IHS AUTOMOTIVE Supplying the Volkswagen Group SupplierBusiness 2015 edition supplierbusiness.com SUPPLYING THE OEMS Volkswagen Julian Buckley Principal Analyst IHS Automotive | Supplying the Volkswagen Group Contents Overview 5 – Russia 51 Global market overview 6 – Slovakia 51 Volkswagen Group financial overview 7 – Poland 52 – India 52 Product strategy 8 – Future plants 52 Company history and strategy review 9 Internal supply network 53 Major model programmes 10 Modularisation strategy 53 – 1. Volkswagen Golf 10 Supplier parks 54 – 2. Volkswagen Jetta 14 Cluster of reference 55 – 3. Volkswagen Passat 17 Strategies for manufacturing efficiency 55 – 4. Volkswagen Tiguan 19 – 5. Volkswagen Polo 20 Purchasing Strategy 56 – 6. Volkswagen Lavida 23 Purchasing strategy overview 57 – 7. Škoda Octavia 24 Levels of vertical integration and outsourcing 57 – 8. Audi A4 26 Purchasing organisation 58 – 9. Volkswagen Gol 28 Purchasing offices 59 – 10. Audi A6 30 Key purchasing personnel 60 Purchasing budget 61 Vehicle Platforms 33 Platform strategy 34 Supplier Selection 62 Major platforms 35 Supply base development 63 – 1. PQ35 35 Major and strategic suppliers 63 – 2. PQ25 35 Supplier evaluation criteria 64 – 3. MQB A/B 36 Working with the Volkswagen Group 65 – 4. MLB B/C 37 – 5. PQ34 38 Global Sourcing 66 – 6. PL/PQ46-47 38 Policy and plans 67 – 7. PQ22 38 – EMEA 67 – 8. PQ24 38 – APAC 68 – 9. PL71-72 39 – NAFTA 68 – 10. PQ12 39 – LATAM 69 Component sharing 40 Pricing Policy 70 Volume planning 40 Cost reduction strategies 71 Production Strategy 42 Raw material price management 71 Production strategy overview 43 Payment terms 72 Manufacturing network 44 Quality Management 73 – Germany 45 Quality level 74 – China 47 Quality management systems 74 – Brazil 47 Supplier integration into product development 75 – Mexico 48 Management of suppliers and sub-suppliers 76 – United States 49 Supplier awards 76 – Czech Republic 49 – Spain and Portugal 50 IHS™ AUTOMOTIVE Copyright notice and legal disclaimer © 2015 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. IHS and the IHS logo are trademarks of IHS. For more information, please contact IHS at www.ihs.com/CustomerCare. © 2015 IHS 2 2015 edition IHS Automotive | Supplying the Volkswagen Group Technology 78 Organization 99 Technological positioning 79 ––OEM level 100 Areas of focus 79 Trust 100 R&D organisation 80 ––OEM level 100 R&D spending 81 Pursuit of excellence 100 Access to supplier technology and process ––OEM level 100 development 81 Outlook 100 Approach to alternative fuels, electrification and fuel ––OEM Level 100 cells 82 SuRe by region 100 Special vehicle development 83 ––North America 101 ––Europe 101 Future Models 85 ––Asia 101 SuRe by company size 101 Interviews 88 Matt Smith, Director of Falken UK 89 SWOT Analysis and Production Locations 103 Alexander Kocher, President, Automotive Business SWOT Analysis 104 segment, Elektrobit 91 Global footprint 104 Supplier Relationship Survey 95 Global Vehicle and Component Sites 106 Introduction to the SuRe Index 96 Methodology 96 Forward Model Programmes 110 Executive summary 96 Forward Model Programmes 111 Performance review – Volkswagen Group 97 2014 SuRe survey results 97 Major Suppliers 127 ––Top of the ranking: Trust and future potential drive AUDI Q7 (2015) 128 harmony 97 AUDI TT (2014) 131 ––Middle of the ranking: OEMs push cost reduction 98 Porsche 911 Spyder 133 ––Bottom ranking: Cost overrules quality 98 Volkswagen Golf (2014) 135 Profit potential 99 Volkswagen Passat (2014) 138 ––OEM level 99 Volkswagen XL1 141 © 2015 IHS 3 2015 edition.