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UPDATE 2-Citing tailwind, Volkswagen targets profit recovery

· 03/16/2021 02:34
UPDATE 2-Citing tailwind, Volkswagen targets profit recovery

Targets 1 mln deliveries of electric vehicles in 2021

Aims for operating margin of 7-8% beyond 2021

Targets come a day after Volkswagen's Power Day

Adds detail, incoming CFO

- Volkswagen VOWG_p.DE is confident that cost cuts will help it raise profit margins in the coming years, the world's second-largest carmaker said on Tuesday, a day after outlining an ambitious electric mobility expansion.

"Our good performance in 2020, a year dominated by crisis, will give us momentum for accelerating our transformation," Chief Executive Herbert Diess said in a statement.

Volkswagen aims to more than double deliveries of electric vehicles to 1 million this year, it said, adding it would also apply a standardised platform model introduced for vehicle production years ago to software, batteries and charging.

Diess' comments come a day after Volkswagen unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla TSLA.O. nL8N2LD3JE

Volkswagen said it aimed for an operating margin of 7%-8% in the years after 2021, not specifying an exact year, confirming it would likely end 2021 at the upper end of a 5%-6.5% target corridor.

This will be achieved by 2 billion euros less fixed costs by 2023 compared with 2020, a decline of 5%, as well as a decline of 7% in materials costs over the same period, Volkswagen said.

"We aim to put the ambitious transformation of the Volkswagen Group on a solid financial basis," incoming finance chief Arno Antlitz said.

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(Reporting by Christoph Steitz; editing by Riham Alkousaa and Emma Thomasson)

((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))