Future Plan: Volkswagen Group is Entering the Next Phase of Transformation

The Volkswagen Group is entering the next phase of its transformation. To this end, the Group Executive Board has developed the "Group Target Picture 2030", a comprehensive program for the realignment of the Volkswagen Group. The objective is to make the Group faster, more resilient, more competitive, and even more innovative in the face of increasingly intense competition and geopolitical challenges. Initial steps have already been initiated; for example, complexity and the number of variants in the product portfolio are being reduced. Products, technologies, and development are being aligned even more closely with regional markets. Capacities in the production network are being adjusted to market expectations. Structures and the equity portfolio are being streamlined.

Over the past twelve months, the global situation has continued to change dramatically. Geopolitical tensions, rising costs – driven primarily by tariffs – growing regulatory requirements, and an increasingly intense global competitive environment have compounded the challenges facing the automotive industry in an already far-reaching phase of transformation. In response, the Executive Board of the Volkswagen Group has developed a comprehensive Future Plan that will make the company even more resilient against external influences and growing risks. This will strengthen its competitiveness and innovative capacity in the long term.

Technological excellence remains Volkswagen Group’s benchmark. The Group is streamlining its technology portfolio to leverage synergies and economies of scale to the fullest. Investments and development resources are being focused on the products and technologies that provide the most value to customers.

This does not mean lower quality, but rather a greater focus: for platforms, software, and driver assistance systems, the focus is on competitive solutions. Technological parallel structures are being eliminated, and synergies are being realized. The Group is freeing up funds by discontinuing niche models and overlapping offerings. Reallocating these resources to key areas allows the Group to achieve more with less.

Additionally, new digital and AI-supported development tools are taking efficiency to the next level by shortening development times and accelerating time-to-market for innovations. At the same time, the Volkswagen Group continues to leverage partnerships that deliver clear technological or customer value.

Overall, the Volkswagen Group is focusing on the key value drivers and reducing investments in non-core areas that do not offer added value for its customers. This is part of the Future Plan. It provides the right levers to strengthen the Volkswagen Group sustainably.

Every future model, from entry-level to luxury vehicles, will set the benchmark in its category for driving experience and technology. At the same time, complexity and costs will be reduced. To achieve this, the Volkswagen Group is aligning its product portfolio much more closely with customer needs. The model lineup will be streamlined by up to 50 percent. Development and production resources will be pooled, and unit volumes per model will be increased. In parallel, equipment options will be reduced by up to 75 percent. These will be replaced by clearly structured equipment packages that are easy to configure and provide direct cost savings to customers. For example: instead of offering over 2,300 seat variations, there will only be about 100 options in the future. The Group is eliminating features with low demand and scaling those that customers actually want. The result will be even higher quality at attractive prices.

To align its production network with the shifting market environment and intensified competition, the Group will further streamline its technical capacities and lower factory costs.

The target volume across all brands is around 9 million units per year, driven by demand. Before the pandemic, the company had built up capacity for around 12 million vehicles. It has already made significant progress by reducing this figure by two million units. Further steps will follow in China and Europe. The guiding principle is to maximize capacity utilization at the most cost-effective, and therefore most competitive, plants in the coming years. The Group Executive Board decides which models will be built where and when during the Planning Round, subject to Supervisory Board approval.

In addition to reducing overcapacities, factory costs must be cut further. Compared to other European locations, production costs at German plants are still too high. On a positive note, however, factory costs at the Volkswagen brand's German plants were successfully reduced by an average of 20 percent last year. This demonstrates that the chosen approach is effective. However, securing a successful future requires further boosting competitiveness. This is the basis for the ongoing reviews.

The Volkswagen Group is refocusing on its core automotive business. Its portfolio will continue to cover all vehicle segments, from entry-level to luxury. The Group is rigorously evaluating its equity holdings and investments based on their strategic contribution, returns, and capital efficiency. The goal is to sharpen the Group's focus, reduce complexity, and create additional financial flexibility. Future decisions will be guided by their alignment with the Group strategy, the value they add to the overall portfolio, and their potential for synergies.

The Volkswagen Group is pursuing a dual strategy. First, it is strengthening its competitive positioning. Second, the Group is capitalizing on regional growth opportunities and tapping into additional profit pools in high-margin areas of the mobility sector, such as after-sales, used cars, fleet operations, and insurance.

Most of the measures in the Future Plan are the responsibility of the Executive Boards of the Group, brands, and companies – such as the product portfolio, the technology roadmap, and the production network. Implementation is already underway and is being rigorously driven forward. Only a few of the measures require Supervisory Board approval. The Group Executive Board has the Supervisory Board’s support regarding the situation analysis, the need for action, and the overall concept. However, specific details require further review to ensure that all components of the overall package can be implemented swiftly.