Wednesday, November 16, 2005

Eos Launch to Be Delayed By 2 Months

Text from Reuters.
HAMBURG, Germany (Reuters) - Volkswagen, the world's fourth-largest carmaker, has delayed the launch of its Eos coupe-cabriolet model by two months to May 2006 due to quality issues, the company said on Tuesday.

A spokesman said that VW Brand Group chief Wolfgang Bernhard made the decision since some bugs in the system still had to be worked out.

Industry sources estimate VW will build 50,000 Eos cars per year.

Bernhard aims to cut warranty costs by up to 500 million euros (338 million pounds) by 2008 as part of the carmaker's "ForMotion Plus" restructuring programme that is designed to boost group pretax profit by 4 billion euros to 5.1 billion in 2008.

Warranty claims for cars up to a year old should drop by half by 2008 as well, despite his plans to launch 5-10 new models during the period while keeping annual investment at the brand flat at roughly 2.5 billion euros.

Bernhard, who has tied executive bonuses to quality performance, aims to cut the time during which problems are found in VW cars already on the road, and when they are solved in the production process, to 18 weeks from around 48 weeks.

He also plans to improve the brand's ranking in quality tests such as J.D. Power's much-followed dependability survey among U.S. drivers, in which VW recently placed 34 out of 37 badges.

"We must be able to compete in the top third in three years," he said in an interview with the German media in July.

A coupe-cabriolet is a model with a coupe silhouette that sports a retractable hardtop, allowing it to change to a cabriolet. Fewer and fewer cabrios entering the market these days come with a traditional soft material top.