Is 9 the first day of the Frankfurt motor show, perhaps the Volkswagen Group’s most important meeting with the customers and critics for the next two years.
I am bound for a 45-minute meeting with its ceo, Matthias Müller, who have told me that it will be his only one-on-one interview in English. Why choose us? I assume because Autocar report things very thoroughly compared with glib newspapers and because our much-consulted the site gets you anywhere.
On our speaking calendar is Müller’s announcement the previous evening, the company’s business plan including the 2025, call roadmap, And self-described as “the most complete electrification initiative in the automotive industry”. And we are bound to touch Dieselgate.
The earth-shaking morning the headlines have popped up everywhere, and rightly so. The VW Group will launch 80 electric vehicles by 2025, they say, and are 300 electrified models on the market by 2030. The group has allocated an eye-watering £ 18 billion “for the industrialization of e-mobility” and will soon be seeking tenders for the £45bn worth of batteries estimate “transformation in our industry.”
Rounding off everything is a stirring quote from Müller: “We have received your message and we will deliver. This is not some vague statement of intent. It is a strong auto-commitment that, from today, becomes the yardstick by which to measure their performance.”
I’m waiting for this to be a formal interview to the German leaders usually prefer formality. These are serious issues and the top bosses usually have their dignity to protect. And then I wonder as we enter into the holy of holies of the meeting to find Müller, leaning casually against one of the walls of the corridor, chatting with colleagues.
He is an imposing figure with white hair, but young, without glasses, and tanned from what I assume must be different in recent weeks to break in the sunshine. It seems like it might be a sailor. He smiles, holds out a firm hand, uses my name, takes me easily in one of the rooms is courtesy of where the photographer suggests (not all) and in general behaves as if this meeting issues (again, not all).
After the beautiful tone of the roadmap And, it hardly seems appropriate to start nitpicking details, or to ask if you really meant, so I open the question to what extent this policy change is motivated by ‘Dieselgate’ or ‘the diesel scandal’, the two expressions are interested to see Müller has used with nor false emphasis or embarrassment in our first few minutes. “Our new roadmap is not only driven by diesel,” he says, tacitly acknowledging the right there, and it is, at least in part, the driving force.
“Back when [Martin] Winterkorn was running the company at the beginning of 2015, we started a great discussion about the future of the group, called ‘the Future of the Songs. In a first moment, there was not much content, beyond the fact that we need to go next. Then, in the autumn of 2015, we had Dieselgate and I was asked to take over.
“It became clear that the diesel scandal should be the incubator for our new strategy. We have worked hard on it, discuss what the future portfolio of products and, above all, which our engine combinations would be internal combustion, electric, plug-in, gas or what? Towards the end of last year, we have reached most of the conclusions for the roadmap And then put them into practice. What you see now is our commitment for the next 10-15 years”.
I’m impressed by how completely Volkswagen has embraced electrification – and to say – but Müller nor boasts about how his company came, or is to be regretted that the circumstances which have given his huge workload. All very well to commit to the electrification, I say, but what about the low economic interest of electric cars? If you agree to sell so many, and spend the majority of your capital on them, how will you ever make money?
“It’s easy,” Müller says that rather takes me aback. It is not very easy in the game of cars, in particular the fight against costs. But Müller says he knows beyond any doubt that the cost of batteries and other key components to fall dramatically in the coming years, in a conventional manner to parts of car not to do. “We expect to be able to take a big step forward to earn money,” he explains, “even if in the next generation of electric cars may not be as profitable as combustion models – that is the reason why we talk about having a good co-existence between the combustion and electrified models. We see a turning point between the two, five and seven years, which will help balance our revenue.”
Müller seems to be markedly less in such a way that customers will see this as a painless journey. “Combustion engines must provide the bridge,” he says. “To achieve the full electric cars take a lot of years and none of us know yet how many. The customer will decide that. But as long as the charging infrastructure is so poor, it will not happen quickly. All governments must take extra care.”
I’m curious to understand Müller’s why VW sales have remained so strong, because his customers still love the car, despite the diesel’s wrath. The CEO allows you to go fast, ironic, smile, and obviously so bullish sales contrast so completely with the company’s test of fire of the media. “It is the result of many things,” she says. “An interesting portfolio of products, the continued trust our customers place in our products, the ability of our employees. And it’s happening all over the world.”
What is the future of the VW Group, was the world’s largest-selling car company? It will be important in 2025? Others who have worn the crown – General Motors and Toyota, for two tend to argue that the quality of today’s deals is more important than the quantity. “To be number one no matter,” says Müller, “and it will import in 2025. We think we can achieve, too, but the task is to decide where to bring. In the sale of vehicles? In a number of models? In mobility services? We are working on them all.” In addition to all of the new model of speaking, Müller has introduced important strategies behind the scenes. One is to reduce the VW Group is a well-known reputation for authoritarian government, which is the leader of Müller to give greater independence to all of its brands.
“We have a complex group structure,” he says, “with 620,000 employees and 12 marks. It takes a great amount of management energy, effort and time to integrate things as we do. Perhaps there is another way to do it. I don’t have an answer today, but we’re working on.”
As always, our conversation is running. I’m desperate to represent the killer question that has hung over Müller from when he took the VW Group’s CEO the job: why on Warth would you do this? Why would you deliberately take responsibility for the wrongdoings of their predecessors? Müller was in his early sixties, when he accepted this gig from the safety of the top job at Porsche surely come to the mind of the foot, as other blameless, the high-profile VW officials had done? Again, the mocking smile.
“The motivation to help my employer,” begins the man born in East Germany, who went to school in Ingolstadt, and became an Audi apprentice, before going back to college and get into management. “I was in the VW for 44 years and have taken a lot from the group. When they asked if I could help in a difficult situation, I thought of these things when making my decision. I know that the group of strength and weakness, I told them, and I have an idea how to change it. I’m not sure that will work, but I’ll try.”
Müller, assistants, giving a look more frequently at their watches.
I find I have warmed to this man: he is much more candid than previous contact I had been waiting, and much more humble. The last time we met was in Los Angeles, where his work was to launch the Porsche Macan is the expectation of success – a concert almost guaranteed to encourage overconfidence.
Before leaving, I ask Müller to summarize the difficulty of the work. His answer is a surprise: “it was not so difficult at first, but it has become more difficult over time – because of diesel, the transformation of our business, digitization, connectivity, autonomous driving, shared mobility and all that stuff. Is equivalent to a very big challenge, for sure. But it’s also fun.”
The future diesel:
“We believe that it will continue to sell. First, they are clean. In the second place, we need them to meet reduction targets for CO2. Third, they are suited to a lot of customers. So we’re going to promote the diesel, although perhaps not for the smaller models. We need to invest in a new generation diesel, too, in 2019 or 2020.”
“My point of view is the first step is not to involve you and me. It will be for the taxi and parcel delivery in urban areas, where speeds are low and the driver is the most expensive part. Years later, when the systems are developed and the car can go faster, will go into the mass market.”
VW’s medium-term prospects:
“Our past success is based on our range of products and this is the answer for the future. We have a wide range of interesting products and our concepts to show the path for the next five years or so. I am convinced that it will be a success, if we do our duty.”
The impact of the sanctions on the VW finance:
“Not $20 billion for US to have an impact? Of course it does. I would like to have the money in your pocket for now, but I can’t. However, the VW is a very solid company and are able to finance all its new projects.”
Join the ‘good guys’ again:
“Things are moving, but not fast enough. We are not able to estimate when it will be over. There are problems of justice that continues, and that could take years to be resolved, perhaps as many as 10. It will be possible to win the confidence with issues of justice in the course? It is impossible to say.”
“I have no views on this, although I’m definitely a European. The British should do what they want.”
“I will retire in three years, after five years at the helm of the group. I hope by then we will have won the trust of our customers and the authorities, and that the group is well prepared for the next 10 years.”
“I want to leave things like that, my successor, there is no need to change everything, but to be able to proceed with the decisions that we’re making now.”
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