a radius of up to 300 kilometers, a 48-volt power supply system (mild hybrid), as well as ever more efficient diesel, petrol, and CNG concepts. In Transition One could say that Volkswagen is now in transition. From a large group known for its large investments and expenditure in R&D, the group will now have to cutback and regroup to absorb the scandal and its repercussions. Revenues through the first nine months were up 8.5% year-over-year, carrying the positive effects of currency translations and product mix. However, the €6.70 billion ($7.24 billion) that the group set aside in its Q3 financial statements to cover recall
BA 453 | Business Strategy & Planning 14 related expenses led to Volkswagen’s first net loss in 15 years. More recently, the EPA and California Air Resources Board have jointly rejected the automaker’s December recall proposal for 2-liter diesel cars in the U.S. effected by the defeat device. Going into 2016, Volkswagen is already struggling due to poor sales in markets such as China and the U.S., where its sales volumes slid 3.4% and rose only 1.2%, respectively, last year, and it could be tough to ramp up sales, especially on the back of the emissions scandal. The aftermath of the scandal will weigh on the company’s operating performance. One can expect a couple of years or more before Volkswagen’s efforts to boost volumes, cut costs, and gain back customer trust, materialize. In the meantime, how is it going to sell that next car? Sources: “A mucky business.” The Economist, September 26, 2015. Web access March 4, 2016, -carmaker-threatens-engulf-entire-industry-and “Emission Impossible.”The Economist, March 5, 2016. Web access March 4, 2016, -emissions-scandal-largely-unscathed-bad-news Investor Relations, Announcement of New CEO, Volkswagen.Web access April 12, 2016, -section-1 Trefis Team, “The Yeas That Was: Volkswagen. Forbes, January 13, 2016. Web access March 4, 2016, -volkswagen-2/#6c33eaa215d0