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Supplying the Volkswagen Group

  • February 2013
  • -
  • Supplier Business
  • -
  • 140 pages

From being an automotive almost-ran in the early 1990s, Volkswagen has rebounded to become one of the world’s leading automotive manufacturers. The success the company is currently enjoying has its foundation in the idea that its cars must be good looking, technologically advanced and fun to drive, but while Volkswagen continues to produce models that generally combine these traits, it is the changes made beyond such fundamentals that have resulted in the inexorable growth of Volkswagen and its group partners.

One of the key strengths of Volkswagen can be traced back to the judicious selection of those companies which now make up the Volkswagen Group. With few exceptions, the various brands represent the group’s only offering in that segment, meaning that there is little crossover and little repetition. Yet despite this, the brands within the VW Group have managed to achieve considerable crossover in terms of part-sharing which has helped to drive down overall costs. Although in the past Volkswagen was content to take advantage of such part-sharing as the opportunities arose, this policy has now become the norm across the group as it further looks to reduce costs with the roll-out of a new platform strategy.

With the introduction of the New Small Family (NSF), MLB, MSB and the MQB platforms, Volkswagen has launched a series of chassis solutions which, teamed with a series of matched powertrain designs, the various group companies can use to produce more than 80% of their total global model mix. While the capital investment behind such a move is considerable, the advantages in terms of production efficiency, finished vehicle quality and overall cost reduction can be expected to improve margins and substantially increase the already prodigious cash liquidity controlled by the Volkswagen Group.

About this report

The specifics of how the VW Group has planned the introduction of these various platforms, the models that will be produced using the architectures and how the group is anticipated to move forward in terms of production and the effect this will have on suppliers delivering components across single or multiple regions are covered in Supplying the VW Group 2013.

UPDATE - March 2013: Now includes a new interview with Tom Loafman, Director of Purchasing, Volkswagen of North America

Table Of Contents

Supplying the Volkswagen Group
OVERVIEW

Introduction
Overall sales
Financials

PRODUCT AND PLATFORM STRATEGY

Strategy overview
Major model programmes
Platform strategy
Major platforms
Component sharing
Volume planning

PRODUCTION STRATEGY

Production strategy overview
Manufacturing network
Internal supply network
Modularisation strategy
Supplier parks
Cluster of reference
Strategies for manufacturing efficiency

PURCHASING STRATEGY

Purchasing strategy overview
Levels of vertical integration and outsourcing
Purchasing organisation
Purchasing offices
Key offices
Key purchasing personnel
Purchasing spending

SUPPLIER SELECTION

Supply base development
Major and strategic suppliers
Supplier selection criteria
Working with Volkswagen

GLOBAL SOURCING

Policy and plans

EUROPE

CHINA

NORTH AMERICA

SOUTH AMERICA

INDIA

PRICING POLICY

Cost reduction programmes and strategies
Payment terms
Raw material price management

QUALITY MANAGEMENT

Quality level
Quality management systems
Integration into product development
Management of sub-suppliers
Supplier awards

TECHNOLOGY

Technological positioning
Areas of focus
RandD spending
RandD organisation
Access to supplier technology
Approach to alternative fuels, electrification and fuel cells
Special vehicle development

INTERVIEWS

Tom Loafman, Director of Purchasing, Volkswagen of North America
Rob Rickell, GKN Driveline

OEM-SUPPLIER SURVEY RESULTS

Introduction to the SuRe Index
Methodology
Executive summary
Profit potential
Organization
Trust
Pursuit of excellence
Outlook

SWOT ANALYSIS - SUPPLYING VW

GLOBAL FOOTPRINT

FORWARD MODEL PROGRAMME

MAJOR SUPPLIERS - VOLKSWAGEN GROUP



LIST OF FIGURES AND TABLES

Figure 1: Global light vehicle sales, 2006-2011 (Source: IHS Automotive)
Figure 2: Comparison of global, European and Greater Chinese sales for 2009-2018.xlsx
Figure 3: The Volkswagen Taigun concept, unveiled at the 2011 Sao Paulo Auto Salon, uses the same platform as the Up city car
Figure 4: Volkswagen Global platform usage 2012 and 2018
Figure 5: A Volkswagen Up on the New Small Family assembly line at the plant in Bratislava, Slovakia
Figure 6: Dr. Francisco Javier Garcia Sanz, Volkswagen Group
Figure 7: The CrossBlue concept could serve as the basis for a new mid-size VW SUV in North America
Figure 8: Projected CO2 emissions from light vehicles in Brazil
Figure 9: J.D. Power and Associates 2013 U.S. Vehicle Dependability StudySM (VDS) [Source: J.D. Power and Associates]
Figure 10: The Volkswagen XL1 concept vehicle
Figure 11: SuRe Index 2010-2011
Figure 12: Volkswagen - Global assembly plant locations (Europe)
Figure 13: Volkswagen - Global assembly plant locations (Global)
Table 1: Volkswagen financial data overview (Source: Volkswagen AG, Reuters, Moody's, Fitch, Standard and Poor's)
Table 2: Total Golf sales (by Mark) [Source: Volkswagen UK]
Table 3: Global VW plant locations (January 2013)
Table 4: 2011 Volkswagen Group purchasing volumes (by brand and market)
Table 5: Supplier Requirements for Sustainable Development
Table 6: Research and development costs, VW Group
Table 7: Volkswagen plant locations with production forecast for 2013
Table 8: Volkswagen Global Sourcing Footprint
Table 9: Volkswagen - Forward Model Programme - by Global Nameplate
Table 10: Major suppliers - Volkswagen Group

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