VW Hopes to Lower Costs by Avoiding Over-Engineered Parts

Volkswagen Group’s VW brand intends to shrink product development costs by shunning last-minute engineering changes and looking for ways to use existing parts rather than designing new ones.

Sources tell Bloomberg News the plan is part of a 12-part strategy presented by VW brand chief Herbert Diess to top management last week.

VW hired Diess, formerly BMW AG’s product development chief, in December 2014 to improve VW’s skimpy profit margins by cutting costs and streamlining operations. Over the past three months he also has been dismantling the unit’s autocratic operating style that included costly last-minute design tweaks ordered by former Chairman Ferdinand Piech and President Martin Winterkorn.