Brand Group Core
Volkswagen consolidates production, development and procurement across brands
From January 2026, Volkswagen will jointly manage central functions of the volume brands. A new brand group board is set to accelerate decisions, reduce costs by €1 billion by 2030, and reorganise the industrial base of the Brand Group Core.
About a year after the agreement on the future of the German VW plants and the associated plans for massive job cuts, the Volkswagen Group is now taking the next step. This time, however, it does not affect 'ordinary' workers, but its highly paid managers. As early as the end of 2025, the world's second-largest car manufacturer communicated its intention to consolidate its responsibilities on the Iberian Peninsula. Now, this journey is being continued: the Wolfsburg-based company wants to merge the management of central functions of its volume brands in the Brand Group Core. Production, technical development and procurement will be managed across brands in the future. The group is thus drawing further consequences from growing cost pressure, increasing complexity and parallel model launches.
The core of the reorganisation is a newly created brand group board, which makes the overarching decisions for VW, Skoda, Seat/Cupra and Volkswagen Commercial Vehicles. At the same time, the boards of the individual brands will be streamlined. In the future, they will each consist of four business management functions. As a result, the total number of board members in the Brand Group Core is to be reduced by around a third by summer 2026.
Central control instead of parallel lines
What sounds organisationally sober delves deep into the industrial logic of the group. Production, development and procurement are removed from brand sovereignty and brought together at the Brand Group Core level. Decisions on capacities, technologies or suppliers should no longer be made in parallel, but together. This is intended to reduce friction losses where similar questions have previously been answered multiple times.
The new brand group board brings more speed and control in the sense of the cross-brand optimum.
The focus is on management efficiency and a higher process speed for more competitive products. The new governance reduces costs and structures while simultaneously increasing the level of efficiency, according to Schäfer.
Production as a lever
The reorganisation becomes particularly concrete in production. Here alone, Volkswagen estimates the cumulative savings potential by 2030 to be around one billion euros. This is to be achieved through the new control model "Future Production Governance". The 20+ globally producing plants of the Brand Group Core will be organised into five production regions in the future. Regional managers will take on responsibility for planning, control and logistics across brands and countries. Regions should become more independent, react faster and use capacities more flexibly.
Less development effort, more scaling
The new structure is also intended to have an impact on technical development. By concentrating cross-brand development scopes more strongly, Volkswagen aims to reduce duplication of work. Platforms, modules, and processes are to be used more consistently together. As a result, individual development areas will lose autonomy, but economies of scale could, and indeed should, benefit from this.
The total investments within the Brand Group Core are to be raised to a higher level of efficiency, according to the OEM in its statement. Strategic topics such as software and batteries will remain at the group level. Operational decisions are moving closer to the brand group.
Lean leadership, clearer roles
In parallel with the functional bundling, the leadership architecture of the brands is changing. With four board departments per brand in the future, the focus is shifting more towards accountability for results, market positioning, and sales. Volkswagen formulates the principle as follows: strong business management and brand shaping in front of the customer, supported by a lean and efficient internal relationship. The full implementation of the new management model is planned by summer 2026.
Between strategy and factory gate
From an external perspective, this step is long overdue. In particular, for the workforce in Germany, this announcement is likely to be met with satisfaction, as employees have repeatedly demanded that not only they, but also management, should tighten their belts.
The reorganisation of the Brand Group Core is less an organisational reform and more an industrial policy step. It addresses exactly where complexity becomes costly: in parallel decisions, fragmented structures, and slow coordination. For the factories, this means more regional responsibility with simultaneously clearer guidelines. Whether the promised effects will occur, however, will not be evident in organisational charts, but in investment decisions, launch stability, and unit costs.
