Research and development risks

The most significant risks from the regular GRC process and QRP result from the failure to develop products in line with demand and regulations, especially in view of e-mobility and digitalization.

Research and development risks

The automotive industry is undergoing a radical transformation process. Multinational corporations like Volkswagen are facing major challenges in the areas of customer/market, technological advances and legislation. Key aspects are the implementation of increasingly stringent emission and fuel consumption regulations, taking new test procedures and test cycles (e.g. WLTP) into account, as well as compliance with approval processes (homologation), which are becoming increasingly more complex and time-consuming and may vary by country. On a national and international level there are numerous legal requirements regarding the use, handling and storage of substances and mixtures (including restrictions concerning chemicals, heavy metals, biocides, persistent organic pollutants), which apply to both the manufacturing of automobiles and the automobile itself.

The economic success and competitiveness of the Volkswagen Group depend on how successful we are in promptly tailoring our portfolio of products and services to changing conditions. Given the intensity of competition and the speed of technological development, for example in the fields of digitalization and automated driving, it is crucial to identify relevant trends at an early stage and respond accordingly.

Among other things, we therefore conduct trend analyses and customer surveys and examine the relevance of the results for our customers. We counter the risk that it may not be possible to develop modules, vehicles, or services – especially in relation to e-mobility and digitalization – within the specified timeframe, to the required quality standards, or in line with cost specifications, by continuously and systematically monitoring the progress of all projects. To avoid patent infringements, we intensively analyze third-party industrial property rights, increasingly in relation to communication technologies. We regularly compare the results of all the analyses with the respective project’s targets; in the event of variances, we introduce appropriate countermeasures in good time. Our end-to-end project organization supports cooperation among all areas involved in the process, ensuring that specific requirements are incorporated into the development process as early as possible and that their implementation is planned in good time.

Risks and opportunities from the modular toolkit strategy

We are continuously expanding our modular toolkits, focusing on future customer requirements, legal requirements and infrastructural requirements.

Higher volumes will, however, increase the risk that quality problems will affect an increasing number of vehicles.

The Modular Transverse Toolkit (MQB) has created an extremely flexible vehicle architecture that permits dimensions determined by the concept – such as the wheelbase, track width, wheel size and seat position – to be harmonized throughout the Group and utilized flexibly. Other dimensions, for example the distance between the pedals and the middle of the front wheels, are always the same, ensuring a uniform system in the front of the car. Based on the synergy effects thereby achieved, we are able to cut both development costs and the necessary one-time expenses as well as manufacturing times. The toolkits also allow us to produce different models from different brands in various quantities, using the same equipment in a single plant. This means that our capacities can be used with greater flexibility throughout the entire Group, enabling us to achieve efficiency gains.

We transferred this principle of standardization with maximum flexibility to the Modular Electric Drive Toolkit (MEB), a concept developed for all-electric drives. The synergy effects and efficiency gains achieved from the modular toolkit strategy will give us the opportunity to bring e-mobility into mass production worldwide with the introduction of the first MEB-based vehicle.