Production

Our global, cross-brand production network safeguards the processes from the supplier to the factory and assembly line, and from the factory to dealers and customers. Enduring efficiency is a prerequisite for our competitiveness. We meet challenges of the future with holistic optimizations, forward-looking innovations, flexible supply streams and structures, and an agile team. In fiscal year 2019, the global vehicle production volume was slightly under the previous year’s level, reaching 10.8 million units. Productivity increased by around 4.0% year-on-year, despite the continuing difficult conditions in many markets.

“Intelligently networked” production strategy

Production is supporting the enhanced Group strategy TOGETHER 2025⁺ with its functional area strategy, “Intelligently Networked”. By intelligently connecting people, brands and machines, we aim to pool the strengths and potential of our global production and logistics and take advantage of the resulting synergy effects. We are guided in this by four strategic goals:

• Versatile production network
• Efficient production
• Intelligent production processes
• Future-ready production

With division-specific initiatives we have created content clusters in which expert teams work on the strategic topics relevant for production in the Group. Examples include the competitive design of our global production network, the reduction and offsetting of environmental impact throughout the production process, and digitalization with its implications for production and working processes and for collaboration. The overarching aim is to increase productivity and profitability.

With the production strategy, we have laid the foundations for the successful and sustainable enhancement of our production. We use regular reviews to ensure that we constantly align our activities to the current challenges.

Global production network

With twelve brands and 124 production locations, aspects such as consistent standards for product concepts, plants, operating equipment and production processes are key to forward-looking production. These standards enable us to achieve synergy effects, respond flexibly to market challenges, make optimal use of a flexible production network and realize multibrand locations. Currently, almost half of the 45 passenger car locations are already multibrand locations. The Bratislava site continues to serve as a prime example in the Group, producing vehicles for the Volkswagen Passenger Cars, Audi, Porsche, SEAT and ŠKODA brands.

The Volkswagen Group has set itself the goal of becoming a world-leading provider of battery electric vehicles by 2025. The basis for this is the introduction of the Modular Electric Drive Toolkit (MEB), which we are using to complement our range with additional battery-electric vehicles. We have been manufacturing battery-electric vehicles based on the MEB in Zwickau, the Volkswagen Group’s first electric car factory, since 2019.

In order to design multibrand projects and electric mobility to be cost-effective in conjunction with existing concepts, it is important to make production highly flexible and efficient. Making maximum use of potential synergy effects is also a decisive factor for the success of future vehicle projects. Using common parts and concepts as well as identical production processes enables reduced capital expenditure and provides the opportunity to better utilize existing capacities. The future will also see electric vehicle projects at multibrand locations such as Zwickau, Germany and Anting, China.

We are constantly enhancing our production concepts and aligning them with new technologies. The targeting process anchored in our strategy serves to realize ambitious targets in individual projects.

Production locations

The Volkswagen Group’s production network is comprised of 124 locations in which passenger cars, commercial vehicles and motorcycles, as well as powertrains and components are manufactured.

With 72 locations, Europe remains our most important production region for vehicles and components. There are 28 sites in Germany alone. The Asia-Pacific region has 33 locations. We have six locations in North America and nine in South America. The Group operates four locations in Africa.

2019 saw 89 production start-ups: 29 for new products and successor products, and 60 for product upgrades and derivatives.

Capacity utilization of the locations in the Volkswagen Group’s production network is further enhanced by supplying the locations with complete knock-down (CKD) kits for local assembly.

VEHICLE PRODUCTION LOCATIONS OF THE VOLKSWAGEN GROUP
Share of total production 2018 in percent

The Group’s production system

The aim of the Group’s production system is to continuously and sustainably improve production workflows at all the Group brand and regional sites. The Group´s production system is the key component for achieving excellence in processes in production and production-related environments; we are strengthening this on a continuous basis and increasing the extent to which it is used.

Leadership and individual responsibility are indispensable factors; they are made visible by treating each other with respect and are part of our culture.

Having our factories working at optimal capacity enables us to manufacture high-quality products that give customers maximum benefits at competitive prices. This is made possible by the standardization of production processes and operating equipment early on in the line, based on the principle of concept consistency. This ensures that common design principles, joining techniques and joining sequences, but also installation and connection concepts are applied in the development and production areas at the brands. The principle of concept consistency establishes a foundation for creating efficient logistics and manufacturing processes.

New technologies and digitalization roadmap

3D printing is still one of the key technologies for Industry 4.0 and digitalizing the automotive value chain. It is successfully used in select sites of the Volkswagen Group in the manufacture of components and also operating equipment. The process opens up wholly new opportunities in the areas of development, design and production. Due to the digital nature of the technology, which requires no tools whatsoever, components and operating equipment can be flexibly implemented directly from digital drawings, and completely new designs and component geometries can be created.

Developments for large-scale automotive production applications point to considerable potential for the future. To this end, Volkswagen leverages the diversity of the Group, achieved through close collaboration between its brands, and cooperates with leading technology providers and research institutions. Alongside new technologies, moving the IT architecture over to a cloud-based platform solution will be the main task in the coming years on the road to digitalized manufacturing. This will bring the Volkswagen Group closer to the project for the future Industry 4.0. The cloud-based platform with its simplified data exchange is a vital prerequisite for making innovations available rapidly across all sites. Examples include intelligent robotics and data analysis functions for analyzing and comparing cross-plant processes. The cloud-based platform can be used to scale new applications directly to all sites so that specific services and functions can be put into operation in the area of production and logistics at the Volkswagen Group. The entire project will take several years to be implemented. Volkswagen is creating its industrial cloud as an open platform with the goal of incorporating companies from the entire value chain. In the long term, the Volkswagen Group aims to integrate its global supply chain with over 30,000 sites of more than 1,500 suppliers and partner companies into the cloud, creating a constantly growing, worldwide ecosystem.

Environmentally efficient production

We are planning the production of tomorrow with our functional area strategy, “Intelligently Networked”. Emissions levels and the use of resources at Volkswagen Group locations require particular attention. The goTOzero Impact Factory program is developing specific steps for more sustainable production, with a vision of a factory that has no adverse environmental impact. Decarbonization, biodiversity and zero plastic waste in production are key elements of this program.

We are encouraging networking and communication between the brands worldwide in order to leverage synergies. Our environmental experts meet regularly in working groups. In addition, we provide training to our employees in environmental protection.

We record and catalog environmental measures in an IT system and make these available for a Group-wide exchange of best practices. In the reporting period, around 1,240 implemented measures in the area of environment and energy were documented in this system. They serve to improve infrastructure and production processes for passenger cars and light commercial vehicles. These activities are beneficial from an environmental and economic perspective. With a series of effective, innovative measures, we were once again able in the reporting period to reduce environmental indicator levels, such as those incorporated in the decarbonization index (DCI), while at the same time improving production processes.

GoTOzero Impact Logistics

To help achieve the goals of the Group’s goTOzero environmental mission statement in the area of logistics, Group Logistics is collaborating with colleagues from the brands in the goTOzero Impact Logistics initiative. This builds on the preceding Green Logistics initiative. Emissions are reduced by continuously optimizing the production and transport network. The use of new low-emissions technologies for transporting production materials and vehicles will also be analyzed and accelerated.

The measures the Volkswagen Group is taking to achieve carbon-neutral logistics include moving shipments from road to rail and CO₂ exemption of rail transport in collaboration with Deutsche Bahn AG. In addition, Group Logistics is putting the world’s first liquefied natural gas (LNG) powered roll-on/roll-off (RoRo) charter ships into service for transporting vehicles across the North Atlantic and is promoting the use of LNG trucks by freight forwarders working for Volkswagen.