Away from computing costs, Blume also added the hardware such as batteries and e-motors of SSP will be a key differentiator between the many brands under the VW Group.
How else is the VW Group cutting costs?
Optimisation and efficiency have been key to the decision-making of the giant Volkswagen Group in recent years.
Blume said the VW Group as a whole had “too many options”, thus having a negative impact on production line efficiency and cost. Taking Audi as an example, he said the customer had a choice of “150 steering wheels, and we decided to continue with five. The customer at the end doesn’t care because the steering wheel is a steering wheel, and although we have many, many options, we have opportunities to reduce.”
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Not only does the VW Group have too much choice for customisation, but the product line also needs to be thinned out, according to Blume. Acknowledging the wide variety of markets and segments the VW Group competes in, Blume also added, “We are starting to focus our product portfolio. We need too many derivatives to achieve our volume.”
That volume is set to be limited in future too. Over the past five years the average production output for the VW Group has stood at nine million cars, ranging from 8.3 million to 9.3 million. Blume says the Group wants to “bring down the cost structure to nine million cars” to avoid the “overcapacity” he says the company still has to solve in its factories.
According to Blume, closer ties with China could also benefit the VW Group – which already has partnerships with battery manufacturers and electric motors in China as well as Chinese car makers like XPeng and SAIC. “We benefit from our experience in China, and we have our own component business in China, engine plants, and which we are transforming also to other components right now in China”, said Blume.
In the last three years, the VW Group has reduced its production cost level in China by up to 50 per cent and Blume says the company “can carry over as experience to Europe”. He also added: “there’s no excuse why we couldn’t be able to have the same cost level, like our Chinese competitors.” Blume concluded by stating “the customer, at the end, will benefit and therefore it’s a win-win situation for all of us.”
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