Brand Group Core boosts operating result in first half – new Core Executive Committee strengthens cross-brand cooperation

The Brand Group Core (BGC), the organizational entity combining the volume brands of the Volkswagen Group, recorded an operating result of 3.61 billion euros in the first half of 2026, 4.5 percent more than in the corresponding prior-year period. Year-on-year, the operating margin improved slightly to 4.9 percent. In an environment that continued to be characterized by US import tariffs and growing competitive pressure, consistent cost control and reinforced cooperation had a positive impact on the half-year result. Nevertheless, geopolitical crises continue to have a negative impact on markets and supply chains. Regulatory requirements and barriers to trade are growing. In addition, there are far-reaching market upheavals throughout the world. The BGC intends to position itself even more efficiently and robustly and is aiming to achieve further cost savings and to reduce the complexity of processes, structures and products. For this reason, the newly created Core Executive Committee, comprising the CEOs of the volume brands (Thomas Schäfer/Volkswagen, Klaus Zellmer/Škoda, Markus Haupt/ SEAT&CUPRA, Stefan Mecha/VW Commercial Vehicles) and the heads of the BGC functions Finance (David Powels), Procurement (Karsten Schnake), Production (Christian Vollmer) and Technical Development (Kai Grünitz), started work at the beginning of July. This is connected with a changed management structure with clearly assigned competences and growing regional responsibility in the volume brand group of the Volkswagen Group. “The results of the first half show that our cooperation as a brand group is effective and is targeted towards joint success. This approach is increasingly bearing fruit. Nevertheless, geopolitical crises and far-reaching market upheavals continue to have an adverse impact on our business. With the new Core Executive Committee, we are therefore taking the next organizational step from July onwards: Clear responsibilities, slimmer management bodies and optimized cooperation in the fields of production, procurement and development. We know that the global challenges will continue to grow – we can therefore only be successful through consistent cooperation and leveraging synergies.” Thomas Schäfer, Member of the Group Board of Management, CEO Volkswagen Passenger Cars Brand “The financial picture for the first half of 2026 is mixed. Thanks to consistent work on costs, especially as a result of our performance programs, we were able to compensate for special items such as costs in connection with the discontinuation of ID.4 production in North America and to record a slight improvement in our operating result compared with the first half of 2025. However, the fact that the increase in sales revenue lagged behind the rise in unit sales shows just how challenging the economic environment is. The steady growth in competition and the new realities of the global economy are calling upon us to make our business model significantly more robust in order to be well-prepared for the future and sustainably successful. To achieve sustained improvement in our competitiveness by 2030, we must and will tap the significant additional potentials available in terms of cost, complexity and cooperation. Where we are steering together as a brand group, the efficiency improvements and scale effects are now becoming increasingly apparent.” David Powels, CFO Volkswagen Passenger Cars Brand & Brand Group Core Review of the first half of 2026 In the first half of 2026, the Brand Group Core recorded an improved operating result, demonstrating that the efficiency programs initiated within the volume brands are gaining traction. Nevertheless, the results achieved still lagged significantly behind the brand group’s own ambitions. With a rise of 8.2% in unit sales, Škoda achieved the most dynamic growth within the brand group. SEAT&CUPRA improved its operating result, continuing the turnaround of the previous quarter. Volkswagen Commercial Vehicles recorded a significantly higher operating result compared with the prior-year period, with a slight fall in unit sales. In North America, the market environment remains difficult. Sales promotion measures, mix effects and costs in connection with the discontinuation of ID.4 production in Chattanooga were the chief reasons why the operating result of the Volkswagen Passenger Cars brand was slightly below the figure for the first half of 2025. The Electric Urban Car Family is giving an especially positive signal. The small car family introduced only a few weeks ago has been very well received by customers. More than 70,000 orders have already been received for the attractive entry-level models of VW, Škoda and CUPRA, although only three of the four models planned, the CUPRA Raval, ID. Polo and Škoda Epiq, are available as yet. The operating margin of the Brand Group Core ran at 4.9%. Eliminating the special items mentioned above, the operating performance of the Brand Group Core was 5.9%. New quality of cooperation within the Brand Group Core from July The Brand Group Core is consistently continuing its strategy of efficiency improvement and closer cooperation. On the basis of a new cooperation agreement, the organizational linkage of key BGC functions is changing from July 1, with effects on the structures and processes of the participating volume brands Volkswagen Passenger Cars, Škoda, SEAT&CUPRA and Volkswagen Commercial Vehicles. The new board, the “Core Executive Committee” (CEC), which is comparable with a brand Board of Management at the Brand Group Core level, has now officially assumed its duties. The implementation of this new board is a key step in achieving a new quality of cooperation within the Brand Group Core. A cooperation agreement concluded jointly lays down binding transparency, information and liaison obligations between the brands and functions. This creates a seamless logic, with clear roles and responsibilities across all brands. In future, the yardstick for cooperation will be the overall optimum for the brand group together with a new culture of joint decision-making. At the same time, the brands Volkswagen Passenger Cars, Škoda, SEAT/CUPRA and Volkswagen Commercial Vehicles will remain autonomous as regards market responsibilities and brand identity. This new structure is a response to growing competitive pressure and the increasing financial pressure which the brand group faces. With its agreed strategy “Future Production Governance”, especially the production business area is giving a highly concrete demonstration of how the new steering model functions. The goal is a clear regionally oriented steering approach; in other words, responsibility will be pooled where it is most effective, i.e. in the regions of the world, near to the plants and near to business. In the first half of the year, key structures for this approach were created. The regional managements have been established and are assuming end-to-end responsibility for their production networks. At the same time, key steps were implemented within the organization: the Central Europe region was repositioned; comparable structures are also in place for the Iberian Peninsula and for Central Europe. The groundwork has now been laid: fewer interfaces, clearer responsibilities and significantly greater steering capability within the regions. Away from complex, separate structures for the brands towards an integrated, high-performance positioning. In addition, the reorientation of the steering model will provide a cumulative savings potential for the Brand Group Core of 1 billion euros up to 2030 in production alone. Article source: www.volkswagen-newsroom.com