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Volkswagen, facing challenges in a competitive automotive landscape, has informed its employees to brace for potential job cuts as the company aims to save €10 billion. The move is part of the automaker’s strategy to address inefficiencies, high costs, and regain competitiveness in a rapidly changing industry.

Company Struggles and Cost-Cutting Measures

Volkswagen is currently grappling with a decline in market share in China, the need to navigate the competitive landscape posed by Tesla, and a temporary production pause for its electric vehicles in Europe due to sluggish demand. Thomas Schaefer, CEO of the VW brand, candidly stated at a recent staff meeting that the company is “no longer competitive” in its current state, citing high costs and inefficiencies within the organization.

During the meeting at the Wolfsburg headquarters, Schaefer emphasized the need for change, stating, “With many of our pre-existing structures, processes, and high costs, we are no longer competitive as the Volkswagen brand.” Gunnar Kilian, a board member for human resources, acknowledged the possibility of job reductions, with some employees considering partial or early retirement. However, he emphasized that the majority of the targeted €10 billion in savings would come from measures beyond job cuts, details of which will be revealed later.

Addressing Inefficiencies and Duplications

Kilian urged the company to be “brave and honest enough to throw things overboard that are being duplicated within the company or are simply ballast we don’t need for good results.” The company aims to streamline its operations, eliminate redundancies, and optimise processes to achieve cost savings and enhance overall efficiency.

This announcement follows earlier warnings from Schaefer in June, where he alerted VW managers about rising costs, stating, “the roof is on fire” and emphasising the need to address cost challenges across various areas within the company.

Volkswagen’s cost-cutting strategy reflects the broader challenges faced by traditional automakers as they navigate an industry undergoing significant transformation, including the rise of electric vehicles and changing consumer preferences.

Volkswagen has introduced its newest entrant for the world of competitive rallying called the Polo R5 GTI. Based on the sixth generation road car of its namesake, the Polo R5 GTI will be made available as a complete rally version for professional teams and aspiring drivers to enable them to compete in championships across the globe.

“With the Polo GTI R5 we are hoping to transfer our expertise from four WRC titles to customer racing successfully, and offer a first-class racing machine for countless rally championships from national series to the WRC,” said Volkswagen Motorsport Director Sven Smeets.

“Before the first race outing next year, we will subject the Polo GTI R5 to rigorous testing to make sure it is prepared for the extremely varied track conditions around the world,” he later added.

VW has released a simplified sketch of the car, which isn’t much to go on, but does provide us with a glimpse of what the car might look like. That said, it should resemble the standard Polo with the exception of aerodynamic and safety upgrades as per performance requirements.

Development of the car started earlier this year under the stewardship of Volkswagen Motorsport Technical Director, François-Xavier “FX” Demaison. He was also running the shop when the record winning Polo R WRC rally car was developed and built. As such, Demaison knows a thing or two about creating winning platforms.

Like the road going version, the Polo GTI R5 features a four cylinder turbo engine, which in this case has been tuned to develop 270bhp. It is mated to a 5-speed sequential racing transmission that sends power to all four corners via the AWD system. The car has also been fitted with a comprehensive safety package which is a requirement to compete in the R5 category.

This R5 category was created to give privateers, teams and importers the opportunity to contest national, regional and international championships with cost-effective, powerful rally cars. It allows for a more level playing field and one that isn’t reserved for only factory-backed teams.

Volkswagen will begin importing its cars to Iran after a 17 year absence. Heavy international sanctions were levied against Iran due to its unscrupulous nuclear programme. However, in 2016 the United Nations decided that it was satisfied with Iran’s cooperation on the matter and decided to lift these sanctions.

Mammut Khodra, a privately owned company in Iran will be the official Iranian importer of the Groups’s Scania and Volkswagen vehicles. It will initially distribute vehicle through eight different dealers, placing an emphasis on the Teheran region.

Mammut Group, parent company of Mammut Khodra (Khodra means automobile), was established in 1995. And is one of the biggest private industrial companies and employers in Iran, which is active in the fields of automotive, construction, IT, logistics, telecommunications and financial services.

Speaking the collaboration, Anders Sundt Jensen, project manager for the Iranian market at Volkswagen, said, “By returning to Iran, the Volkswagen brand is filling in another blank spot on the global automotive map. We are thus strengthening our international presence still further. At the same time, we are taking our very latest models with premium features to our Iranian customers.”

Volkswagen will be importing the Tiguan and Passat to the Iranian automotive market to offer car buyers more modern, smarter and safer vehicles. Iranians haven’t seen a new VW since the Gol was launched in the 1990s. Up until then, Volkswagen passenger cars have been a common sight on their roads because the Beetle and Bulli were favourites over there from the 1950s onwards.

The German automaker completely withdrew from the Iranian market in 2000 and the 17 year gap has meant that it has lost touch with the needs and wants of customers in that country. As such, the initial aim of reintroducing these vehicles to the market is to gain an insight into needs of the current market and offer Iranians modern technologies that are made in Germany.

The Iranian government has stated that there will be about 3 million new vehicle registrations in their passenger car market per year in the near future. But we shall have to wait and see if that becomes a reality in the next few years.

Volkswagen will be debuting the new up! GTI at this year’s GTI Meet at Lake Wörthersee, which will take place from 24th to 27th May 2017. The performance up! builds upon the the small and cheerful city car making it into an improved performance car with decent handling characteristics. Whether or not the market is ready for such a performance city car remains to be seen, but based on past history, VW has been known for disrupting trends and generating an interest in a whole new genre of vehicles that people didn’t know they wanted.

The GTI moniker was first introduced in the 1970s when the German automaker decided to make a performance version of its standard family hatchback, the Golf. Back in the day, only big sedans and expensive sports cars had the performance to offer heart-racing driving action. Their big displacement engines and raw power made the vehicles very expensive and out of the reach of the common man. Well, Volkswagen was having none of that, and set out to create car that offered sports car-like performance but on a shoestring budget.

Their efforts eventually came to fruition with the introduction of the first generation GTI. There were very few subtle cues that set the car apart from the average run of the mill Golf. It had a thin red stripe stretching across the entire length of the front grille, black double stripes across the side sills, black stripe on the tailgate and of course, several GTI badges. The car had a near 110bhp engine and weighed just 810kg, which meant 0-100km/h sprints could be accomplished in just 9.0 seconds and the car had a stop speed of 182km/h.

Over the years, the GTI has grown in size and weight to comply with safety regulations as well as the needs and wants of the modern consumer. Due to this fact, The present day GTI hasn’t retained much of the original’s DNA. But with the up! GTI, things are a lot more similar. It weighs 997kg and under the hood is a turbocharged 113bhp TSI engine, which allows the car to accelerate from 0-100km/h in just 8.8 seconds. In essence, the up! GTI can be considered as the modern day equivalent of the first generation GTI.

It comes with with the usual GTI striping on the bodywork, 17-inch alloy wheels, a spoiler for better downforce, leather-trimmed sport steering wheel, GTI gear knob and the iconic “clark” seat pattern.

One can be so bold as to call the up! GTI a direct descendant of the iconic car that started the hot hatch revolution and hopefully, paves the way for the development of many more performance-based small city sized hatchbacks.

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