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Strategy
Strategy
The Volkswagen brand is completely realigning with its TRANSFORM 2025+ strategy. Step-by-step, the brand is evolving into a leading, profitable volume manufacturer and is also seeking to play a leading role in the new world of automobility. Our target is to sell about one million electric cars per year by 2025 and to be the market leader in e-mobility.
The biggest model offensive in the brand’s history is at the heart of our strategy. Over the coming years we will be launching more than ten new models per year. The first phase focuses above all on SUVs: we will be widening our global SUV lineup to 20 models by 2020 and SUVs will account for up to 40 percent of sales volume.
The second phase from 2020 sees the launch of a new generation of fully-connected electric cars. Our I.D. family is based on the new Modular Electric Toolkit (MEB). With the MEB we are aiming to set an industry benchmark that extends to software and the ecosystem as well as the electric car. The brand mission: the iconic car of the electric age must be a Volkswagen.
We are improving the brand’s competitiveness in order to finance the necessary investments in the future from our own resources. The operating return on sales is to progressively increase to 6 percent by 2025. With the Zukunftspakt, the management and Works Council agreed a joint program to improve efficiency and productivity that is being systematically implemented.
A further key element of the TRANSFORM 2025+ strategy is the fundamental realignment of the organization. Flat hierarchies, an open discussion culture and entrepreneurial courage lay the groundwork for the transformation of the company. This is underpinned by a new mission statement and concrete targets for earnings power, sustainability and employer attractiveness. The strategy also includes a new leadership model and a broad-based integrity campaign.
“Last year, Volkswagen posted new records for unit sales and sales revenue. Our efforts are paying off. The transformation of the Volkswagen brand is making progress.”
Press releases
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Volkswagen agrees digital transformation roadmap for administration and production
Volkswagen continues to forge ahead with the company’s modernization and digitalization: Volkswagen will be investing up to €4 billion in digitalization projects through 2023 – mainly in administration but also in production. At least 2,000 new jobs related to digitalization are to be created. This has been agreed by the Board of Management and the General Works Council in their “digital transformation roadmap”. Agile working methods, improved processes and digitalization are to reduce the burden on employees and speed up processes. Tasks that used to be performed manually are to be simplified through improved IT. Consequently, up to 4,000 jobs in non-production units at Volkswagen AG Passenger Cars, Volkswagen Group Components and Volkswagen Sachsen GmbH will not be restaffed over the coming four years. A precondition for this is that tasks are eliminated as a result of digitalization, process optimization and organizational streamlining. In addition, further investments in Industry 4.0 and an associated increase in productivity of five percent per year in production units through 2023 were also agreed. Furthermore, the budget for training is to be increased by a further €60 million to a total of €160 million to take account of the human resources transformation under Volkswagen’s digitalization offensive. A uniform employment guarantee for Volkswagen AG and Volkswagen Sachsen GmbH through 2029 has also been agreed. -
China plays key role in Volkswagen Group’s e-mobility strategy
China will play a key role in the Volkswagen group’s global transformation and its accompanying decarbonization program. Thus, this year will see an intensified roll-out of new energy models. Volkswagen Group China aims to produce more than half of the group’s global objective of 22 million BEVs by 2028. To speed up its e-offensive, it will also launch a new joint venture in charging infrastructure. All this will lay the foundation for wide acceptance of e-mobility. Meanwhile, in the area of future technologies, Volkswagen Group China is combining its research power, with Volkswagen brand, Audi and Group R&D working together within the new ONE R&D structure. -
Volkswagen brand steps up pace of transformation
Volkswagen will be boosting the pace of its transformation following a solid fiscal year 2018. The brand is taking important steps this year to strengthen competitiveness on a sustained basis. This includes the start of the electric offensive, efficiency measures in production and further progress in productivity and margins. At the same time, the brand is rolling out an earnings improvement program aimed at achieving a sustained contribution of €5.9 billion from 2023. Measures include reducing complexity and optimizing material costs. The program will gradually start delivering results in the period from 2019 to 2022. Furthermore, efficiencies in administration are to be leveraged by a stronger focus on process digitalization. Furthermore, efficiencies in administration are to be leveraged by a stronger focus on process digitalization. -
Volkswagen develops automotive industry in Ethiopia
Volkswagen brand continues its engagement in emerging countries in Sub-Saharan Africa. In the presence of Frank-Walter Steinmeier, President of the Federal Republic of Germany, a Memorandum of Understanding (MoU) was signed by Thomas Schaefer, Head of the Volkswagen Sub-Saharan Africa Region, and the Commissioner of the Ethiopian Investment Commission (EIC), Abebe Abebayehu, today. Thereby, Volkswagen is taking the fast development of the country into account. Over the last ten years, the GDP growth rate in Ethiopia was above 8 percent – one of the highest worldwide. Moreover, Ethiopia is a priority and focus country for Germany under the G20-“Compact with Africa” initiative. -
Volkswagen brand to speed up operating return
The Volkswagen brand is to significantly improve its earnings performance in the coming years in order to finance investments in future technologies from its own resources. To this end, the model portfolio is being streamlined and the number of variants reduced. At the same time, productivity at the plants is to be increased and the platform orientation for vehicle production extended. Optimizing material costs is to contribute significantly to achieving the target return – without detracting from product substance. Administration processes will become even leaner. “We must force the pace of our transformation and become more efficient and agile. We cannot let up in our efforts and must realize further substantial improvements. What we have achieved so far is still not enough,” said Ralf Brandstätter, the brand’s Chief Operating Officer responsible for day-to-day business. -
Charge your electric car while you shop: Volkswagen and Tesco now partners in the UK
Volkswagen is working to develop areawide charging infrastructure for electric cars. This is why the brand has embarked on a strategic partnership with the Tesco supermarket chain in the UK. Over the next three years, more than 2,400 electric vehicle charging bays are to be rolled out at 600 Tesco stores. The cooperation will create the largest electric vehicle charging network in the British retail sector. The stations are to be operated by Volkswagen and Pod Point, one of the leading providers of charging infrastructure in the UK. -
Volkswagen implements electric strategy consistently
Following Zwickau, Volkswagen intends to change its plants at Emden and Hanover in Germany over to the production of electric vehicles. After Zwickau, Volkswagen is there-fore establishing its second e-mobility center in Germany in Lower Saxony. CEO Dr. Her-bert Diess: “Volkswagen is implementing its electric offensive consistently. We are orient-ing the company towards clean mobility. This way, we are also ensuring sustainable pro-spects for the future of the two plants.” At a works meeting held on Wednesday in Emden, HR Board Member Gunnar Kilian outlined the principles of the project to employees. In Hanover, the Chairman of the Brand Board of Management of Volkswagen Commercial Vehicles, Dr. Thomas Sedran, presented the plans. The orientation towards the production of innovative electric vehicles is part of the plant allocation plans on which the Supervisory Board will decide in Wolfsburg on Friday. -
Volkswagen nominates further battery cell supplier
With the South Korean battery cell manufacturer SK Innovation (SKI), the Volkswagen Group has named a further strategic supplier for electric vehicles based on the Modular Electric Toolkit (MEB). SKI will supply the batteries for North America and a share of the batteries for the production of Volkswagen Group full-electric vehicles in Europe. The most important strategic suppliers of battery cells for the equipment of the Group’s rapidly glowing electric fleet in the major regions of the world have therefore been nominated. -
Volkswagen targeting further boost in factory productivity
The Volkswagen brand’s TRANSFORM.TOGETHER production strategy targets a 30 percent increase in productivity worldwide by 2025 compared to 2018. Production is therefore making a major contribution to achieving the profitability target of over 6 percent for the brand. “We want to rank among the best for productivity. We need to generate competitive returns to enable us to make key investments in the future and thus safeguard today’s jobs tomorrow and beyond. Together, we are ushering in a new era in Production for the Volkswagen Passenger Cars brand. This is about nothing less than a paradigm shift: from a product-oriented company to a production-and process-oriented company. For Prodution, that means our department will be more important than ever going forward”, Dr. Andreas Tostmann, the Volkswagen Brand Board Member for Production, commented at an event held at the Berlin Motorwerk location attended by 500 managers from Volkswagen’s 17 vehicle manufacturing plants. -
Volkswagen’s digital transformation gathers speed
Volkswagen in transition: the company is speeding up the development of its ecosystem with its own software know-how and the strength of external partners. The automobile will evolve into a central hub in the Internet of Things. -
Volkswagen plans to produce some 1 million vehicles in Wolfsburg
Looking to the future, production volumes at the main plant in Wolfsburg are to rise to around one million. Higher productivity will enable higher capacity utilization. The groundwork is being laid in Wolfsburg in order to bundle Golf production at one location as set out in the Pact for the Future. Coinciding with the launch of the Golf 8, Golf production in Zwickau and Puebla is to be relocated to the main plant. The new SEAT Tarraco will also begin rolling off the assembly line in Wolfsburg soon. Dr. Andreas Tostmann, Member of the Board of Management of the Volkswagen Brand responsible for Production and Logistics, commented: “We are planning to increase productivity by 25 percent at all German factories by 2020 as agreed. Further efforts are needed at Volkswagen in future to remain competitive, particularly post-2020.” -
Volkswagen is systematically and vigorously advancing its electromobility offensive in China
The Volkswagen Group is expanding its successful business relationships in the People’s Republic of China. As part of the 5th German-Chinese government consultations, the Volkswagen Group China signed letters of intent with a long-time joint-venture partner, the FAW Group, and with the China Intelligent and Connected Vehicles (Beijing) Research Institute Co. Ltd. (ICV). The agreements cover the areas of e-mobility, connectivity, mobility services and autonomous driving. A day earlier, the Volkswagen Group China joined the automakers JAC and SEAT in signing letters of intent in which the three underscored their commitment to e-mobility. The aim of the partnerships is to draw on the support of the Chinese partners and to systematically and vigorously fuel the company’s far-reaching electro-offensive and to apply new technologies. -
Milestone in Africa: Volkswagen launches local assembly and Car sharing in Rwanda
The Volkswagen brand is expanding its engagement in Africa: today saw the start of its Integrated Mobility Solution in Rwanda that includes local vehicle assembly, innovative mobility services and a sales and service retail outlet CFAO Volkswagen Rwanda. Thomas Schäfer, CEO of Volkswagen Group South Africa and responsible for the Sub-Sahara region, officially launched the project in the capital Kigali in the presence of Rwanda’s President Paul Kagame. Volkswagen is thus taking the next step toward developing new up-and-coming markets. In a long-term perspective, the brand intends to play a leading role in the emerging automotive industry in Africa. With this engagement, Volkswagen is making a substantial contribution to Africa’s economic development. -
Volkswagen Group China’s mega-factory in Foshan will strengthen e-mobility strategy in China
Through the completion of the Foshan Plant Phase II, the Foshan production site’s capacity will double from 300,000 to 600,000 cars annually. As the first SUV-model of the Volkswagen brand built by FAW-Volkswagen, the T-Roc successfully rolled off the line in April this year. Together with the Audi Q2L, which will also start production this year, it is a vital building block in the fast growing SUV segment. -
Volkswagen AG, Ford to Explore Strategic Alliance to Extend Capabilities, Strengthen Competitiveness, Better Serve Customers
Volkswagen AG and Ford Motor Company today announce they have signed a Memorandum of Understanding and are exploring a strategic alliance designed to strengthen each company’s competitiveness and better serve customers globally. -
Successful financial year 2017: Volkswagen brand implements product and innovation offensive consistently
The Volkswagen brand can look back on a successful financial year in 2017. The brand sold 6.23 million vehicles and improved sales revenue to €80 billion. For the first time in five years, the operating result before special items increased, reaching the highest level since 2012, at €3.3 billion. The return on sales (before special items) improved from 1.8 percent in 2016 to 4.1 percent. The Volkswagen brand has therefore outperformed its targets for 2017. -
Volkswagen makes rapid progress in realigning its North American strategy
The Volkswagen brand continues to vigorously pursue its regional consolidation strategy in North America: Today Volkswagen launched the seventh generation of its most successful high-volume model in the region when the new Jetta celebrated its world premiere on the eve of the North American International Auto Show in Detroit. The Jetta is tailored precisely to the needs of customers in North America. -
Volkswagen's strategic realignment is delivering
The Volkswagen brand is moving ahead with the transformation initiated under its TRANSFORM 2025+ strategy a year ago. Implementation is running at full speed and the core brand of the Volkswagen Group has made progress in all the key action areas over the past 12 months. -
TRANSFORM 2025+ Volkswagen presents its strategy for the next decade
Volkswagen is comprehensively repositioning itself. The Board of Management of the Volkswagen brand has decided on the TRANSFORM 2025+ program which will set the course for the brand over the next decade and beyond. The new strategy focuses on clearer brand positioning across the various regions and segments, backed by significant improvements in efficiency and productivity. At the same time, the brand will be making massive investments in e-mobility and connectivity. Enthusiastic customers, earnings power ensuring a secure future, sustainable mobility and a new team culture will lay the foundation for the Volkswagen brand's journey to the future. The new vision which is valid throughout the world is: "Volkswagen: Moving People Forward".
Stories
Together with Ford to the future
Volkswagen and Ford are intensifying their cooperation in the strategic fields of e-mobility and autonomous driving. Volkswagen has already made some achievements in both areas. An overview:
Four billion euro for digitalization
Volkswagen presents the “digital transformation roadmap”: 2,000 digital jobs are to be created, agile working methods improved, and IT processes should relieve employees even more in the future.
“We must join forces for e-mobility, now!”
The transition to e-mobility is in full swing, and Volkswagen is one of its pioneers. In an interview, Professor Friedrich Prinz from Stanford University explains what remains to be done.
E-mobility as key-element
With billions already invested, the MEB platform and ID. family are now pushing Volkswagen’s electric offensive forward. We explain the reasons for this straight path.
"E-mobility needs priority!"
In a joint interview, one of the leaders of Germany’s Green Party, Robert Habeck and Volkswagen CEO Dr. Herbert Diess argue for a consistent collaborative approach to help electric vehicles achieve their breakthrough.
"Decarbonization" - WHAT?
Decarbonization is important to halt climate change. But what exactly is behind it? And what is Volkswagen doing about it?
The mega potential of the supply chain
Volkswagen is doing everything in its power to make its contribution to achieving the Paris climate targets. CO2-neutral components and raw materials play an important role. Check this overview and three info graphics.
Clean mobility: It's possible!
Volkswagen wants to do its part for climate protection. The road to getting there leads through a holistic e-mobility concept. Read all about the most important facts, together with two videos and five info graphics.
"We are open to e-collaboration"
Volkswagen is ready to open its new MEB electric platform to other manufacturers, thus reducing the costs of electric cars. Michael Jost, Head of Strategy for Volkswagen, highlighted this approach.
