VW purchasing director Aksel wants closer cooperation with suppliers
“And we’ve called on suppliers to bring their ideas. Now we’re moving into individual trades, where we’ll be talking to suppliers about what they can contribute.”
Aksel said procurement will also play a vital role in the process of revolutionizing production practices at the new Wolfsburg plant where the Trinity project will be built.
“Take the idea of using big body mods, which is currently in testing. Where do these mods come from? From the vendor,” he said. “That’s where we come in. That’s why we already work very closely with development.”
Aksel said normally, this process starts about three years before the start of series production, but with the Trinity project, VW starts five years in advance.
He said the Trinity factory’s goal is to design, build and operate an assembly facility that is on par with, if not more efficient than, what Tesla has achieved with its gigafactories.
“If a company that has only been building cars for ten years can build a state-of-the-art, efficient factory in Germany just two hours from us, then we, as a car manufacturer with many decades of experience, are probably going to be able to do the same,” he said. “I’m convinced of it. Even though a lot of people say the group is too slow and too complex, once the tanker’s course is set, you can see the power behind it.”
Aksel has said in the past that an incredible amount of energy has been spent on further reducing the costs of the current series, something he would like to refocus more on starting to work with suppliers, so that they don’t don’t have to invest a lot of effort in other negotiations later.
“Our goal is to get it right once at the start and then we can count on it from both sides,” he said. “We call this the ‘best price at the start of production’ strategy. There are tough negotiations until you are a supplier with us. But once you are one, we are reliable partners and sustainable.”
He explained that this strategy started in 2021 and would be implemented for the first time in projects starting in 2023. The first VW-branded project where VW is applying this strategy is the new Tiguan.
All of these changes are on the way as Aksel is expected to reduce material costs by 7% by the end of 2022, despite exploding raw material prices.
“It’s just pure raw costs. Inflation and commodity prices work against that, of course,” he explained. “We can’t make up for that, and that’s never been the expectation. Nobody can manage seven percent net.”
He added that the group had agreed with some of its suppliers to surcharges on material costs, and “of course” the group paid for them. “Anything else would be irresponsible,” he said. “Nevertheless, we also managed to achieve net savings.”
He said that for the transition period of 2021 and 2022, during which the old contracts still apply, the group wants to exploit the potential that it has not exploited in the past. In precise figures, this represents 7%, 3.5% per year.
“It’s a level we’ve already reached in previous years,” Aksel said. “From 2023, we will have competitive prices from the start.”