FRANKFURT: German car giant Volkswagen said Wednesday it was targeting sales growth of five to seven percent annually until 2027, as the group bets heavily on electric cars and growth in China and the United States.

“While most revenues are still generated in Europe, the growth engines of the future will be China and North America,” CEO Oliver Blume told reporters in a call ahead of an investor meeting.

“We want to grow our sales by in average five to seven percent per year until 2027,” Blume said.

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Last year, the 10-brand group – which includes Porsche, Audi and Skoda – reported revenues of nearly 280 billion euros ($306 billion).

VW is also aiming for a higher return on sales of between nine and 11 percent by 2030, compared with a profit margin of 8.1 percent in 2022.

A wide-ranging cost-cutting plan as well as a new strategy handing the group’s individual brands more autonomy are expected to help achieve the new goals.

But a key focus will be on the electric transition, as the global battle for dominance in the EV market heats up.

VW announced in March that it planned to invest more than 120 billion euros in electrification and digitisation projects.

In China, VW has already fallen behind local manufacturers of electric cars like BYD.

Blume acknowledged the “dramatic speed and change of technology and innovations” in China where “a lot of new competitors” have sprung up.

But he said VW was determined to remain “the most successful international car manufacturer in China”.

China is VW’s most important market, accounting for around 40 percent of the group’s overall sales.

Blume said VW currently had a market share of 14-15 percent in China, and intended to hold onto it – partly by developing products “in China, for China”.

The company’s “very, very strong” internal combustion engine business in China would help generate the cash flow for “new investments for the intelligent, smart car approach and the technologies of battery electric cars”, Blume said.

North America also plays a key role in the group’s plans for the coming years, where VW wants to “significantly expand” its market share.

VW has “all the ingredients we need to grow” in the region, Blume said, including investments in new electric vehicles and a planned factory for battery cells in Canada.