Brand Group Core boosts operating result in first half – new Core Executive Committee strengthens cross-brand cooperation – AutoMart Canada

The Brand Group Core is consistently continuing its strategy of efficiency improvement and closer cooperation. On the basis of a new cooperation agreement, the organizational linkage of key BGC functions is changing from July 1, with effects on the structures and processes of the participating volume brands Volkswagen Passenger Cars, Škoda, SEAT&CUPRA and Volkswagen Commercial Vehicles.

The new board, the “Core Executive Committee” (CEC), which is comparable with a brand Board of Management at the Brand Group Core level, has now officially assumed its duties. The implementation of this new board is a key step in achieving a new quality of cooperation within the Brand Group Core. A cooperation agreement concluded jointly lays down binding transparency, information and liaison obligations between the brands and functions. This creates a seamless logic, with clear roles and responsibilities across all brands.

In future, the yardstick for cooperation will be the overall optimum for the brand group together with a new culture of joint decision-making. At the same time, the brands Volkswagen Passenger Cars, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles will remain autonomous as regards market responsibilities and brand identity.

This new structure is a response to growing competitive pressure and the increasing financial pressure which the brand group faces.

With its agreed strategy “Future Production Governance”, especially the production business area is giving a highly concrete demonstration of how the new steering model functions. The goal is a clear regionally oriented steering approach; in other words, responsibility will be pooled where it is most effective, i.e. in the regions of the world, near to the plants and near to business. In the first half of the year, key structures for this approach were created. The regional managements have been established and are assuming end-to-end responsibility for their production networks. At the same time, key steps were implemented within the organization: the Central Europe region was repositioned; comparable structures are also in place for the Iberian Peninsula and for Central Europe.

The groundwork has now been laid: fewer interfaces, clearer responsibilities and significantly greater steering capability within the regions. Away from complex, separate structures for the brands towards an integrated, high-performance positioning.

In addition, the reorientation of the steering model will provide a cumulative savings potential for the Brand Group Core of 1 billion euros up to 2030 in production alone.