How VW is going in the coming years

Herbert Diess remains at the top of Volkswagen even after the recent dispute with the works council, but has more managers at his side. When it comes to the future topics of electromobility and digitalization, Europe’s largest car company will add another billion over the next five years. These are the core results of the last VW supervisory board meeting in 2021 on Thursday. The overview:

What will happen to this? There is a mixed solution between the two extreme variants “This has to go” and “Nothing changes”, which were discussed after the conflict with the works council about his savings considerations: The 63-year-old can stay at the top, but is given a different cut his duties and company of new colleagues.

Core brand boss Ralf Brandstätter is to move up to the group board and in summer 2022 will also take over the China business for which Diess was previously responsible. The post will remain, the main brand VW Pkw will then be controlled by the current Skoda boss Thomas Schäfer. The overall coordination of the mass brands VW, Skoda, Seat and VW commercial vehicles will remain with Diess for a transitional period. His formal responsibility for the Cariad software division, which has already been one of his favorite areas, is new. The communicative cross-cuts around a possible job cuts had led to a power struggle with works council boss Daniela Cavallo.

Further personnel decisions: VW had been looking for a new IT position at corporate level for a long time, initially a position that it believed to be safe had been broken. Now the Wolfsburg-based company has struck gold with the former Deutsche Börse manager Hauke ​​Stars. With the Audi manager Hildegard Wortmann, another woman joins the board. Hiltrud Werner is stepping down as head of the legal department, followed by VW chief legal advisor Manfred Döss. The contract of HR director Gunnar Kilian is extended.

E-mobility, software and digital: When competing with competitors such as Tesla and Chinese e-car manufacturers, VW is digging deeper into its pockets. Over the next five years, 56 percent of the total amount – a good 89 billion euros – is to be spent on converting to alternative drives and on digitizing models and production processes. At the end of last year, the amount was 73 billion euros.

At the same time, Diess is expanding Cariad in order to increase the vertical range of manufacture of the software and control systems. The investments, especially in new technologies, can be made from their own resources despite the difficult global economic situation, it said on Thursday. In 2026, a quarter of the Group’s cars sold will be pure electric vehicles. Environmentalists are bothered by the fact that VW continues to have many large SUVs in its range.

More proprietary software is a key issue for many car manufacturers. They are also interested in preventing IT giants from the USA and Asia from setting the tone in the future – not only Apple should work on a vehicle. VW plans around 30 billion euros for digitization and autonomous driving alone by the end of 2026.

Total investments: If you add up all the categories, the Volkswagen Group estimates 159 billion euros over the next five years – also more than in the previous round (150 billion euros). Chinese joint ventures are excluded. However, the share of capital expenditure on property and development in the sales of the core auto division should decrease somewhat so that VW becomes more profitable.

Works and models in Lower Saxony: VW’s home country will again receive a large part of the sum with 21 billion euros. For the main plant in Wolfsburg, which is suffering from underutilization as a result of the chip crisis, a good 1.6 billion euros have been earmarked for vehicle production by 2026, according to the works council, a little more than at the end of 2020.

The supervisors approved the planning of a separate factory for the future electric core model Trinity from 2026. A six-digit number per year will be targeted in the last expansion stage. In addition, if there is particularly high demand, the first representative of the current E series, the ID 3 from Zwickau, will also be manufactured in Wolfsburg – initially with a parts supply, and in full production from 2024. VW also confirmed the new Sandkamp development center for 800 million euros.

The ID Buzz e-minibus will start at the light commercial vehicle headquarters in Hanover in 2022. The “Tesla Fighter”, a digital luxury-class SUV, planned for 2025, is now primarily being implemented by Audi. Porsche is withdrawing due to deviating platform plans – probably to Leipzig. Part of the capacity freed up is to be filled by an e-camper van (ID California) and offshoots of the multivan. The bodies of a new Bentley model are produced in Hanover. Autonomous driving is also controlled from here.

In Emden, after the departure of the Passat, the successor Aero will start in 2023, before that, from spring 2022, – as in Zwickau – the ID 4. According to the works council, the factory in East Friesland will be earning over a billion euros in the planning round.

There is also fresh money for the internal supply plants. Braunschweig is manufacturing new steering systems and axles, and the factory is also being prepared for the new SSP e-platform. In Salzgitter, the majority of the sum goes into building up battery cell production. With the partner Umicore, electrode material is to be produced that will be sufficient there for 20 gigawatt hours (GWh) per year from 2025. Later on, the amount of energy for cell production in other plants is set to increase to up to 160 GWh.

Other plants and brands: The locations in Saxony are being prepared for the production of further electric models. Chemnitz is also gearing up for new engine technology. The Kassel transmission plant receives additional funds for electrical parts, but also for new exhaust systems. Audi is expanding electrification in Neckarsulm, among other places. dpa