By Dominic Chopping and Mauro Orru

Volkswagen formed a new management board that will oversee decision-making across the group's core brands that could unlock around $1.2 billion in production savings alone.

The new cross-brand steering model, which will oversee the Volkswagen, Skoda, Seat/Cupra and VW commercial vehicle brands, will create a more competitive organization through the streamlining of processes and structures that will yield efficiencies, it said on Wednesday.

"The focus is on management efficiency--and on faster process speed for more competitive products," said Thomas Schaefer, chief executive of the Volkswagen passenger cars brand and head of the brand group core.

"The new governance reduces costs and structures--while at the same time increasing our efficiency level," he said.

As a result of the change, the number of board members within the four brands will be cut by a third by the time the reorganization is fully implemented this summer, with further management streamlining expected in the medium term.

The production, technical development and procurement functions will now be managed at a cross-brand level by the management board overseeing the brands, it said.

In production alone, the reorganization of the steering model is set to unlock cumulative savings potential of 1 billion euros ($1.17 billion) through 2030, it added.

"Implementation of operational activities within the brand group core will be faster, while the focus at group level will center on strategic synergy areas such as software and batteries," the company said.

Meanwhile, Volkswagen reported better-than-expected net cash flow and net liquidity in its automotive division for last year, citing lower working capital and lower-than-anticipated capital expenditure and research-and-development investments.

The German carmaker said its automotive business generated net cash flow of roughly 6 billion euros ($7.04 billion) in 2025, according to preliminary figures, compared with 5 billion euros a year earlier. The metric is above company expectations of around zero net cash flow.

The company also said net liquidity in the automotive division increased to more than 34 billion euros at the end of the year from 31 billion euros at the end of September, above company expectations of around 30 billion euros.

Volkswagen said its investment ratio for the year is at around 12% of sales in the automotive division. The company is scheduled to report its full set of 2025 results on March 10.

Write to Dominic Chopping at dominic.chopping@wsj.com and Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

January 21, 2026 13:41 ET (18:41 GMT)

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