VW Group to rearrange platform architectures, battery, software and mobility services
(Oilandgaspress) Volkswagen Group is focusing its strategic alignment. At its Capital Markets Day, the Group presented leadership principles that emphasize customer orientation, entrepreneurship and team spirit. The Group assigns responsibility for their return targets to the brands. To achieve these goals, strengthen profitability and cash flows in particular as well as reduce capital intensity , each brand is launching its own performance program for the first time. This involves a paradigm shift: Instead of pure volume growth, sustainable value creation will be prioritized in the future based on the “value over volume” principle. To enable them to fully exploit the economies of scale offered by the technology platforms, the Group is realigning its architecture, battery, software and mobility services. Regionally, the Group is focusing its investments on the world’s most attractive profit pools. In this context, the strategies for the important growth markets of China and North America were also refined. Based on the brands’ focused approach and performance programs, the Group is increasing its strategic return on sales target to 9 to 11 percent by 2030.
With the new steering model, Volkswagen Group gives the brands direct responsibility for financial targets, strategy and brand identities.
The brands’ performance programs, managed on brand group level, provide the framework for their further development. Shifting the focus from volume to value creation will strengthen the brands’ market positioning. To achieve this, the brands are focusing on improving their performance in terms of margins, product mix and vehicle features. In addition, new business models, such as mobility services, can expand the room for maneuver of the brands and tap additional profit pools. This is further supported by an efficient bundling of economies of scale as well as extensive cost-saving measures in the areas of development, materials, production, sales and fixed costs.
Oliver Blume, CEO of Volkswagen Group: “We are currently in exciting, yet challenging times. The automotive industry is transforming at an unprecedented pace, with e-mobility and digitalization in particular dominating the agenda of the future. We need to accelerate our own transformation even further to secure and enhance our competitiveness. Our new leadership team is poised to do this – with entrepreneurship and a clear commitment to sustainability and performance.”
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