Volkswagen approved a three-year spending plan on Friday that laid the groundwork to reach its ambitious 2008 earnings target but stopped short of announcing radical restructuring measures.
The world's fourth-largest carmaker said it would invest around 6 percent of its annual revenue, maintaining financial discipline as it strives to improve pretax earnings by 4 billion euros by 2008 amid its "ForMotion Plus" restructuring plan.
"Based on these plans, we remain committed to our stated target of a pretax profit totalling 5.1 billion for 2008," VW finance chief, Hans Dieter Poetsch, said in a statement.
Volkswagen earmarked 22.7 billion euros over the next three years for its core automotive division to invest in fixed and financial assets, including capitalised development costs.
"It's disappointing. We had expected more action in terms of restructuring, such as outsourcing parts production or job cuts," said Dresdner Kleinwort Wasserstein analyst Jens Schattner.
"But it shows they are increasing capital efficiency by expanding the model range while reducing investments at the same time," he continued.
It said 10.9 billion of that to focus on successor models and new derivatives in almost all product segments, while a further 5.6 billion goes towards non-product investments such as press shops, paint shops and assembly lines.
Together, the 16.5 billion corresponds to a 6 percent investment ratio that is competitive with rivals', VW said. It said it no plans to expand production capacity.