Procurement risks and opportunities
Although European demand for vehicles steadied in the reporting period, there are still considerable economic differences in the regional markets. These are affecting our suppliers, especially those focused on Southern and Western Europe. In 2013, this situation once again contributed to a cautious stance on the part of investors. As a result, greater consideration was given to suppliers’ financing options when making lending decisions. The Volkswagen Group’s procurement risk management system is well prepared for the current environment: changes at the suppliers’ end are continuously monitored and a suite of different measures deployed in the event of any negative developments. This allows us to minimize supply risks and the financial effects of crises and insolvencies at suppliers.
The modular structure of our toolkits make them the ideal starting point for requests for bundled volumes of vehicle parts and for synchronized order and procurement processes. We will systematically enhance this strategy with the Modular Transverse Toolkit in the A0 vehicle class and combine worldwide volumes into a single request. In doing so, we consider both market requirements and conditions at the location, with the objective of a globally harmonized supplier strategy. This process creates the conditions for us to exploit regional and transregional synergies. Furthermore, start-up risks in the Volkswagen Group are minimized, one-time expenses are optimized and the security of planning and supplies are ensured at a global level.