Procurement

Procurement’s main responsibility is to help steer the Company’s success in the areas of efficiency, sustainability, resilience and process quality of purchased parts. In 2025, intensive efforts by Group Procurement and our suppliers were once again necessary to address supply bottlenecks in the long term.

Procurement Strategy

The Volkswagen Group procurement organizations make an essential contribution to the Group strategy. A key task is to strengthen the procurement network and deepen collaboration across brands and regions. Making use of global synergies also creates potential for a long-term reduction in costs for raw materials, components and services.

The frequency, duration and intensity of crises and the associated supply chain disruptions have risen significantly since the beginning of the 2020s. As a consequence, the procurement organizations intend to work together with internal interface partners and suppliers to strengthen supply resilience. The establishment of concepts and tools as well as the provision of additional capacities for strategy and risk analyses are intended to facilitate the proactive and comprehensive monitoring of supply chains based on defined criteria, such as political influencing factors, economic developments or environmental risks.

The transformation of the automotive industry toward e-mobility also requires procurement organizations to adapt their supplier networks. The aim is for collaboration with these suppliers to be structured on an individual basis through strategic partnerships, treating the transformation as a joint undertaking. Expansion of partnerships is generally another area of focus in Procurement, both internally within the Group in the form of collaboration across brands and departments as well as externally with the Volkswagen Group’s suppliers. Digitalization and efficient processes are the foundation for all such strategic measures. In particular, the future use of a new digital supplier platform and the upcoming central data ecosystem, Catena-X, forms the foundation for data-driven value chains and is a core element of this area of action.

Digitalization of Supply

The supply chain of the future is connected, digital and transparent. This supports the safeguarding of supply, the leveraging of Group-wide synergies and creating transparency. We are therefore creating a shared database and using innovative technologies to enable efficient, networked collaboration in real time – both within the Group and with our partners. Within the Procurement division, the aim is for transactions with suppliers to be standardized in future and where possible, automated, thus not only reducing transaction costs but also accelerating business processes. In these efforts, an important element is the integration of Catena-X, the data network for the automotive industry. The goal is to identify possible supply risks at an earlier stage, and develop corresponding measures and alternatives faster as a joint effort. With Procurement’s digitalization strategy, we not only aim to strengthen Procurement’s IT system environment but also to increase the organization’s effectiveness, efficiency and future viability. The new IT landscape for procuring production and general materials will be rolled out throughout the Group until 2030 and has already been implemented at some brands.

Structure of Group Procurement

Volkswagen Group Procurement is responsible for ensuring cost-efficient, resilient, sustainable and high-quality supply chains. Procurement is organized at a global level, with a presence in the most important purchasing markets. Alongside local bodies and decision-making structures, Group Procurement manages the brands and regions. On the one hand, this helps us to jointly implement potential cost savings and, on the other hand, to control risks. Organized networking of the procurement organization across the brands will enable us to leverage Group-wide synergies and purchase production materials, investments in property, plant and equipment, and services worldwide in the quality required and on the best possible terms. In addition to the brands’ procurement units, Procurement operates regional offices in strategic purchasing markets.

Supply Chain Management in Procurement

We are focusing supply chain management activities in Procurement on safeguarding supplies during start-up phases and for series production. This involves providing support in our suppliers’ industrialization processes, monitoring series production and managing supply crises, which could occur, for instance, as a result of geopolitical crises or natural disasters. In 2024, the Volkswagen Group realigned its focus by introducing the strategic semiconductor management system. In doing so, the Volkswagen Group maintains direct business relationships with strategically relevant semiconductor manufacturers and directly influences the selection of components for the electronic architecture. The objective is to keep the Group’s product portfolio competitive in the long term and to safeguard supplies of core components at the semiconductor level.

Even in the early stages of new projects, we conduct audits to ensure that our suppliers will be able to deliver. Furthermore, we provide support for purchased parts for the individual project milestones up to the start of production. Complex components in particular frequently require on-site support from our supplier management team. In the final step, an acceptance test of production capacities is carried out to facilitate the timely commencement of series production of the vehicles at our plants.

In addition, regular checks are carried out during series production, for example, checks relating to the continuous matching of demand and capacity or possible capacity adjustments at suppliers. This also safeguards suppliers’ capacities when using existing components in new projects.

Thanks to our established crisis management structure and global supplier network, we are able to tackle complex challenges along the supply chain and utilize a wide range of locations and technologies. Cross-divisional work among Procurement, Quality Assurance, Development, Production and Logistics is carried out in order to largely reduce potential losses due to supply risks and to maintain production capability in cases where a reaction is required.