Volkswagen focuses on regions to reduce supply chain vulnerability

BERLIN, April 19 (Reuters) – Volkswagen (VOWG_p.DE) said on Tuesday that a new growth plan would aim to reduce its vulnerability to the effects of global conflicts, such as supply chain disruption and rising prices, by divesting more power to its regions and brands.

“The latest geopolitical changes and increased block-building have been exposing our global vulnerability, particularly with regards to the U.S.,” Volkswagen Chief Executive Herbert Diess said in a LinkedIn post.

This has raised concerns over how the automaking industry would cope if escalating tensions with China also led to economic measures. read more

Volkswagen warned last week that it was feeling the impact of rising prices and supply chain bottlenecks, with deliveries in March down 37.3% from last year.

Mercedes-Benz (MBGn.DE) Chief Technology Officer Markus Schaefer said last week that the German carmaker was also tightening its supply chains in light of global bottlenecks.

China accounts for around 40% of Volkswagen’s sales but the carmaker is far behind local competitors in the electric vehicle market, just missing its target of selling 80,000 to 100,000 electric cars in the country last year. read more

Volkswagen will release more details in coming weeks on exactly how responsibilities will be divided up, Diess said.

“Our competitors are no longer called Mercedes-Benz, Toyota Motor Corporation or Stellantis, but Tesla, Foxconn, Apple, LG Electronics, Uber etc,” Diess said.

Diess first announced a reshuffling of responsibilities at Volkswagen last December, after weeks of clashes between the CEO and labour unions over his leadership. read more

Reporting by Victoria Waldersee; Editing by Alexander Smith