Volkswagen AG has formed a new management board that will be responsible for overseeing decision-making for the group's core brands, targeting savings of approximately $1.2 billion from production alone.
The company stated on Wednesday that the new cross-brand steering model will oversee the Volkswagen, Skoda, Seat/Cupra, and Volkswagen Commercial Vehicles brands, aiming to boost efficiency by streamlining processes and structures to build a more competitive organization.
Thomas Schäfer, CEO of the Volkswagen Passenger Cars brand and head of the Core Brand Group, emphasized, "The focus is on management efficiency—and on accelerating the speed of processes to create more competitive products."
He added, "The new governance model reduces costs, streamlines structures, and simultaneously increases our efficiency levels."
Due to this change, the number of management board members for these four brands will be cut by one-third once the restructuring is fully implemented this summer, with further streamlining of management layers anticipated in the medium term.
The company stated that functions for production, technical development, and procurement will now be managed at a cross-brand level by the board responsible for overseeing these brands.
It further added that, for production alone, the restructuring of the steering model is expected to unlock cumulative savings potential of 10 billion euros ($11.7 billion) by the end of 2030.
The company said, "The implementation of operational activities within the Core Brand Group will be faster, while the focus at the group level will concentrate on strategic synergy areas such as software and batteries."
Concurrently, Volkswagen announced that its automotive division's net cash flow and net liquidity for the previous year were better than expected, citing a reduction in working capital, along with capital expenditure and R&D investments that were lower than anticipated.
The German automaker stated that, based on preliminary data, its automotive business generated approximately 6 billion euros ($7.04 billion) in net cash flow for 2025, compared to 5 billion euros in the same period last year. This figure surpassed the company's expectation for net cash flow to be around zero.
The company also reported that the automotive division's net liquidity increased to over 34 billion euros at year-end from 31 billion euros at the end of September, exceeding the company's expectation of around 30 billion euros.
Volkswagen indicated that its investment ratio for this year is expected to be approximately 12% of the automotive division's sales. The company is scheduled to release its full-year 2025 results on March 10th.
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