More responsibility
VW board member Vollmer also takes over VWN, Seat, Cupra and Skoda
In mid-January, the VW Group announced the consolidation of production responsibility for the Brand Group Core. Strategic decisions are moving to the brand group level, while operational responsibility is divided into five regions.
Volkswagen is reorganising the management of its volume brands. As part of the restructuring of the brand group core, production, development, and procurement are being consolidated across brands. The aim is to accelerate decision-making processes, reduce costs, and decrease industrial complexity. A central element of this reorganisation is the 'future production governance'. The previous head of production for the VW brand, Christian Vollmer, will now take responsibility for the production of all volume brands in the newly created board of the brand group core. This means that production management will be clearly consolidated at the brand group level for the first time, moving away from sole brand sovereignty.
Strategically central, operationally regional
The future decision-making logic follows a two-tier model. Vollmer describes the new role distribution: 'Strategic decisions, such as those concerning investments or launches, will in future be made at the brand group level; the operational implementation of the decisions will take place at the regional level.' The more than 20 plants of the brand group core worldwide will be organised into five production regions. According to the company, several criteria were considered in their delineation: geographical location, legal framework conditions, existing networks, and synergistic vehicle projects.
In particular, the latter two points are likely the reason why one of the new regions consists of the Skoda plants in the Czech Republic, the multi-brand plant in Slovakia as well as the Skoda factories in India, as AMS learned from company sources. Since 1 January, André Kleb has been responsible for the regional management of the Brand Group Core plants on the Iberian Peninsula as chief production officer and reports to Vollmer. The staffing of the other regions is to be completed gradually by summer, according to Volkswagen to AMS.
New role for regional managers
Vollmer specifies the structure: "The regional manager leads the plants in his region and is responsible for the efficient planning and production of the vehicles. This includes responsibility for logistics, production planning and technology, project, product and launch management, productivity, as well as the implementation of efficient, regional solutions with other business areas such as procurement." For the plant managers on site, this means a stronger focus on vehicle production and operational optimisation. Cross-site topics such as planning and launch of new products will be increasingly consolidated at the regional level.
One billion euros by 2030
In the production sector, Volkswagen estimates the cumulative savings potential by 2030 to be around one billion euros. “This amount includes personnel costs that are saved, for example, through the synergistic bundling of functions at the regional level and the streamlining of decision-making processes. In addition, regional cost advantages are utilised through cross-location collaboration in the respective production clusters,” says Vollmer.
Various criteria were considered in the formation of the regions, such as the geographical location of the plants, legal frameworks in the respective countries, existing networks and synergistic vehicle projects.
Volkswagen is thus relying on a combination of strategic centralisation and operational regionalisation. Investment authority will in future lie at the brand group level, while the regions will be responsible for implementation, productivity, and efficiency. At the same time, brand-specific differentiation of the products is to be maintained. Even today, vehicles of several brands are manufactured in plants such as Bratislava, Kvasiny, Martorell, or Zwickau. This multi-brand capability is to be retained under the new governance structure.
With Vollmer at the helm of production, the brand group core is establishing a management model that relies less on parallel brand logics and more on a common industrial optimum. Whether the expected efficiency gains can be realised will be shown in investment speed, launch stability, and unit costs.
