Volkswagen has formed a new management board that will oversee decisions on the group's core brands, saving about $1.2 billion in production alone. The company said on Wednesday that the new cross-brand steering model will oversee the Volkswagen, Skoda, Seat/Cupra and Volkswagen Commercial Vehicles brands to create a more competitive organization by streamlining processes and structures to improve efficiency.
“The focus is on management efficiency – and on speeding up processes to create more competitive products,” said Thomas Schaefer, CEO of the Volkswagen Passenger Cars brand and head of the Core Brands Group.
"The new governance model reduces costs and streamlines our structure while increasing our efficiency levels," he said.
As a result of this change, the number of members on the management boards of the four brands will be reduced by one-third by the time the reorganization is fully implemented this summer, with further management streamlining expected in the medium term.
The company said production, technical development and purchasing functions will now be managed at a cross-brand level by a management committee overseeing the brands.
On the production side alone, the restructuring of the guidance model is expected to unlock cumulative savings potential of 1 billion euros ($1.17 billion) by the end of 2030, the company added.
"The implementation of operational activities within the core brand group will be faster, while the focus at the group level will be on strategic synergy areas such as software and batteries," the company said.
Meanwhile, Volkswagen reported better-than-expected net cash flow and net liquidity at its automotive unit last year, citing lower working capital and lower-than-expected investment in capital spending and research and development.
The German automaker said its automotive business generated net cash flow of about 6 billion euros ($7.04 billion) in 2025, based on preliminary data, compared with 5 billion euros a year earlier. The metric was above expectations that the company's net cash flow would be about zero.
The company also said the automotive unit's net liquidity increased from 31 billion euros at the end of September to more than 34 billion euros at the end of the year, higher than the company's forecast of about 30 billion euros.
Volkswagen said its investment rate this year is about 12% of its automotive division's sales. The company is scheduled to announce its full-year 2025 results on March 10.