Volkswagen Group Announces Major Changes To Core Business Model Photo:

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Kez Casey | Jun, 17 2016 | 0 Comments

2016 is shaping up to be a tumultuous year for the Volkswagen Group, with shockwaves from the EA189 diesel engine emissions cheating scandal still rocking through the company.

Described as the “biggest change process” in Volkswagen’s history, a new long-term future plan, dubbed TOGETHER - Strategy 2025, will see the company adopt a new set of goals and procedures to ensure the future success of the organisation.

To do so, Volkswagen will look to streamline its existing automotive business, analysing its modular chassis architectures and striving for even greater engineering and production efficiencies, via reduced complexity.

Electric vehicles also form a key part of the plan, with a whopping 30 purely-electric vehicles to be launched over the next ten years. Volkswagen estimates that by that time EVs could represent 20 to 25 percent of its total sales volume.

Volkswagen BUDD.e
Volkswagen BUDD.e

Along with changes to its business units, Volkswagen has its eyes new market opportunities, with autonomous driving and artificial intelligence being nominated as areas of interest for the group.

A cross-brand mobility business will also be established to handle ride-sharing, on-demand mobility services, “robotaxis”, and similar services, including Volkswagen’s recent strategic partnership with ride-hailing service, Gett.

Volkswagen also named its commercial vehicle divisions; MAN, Scania, and Volkswagen Commercial Vehicles in the plan, stating that it would strive to make the multi-brand Volkswagen Truck and Bus division the most profitable in its sector, putting to rest claims that those brands might be sold off.

To keep the changing business model on track, Volkswagen Group has also announced that research and development budgets would be handled more efficiently, resulting in cuts to the overall R&D budget.

Similarly, administrative and general expenditure would be reduced with a more detailed explanation for individual brands and divisions to be outlined at a later date.

“The Volkswagen of the future will inspire its customers with fascinating vehicles, financial services tailored to demand, and smart mobility solutions.” Volkswagen CEO Matthias Muller said.

“The Group will achieve competitive profitability, and so remain both an attractive investment and an excellent, reliable and secure employer. In short, Volkswagen will be an enterprise we can all be proud of.”

Greater detail about the plan, in particular the effect it will have on Volkswagen’s individual brands (Audi, Skoda, Seat, Lamborghini, Bugatti, Bentley, Porsche, Volkswagen Passenger, Volkswagen Commercial, MAN, Scania, and Ducati), will be outlined in greater detail over time.

In the short term, any immediate effect is unlikely to be seen, and with Volkswagen concentrating on improving efficiencies behind the scenes the public are unlikely to notice any major changes until the Volkswagen Group starts its push to move two to three million e-vehicles per year by the middle of next decade.

MORE: Volkswagen Group News

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