German legacy automaker Volkswagen Group announced plans to give its semiconductor supply chain the utmost attention to achieve technological advancement.
The newly developed strategy would enable the company to improve its electric vehicle portfolio and determine crucial information about each component it uses. In effect, it can effectively develop plans to secure sufficient long-term supply.
Strategy details
Volkswagen aims to change its approach to acquiring its electronic components and semiconductor chips to solidify its supply chain.
For starters, the German automaker will establish a “high degree of transparency” with Tier 1 suppliers.
“A high degree of transparency in the semiconductor value chain – the exact knowledge of the parts used – enables us to better determine the global demand and availability of these components.”
Dirk Große-Loheide, VW Board Member for Procurement & Group management member
That said, VW will closely engage in identifying the ideal electronic components and semiconductors for its electric vehicle models. In addition, it will also directly acquire semiconductors from manufacturers.
“Furthermore, the transparency regarding semiconductors means that technical alternatives can be identified and implemented more quickly in the event of bottlenecks. Another positive effect is that a reduction in the diversity of variants in the hardware results in a lower degree of software complexity.”
Karsten Schnake, VW Board Member of Procurement at Škoda Auto & COMPASS Head
See Also:
- Volkswagen begins ID.7 EV production at its Emden factory
- Volkswagen snatches top-selling title from Tesla in Germany from Jan’23 – Jul’23
- Volkswagen enters electricity trading in Europe with its energy subsidiary
- Volkswagen announces plans to invest €1B in South America by 2026
- Volkswagen BEV sales hit 70,000 globally in Q1 2023
VW’s enhanced strategy for securing electronic parts and semiconductors is crucial for its automotive business’ future. Considering the growing number of EVs globally, seeing another shortage of such components would be unsurprising. That said, automakers must develop and implement aggressive strategies to strengthen their supply chain.
