Volkswagen is looking to raise its profit margin faster than previously planned, aiming to achieve a six percent operating return on sales in 2022, three years ahead of the initial forecast. It is also set to redirect its focus towards electrification and digitalisation in a big way, Automotive News Europe reports.

The company says it will be investing more than 11 billion euros (RM53.9 billion) in e-mobility, digitalisation, autonomous driving and mobility services by 2023, of which nine billion euros will be spent on EV development. The portfolio of battery-powered models will be expanded from the two vehicle line-up now to 20 by 2025, with planned production set at over one million units.

Work on converting the Zwickau plant to be run exclusively as an electric mobility site is already underway, and the automaker’s plants in Emden and Hanover will switch to EV production from 2022. Two electric vehicle plants are also currently taking shape in Anting and Foshan in China, with production scheduled to commence in 2020.

Electric cars are also set to be built in the US in the medium term, although the company said no decision has been made about the production site as yet, although a decision on a location will be made soon.

In order to finance these investments, cost cutting beyond that previously planned is set to occur. The automaker will extend a cost savings and efficiency programme beyond 2020 and is looking at an additional three billion euros (RM14.2 billion) in cost savings by 2023. It was not revealed if jobs will be affected, but the company has ruled out forced layoffs.

The existing model portfolio is also scheduled to be revamped, with a “massive reduction” in complexity – in Europe, the brand will be discontinuing 25% of the engine-transmission variants with low customer demand in the coming model year.

Entry level models will only come with a manual transmission in the future and will no longer offer the option for an automatic transmission or all-wheel drive, said Volkswagen COO Ralf Brandstaetter. Further massive savings are expected from expanding the utilisation of the MQB platform in vehicle production to 80% by 2020 from the 60% now.

The automaker also expects the era of the internal combustion engine-powered car to fade away after it rolls out its last-generation of gasoline and diesel cars in 2026, although it believes that these conventional platforms will continue to be available in regions where there is still insufficient charging infrastructure.