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On June 21, 2023, Volkswagen Group held its Capital Markets Day. The company discussed many things that range from leadership to brand strategies. Below is a summary of what was discussed.
On June 21, 2023, Volkswagen Group held its Capital Markets Day<ref>https://www.volkswagen-group.com/en/capital-markets-day-2023-17305</ref>. The company discussed many things that range from leadership to brand strategies. Below is a summary of what was discussed.


== Leadedership ==
== Leadedership ==
 
(From min 0:06)<ref>Refers to timestamp of webcast</ref>
* CEO Oliver Blume spent some time discussing new leadership principles focus on team spirit, enterpreneurship and customer orientation.
* CEO Oliver Blume spent some time discussing new leadership principles focus on team spirit, enterpreneurship and customer orientation.
* He noted that the new team is young. On average, board members have been in office for two years.
* He noted that the new team is young. On average, board members have been in office for two years.


== Group Financial Targets ==
== Group Financial Targets ==
 
(From 2:00)
* Volkswagen aims to grow its operating profit by 5-7% annually until 2027. Thereafter, growth rate will be in line with the industry standard.
* Volkswagen aims to grow its operating profit by 5-7% annually until 2027. Thereafter, growth rate will be in line with the industry standard.
* The group return on sales is forecasted to grow from 8.1% in 2022 to 7.5-8.5% in 2023, 8-10% until 2027 and then 9-11% from 2027 onwards until 2030.
* The group return on sales is forecasted to grow from 8.1% in 2022 to 7.5-8.5% in 2023, 8-10% until 2027 and then 9-11% from 2027 onwards until 2030.
Line 107: Line 107:


== Brands ==
== Brands ==
 
(From 1:22: 2:10)
* As part of strategic reallignment, the group assigned the responsibility of its targets to the brands. Therefore, each brand is coming up with its own performance program for the first time.
* As part of strategic reallignment, the group assigned the responsibility of its targets to the brands. Therefore, each brand is coming up with its own performance program for the first time.
* Sustainable value creation will be based on prioritization of value over volume.
* Sustainable value creation will be based on prioritization of value over volume.
* The reallignment will in future create new designations for Volkswagen brands which will include Core, Progressive, Sport Luxury and Trucks.
* The reallignment will in future create new designations for Volkswagen brands which will include Core, Progressive, Sport Luxury and Trucks.
=== Brand Group Core (SEAT, SKODA, CUPRA, Volkswagen Commercial vehicles) ===
=== Targets ===
* Aims to increase return on sales from 3.6% in 2022 to 6.5% by 2026 through cost initiatives, product positioning and structural synergies.
* That will see earnings improve by around 10 billion euros annually.
=== Current Strengths and Weaknesses ===
{| class="wikitable"
!Strengths
!Challenges
|-
|Leading market share in Europe and China
|High cost and asset intensity
|-
|Large fleet and global client base
|High competition in BEVs and SDV
|-
|Strong brand
|Limited brand differentiation
|}
=== Brand Group Progressive(Lamborgini, Audi and Bentley) ===
=== Performance Indicators ===
{| class="wikitable"
|+
!key Performance Indicator
!2022
!Mid-term
2027
!Strategic Target
2030
|-
|Sales Revenue
|€62 bn
|
|
|-
|Return on Sales
|12.3%
10.5% after special items
|~12%
|~14%
|-
|Cash Conversion Rate
|64%
|~75%
|~75%
|-
|BEV penetration
|~11%
|~40%
|~75%
|}
=== Current Strengths and Weaknesses ===
{| class="wikitable"
!Strengths
!Challenges
|-
|Strong performance track record
|Have not fully realized the potential of Audi
|-
|Leading share in target markets
|Re-balance regional presence
|}
=== Brand Group Sport Luxury(Porsche) ===
{| class="wikitable"
!key Performance Indicator
!2022
!Mid-term
!Strategic Target
|-
|Sales Revenue
|~€35bn
|
|
|-
|Return on Sales
|18.0%
|17-19%
|>20%
|-
|Cash Conversion Rate
|60%
|>60%
|
|-
|BEV penetration
|~11%
|>50%
|>80%
|}
=== Brand Group Trucks ===
=== Targets ===
* Return on sales target of 9% by 2030.
=== Current Strengths and Weaknesses ===
{| class="wikitable"
!Strengths
!Challenges
|-
|Strong brands
|Have not realized the potential of brand collaboration
|-
|Cover the largest regional profit pools
|Have not transition to sustainable transport
|-
|State-of-the-art technology and products
|Brand margins and cash flows have not improved
|}
== BEVS ==
* Have secured until 2030 up to 30% of all critical BEV raw materials(minute 0:45).
* Aims for up to 80 BEV launches until 2030(minute 1:11).


== Realigning Technology Platforms ==
== Realigning Technology Platforms ==
(From minute 0:38)


=== PowerCo ===
=== PowerCo ===
Line 120: Line 243:
* Volkswagen Group expects Unified Cell to power up to 80% of all BEVs in 2030.
* Volkswagen Group expects Unified Cell to power up to 80% of all BEVs in 2030.
* Once ramped-up, PowerCo is expected to achieve -30% capex per GWh versus state-of-the-art factory.
* Once ramped-up, PowerCo is expected to achieve -30% capex per GWh versus state-of-the-art factory.
* Sees PowerCo as a tangible option from 2027.
* Forecasts more than 450 GWh Volkswagen Group demand in 2030, approximately 50% will be provided by PowerCo.
==== PowerCo Strategic Targets ====
{| class="wikitable"
|+
!
!Strategic Target
|-
|Sales Revenue
|> € 20 bn
|-
|Operating Result
|>10%
|-
|Operating Profit Break-even
|2029
|-
|Cash flow Break-even
|2030
|}
==== Charging Points by 2025 ====
{| class="wikitable"
|+
!Region
!Number of Charging Points
|-
|Europe
|18,000
|-
|China
|17,000
|-
|North America
|8,000
|}
=== CARIAD ===
(From minute 0:49)
* CARIAD is being restructured to make it a lean internal software for all the brands.
* Some of the restructuring initiatives involve a change in management team.
* A lean CARIAD will facilitate the launch of the all-electric Porsche Macan and the Audi Q6 e-tron on the new premium platform E3 1.2.
* The next generation E³ 2.0 will be developed using a new structure that will involve collaboration of teams from CARIAD, VW and Audi.
==== CARIAD Status Quo Assessment ====
{| class="wikitable"
|+
!Strengths
!Challenges
|-
|Scale of Volkswagen Group
|Unattractiveness of its software features
|-
|Regional partnerships eg with Horizon Robotics
|Lack of in-time delivery at competitive costs
|-
|Its talent base is growing
|Lack of allignments of requirements across brands
|}
==== CARIAD Strategic Targets ====
{| class="wikitable"
!
!Strategic Target
|-
|Sales Revenue
|> € 4bn
|-
|Operating Result
|>10%
|-
|Operating Profit Break-even
|2027
|-
|Cash flow Break-even
|2028
|}
==== Path Towards One Architecture ====
{| class="wikitable"
|+
!Dimensions
!MEB
!2024+
PPE
!2025+
MEB+
!2026+
SSP
|-
|Main Segments
|A-B
|B-D
|AO-B
|AO-D
|-
|Engine Power, KW
|110-220
|140-700
|110-290
|120-1,300
|-
|Charging Time, min
|~35
|~21
|~20
|~12
|-
|ADAS
|Up to L2+
|L2++&More
|Up to L2++
|Up to L4
|-
|Margin Parity
|Some
|Selective
|Selective
|Most
|}
== Investments ==
(From 2:20)
* In the medium term and once combustion technology has been phased out, the company's investments will be reduced to around 11% by 2027 and 9% by 2030.
* Below is the breakdown of investments(€ 180 billion) between 2023 and 2027.
{| class="wikitable"
|+
!Area
!Investment
|-
|R&D
|9%
|-
|Competitiveness
|1%
|-
|Batteries
|1%
|-
|Strategic areas eg growth of North America
|1%
|}
== Equity Investment ==
(From 2:25)
* € 15 billion in book value.
* More than  €250 billion non-controlled book value.
== Dividend Target ==
* Aims to achieve dividend payout ratio of 30% (From 2:42)
== References ==
*
*
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