IHS AUTOMOTIVE Supplying the Group SupplierBusiness

2015 edition supplierbusiness.com

SUPPLYING THE OEMS Volkswagen

Julian Buckley Principal Analyst IHS Automotive | Supplying the

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. 10 Supplier parks 54 ––2. 14 Cluster of reference 55 ––3. 17 Strategies for manufacturing efficiency 55 ––4. 19 ––5. 20 Purchasing Strategy 56 ––6. 23 Purchasing strategy overview 57 ––7. Škoda Octavia 24 Levels of vertical integration and outsourcing 57 ––8. A4 26 Purchasing organisation 58 ––9. 28 Purchasing offices 59 ––10. 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 –– 47 Quality management systems 74 –– 47 Supplier integration into product development 75 –– 48 Management of suppliers and sub-suppliers 76 –– 49 Supplier awards 76 ––Czech Republic 49 ––Spain and Portugal 50

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© 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 –– 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 98 911 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