Production risk

The weakness in the European automotive market also had a noticeable effect on production at the Volkswagen Group in 2013. Changes in the demand environment, partly due to weak domestic markets, caused production volumes of several vehicle models to fluctuate at some plants. We have various tools at our disposal with which to smooth out these market-driven fluctuations, such as flexible working time models and dynamic capacity utilization at our sites. “Turntable concepts” are used to keep capacity utilization at our production sites at a consistently high level. In addition, we are better able to smooth out fluctuations in demand at multi-brand sites, the number of which is growing in the Group.

Short-term changes in demand for special equipment features or components of our products and the decreasing predictability of those changes may lead to supply bottlenecks. We minimize this risk, among other things, using a revolving process that examines the feasibility of different future demand scenarios for vehicle features. If there are signs of bottlenecks in the supply of materials, countermeasures can be introduced with sufficient lead time.

Regular preventative maintenance measures ensure that plant availability is high and that output at our production facilities remains stable.

We select new sites for vehicle or drivetrain plants by means of a transparent process that is consistent for all Group brands. In addition to economic, geological and technical factors, environmental factors, environmental laws and compliance requirements are assessed and considered in detail in the course of this process.

Risks arising from long-term production

In the case of large projects, risks may arise that are often only identified in the course of the project. These may result in particular from contracting deficiencies, miscosting, post-contract changes in economic and technical conditions, weaknesses in project management and poor performance by subcontractors. We use an enhanced project control process that covers all project phases and a lessons learned process to endeavor to identify such risks at an even earlier stage and to take appropriate measures to eliminate or minimize them before they occur.