Volkswagen to shrink product portfolio by 2030, focus on premium segment: Report

German automobile giant Volkswagen plans to axe many internal combustion engine models around the world by the end of the decade and sell only a few cars. This product strategy comes in line with the automaker's overall plan to concentrate on producing more profitable premium vehicles, said its chief financial officer (CFO) Arno Antlitz to Financial Times.

The Volkswagen CFO said that the key target of the automaker is not growth. "We are more focused on quality and on margins, rather than on volume and market share," he added. In an attempt to achieve its goal of electrification, Volkswagen would reduce its range of petrol and diesel cars that are currently on sale around the world.

Currently, the automobile group sells around 100 different models spread across several brands including Volkswagen, Audi, Porsche etc. By 2030, the auto major plans to reduce its product portfolio by around 60 per cent in Europe only. Interestingly, Volkswagen's newly adopted product strategy marks a profound change in the auto industry, which has attempted to increase profits by selling an increased number of different models for decades, even if that required the automakers to sell the cars with heavy discounting.

Volkswagen has been increasingly focusing on electric mobility in a desperate attempt to salvage its brand image from the devastating effect of the dieselgate scandal that resulted in the automaker paying a hefty amount of fines around the world as punitive measures. In order to reduce the financial burden and make the company profitable, the consolidation of the product portfolio is a crucial step for Volkswagen and its subsidiary brands. Also, this would help the automaker to manufacture a majority of the group vehicles using a lesser number of platforms and shared technology as well.