Since January 1, 2019, the Volkswagen Group has had a new brand. With the realignment of Volkswagen Group Components, the Group is reinforcing its in-house supplier of components including engines, gearboxes, electric drive systems, steering systems and seats – at the same time as consistently leveraging synergy effects. 80,000 Group employees at 61 components plants throughout the world develop and produce vehicle components. Right from the start, the units will therefore be among the world’s largest automotive industry suppliers.
Dr. Stefan Sommer, Member of the Volkswagen Group Board of Management responsible for Components and Procurement: “We are consistently developing cross-brand positioning for Group Components, strengthening its competitiveness. Thanks to our manufacturing depth and product strength, we can measure ourselves with our best competitors. We are now sharpening our profile in the e-mobility field. Group Components is assuming end-to-end responsibility for the battery – from the development of cell production competence through to recycling. This is a key step for the entire Group.”
The Chairman of the Board of Management of Volkswagen Group Components, Thomas Schmall, says: “We are leveraging efficiency effects in our current business areas and aligning Group Components in a future-oriented way with new activities in the field of e-mobility. The new Group-wide steering system will ensure that efficiency and synergy effects are realized more effectively, networking between the plants is promoted and plant capacity is deployed in the optimum way across the Group brands. On the basis of the pact for the future, we already achieved considerable cost savings totaling more than €750 million at the German plants from 2016 to the end of 2018. By 2025, we will be able to increase this positive effect on earnings to a total of €2 billion. At the same time, we are investing massively in e-mobility. In 2019 and 2020 alone, investment in the production of e-mobility components will reach €870 million throughout the Group. The share of investment in e-mobility components has risen from five percent to the current figure of 40 percent. All in all, we are investing a total of €3.8 billion in the production of e-mobility components up to 2023 within the framework of the current planning round.”
Independent brand within the Volkswagen Group
With future-oriented business areas, efficient board control and a Group-wide added value strategy, Group Components has independent, competitive positioning. A Board of Management with three members is responsible for the business operations of the new brand under the umbrella of Volkswagen AG: Thomas Schmall as Chairman, Thomas Eichenberg as Board Member responsible for Finance and Wolfgang Fueter as Board Member responsible for Human Resources. The management team also includes the heads of the newly organized business areas, which extend across several plants: “engine and foundry”, “gearbox and electric drive”, “chassis”, “seats” and “e-mobility”. As the Group Board of Management Member responsible for Components and Procurement, Dr. Stefan Sommer is a member of the Supervisory Board of Group Components, a body with equal representation of the Board of Management and the Works Council.
Over the past three years, consistent preparations have been made for the establishment of Group Components as an independent brand. This development is based on the orientation of the product portfolio towards volume and scale effects and an increase in the efficiency and productivity of the plants. In 2015, the product portfolio was already analyzed with a view to focusing on products which would be competitive in the long term both in development and in production. Products which did not have a viable future or were uneconomical were deleted from product plans. On the basis of the pact for the future, fixed costs at the German component plants have been considerably reduced and productivity has been significantly improved since 2016. In order to earn the funds needed for future investments, for example in e-mobility, from the present product portfolio, investment efficiency was further improved. Partnerships or cooperation arrangements with other companies are also being considered, with a view to allowing economies of scale for lower-volume products.
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SOURCE: Volkswagen
