Volkswagen has recently announced that the company will be investing a sum of 7.15 Lakh Crore in order to expand its ventures by 2018. The China venture of Volkswagen is said to separately invest a sum of Rs. 1.55 Lakh Crore having the same target.
Volkswagen has been successful in the launch of its cars like Polo and Vento in the market, as these cars have been sold in large numbers and has motivated the company to introduce new models. A large part of the lump sum investment that the company is making will be used for models that already exist in the market. The investment will be precisely for making the car more efficient and effective and also to introduce new models.
The company also has aims at setting up new dealerships and service units. The money would also be used for technological advancements and drivers. In order to meet the current demands, the company has been making quite a lot of expenses on new models and the use of advanced technology. The new investment plan is also to help the company reduce the expenditure that the company incurs including the expenses on fixed assets with greater importance on technology and innovation.
The Chinese venture of Volkswagen has been provided with a separate investment as the company is aiming to double its operating profit margin. Currently the objective is to increase the profit margin from 3.5 percent to 6 percent and a few plans have been chalked out in order to accomplish this goal.