Volkswagen Chickens Out, Says Strategy 2018 Is Old Hat, Declares Victory, Goes Home
In 2007, when Martin Winterkorn took over as CEO of Volkswagen, he said that Volkswagen wants to be better than Toyota, not just in units, but in profitability, innovation, customer satisfaction, everything. This morphed into the “Strategie 2018”, which called for world domination no later than what the name says. Today, Volkswagen changed its mind. Declaring an early victory, it wants to move on.
Volkswagen’s top managers already are working on some sort of a Strategie 2022, “as steady volume gains have already propelled the German group within reach of its current sales target for 2018,” says Reuters. Volkswagen’s labor chief Bernd Osterloh agrees: “We definitely need a new growth strategy.” Preferably one that does not include Toyota.World’s Largest AutomakersFull Year 2012 Data12M ’1212M ’11YoYToyota9,909,4407,858,09126.1%GM9,288,2779,023,5022.9%Volkswagen9,070,0008,160,00011.2%Source: Company data.Toyota: Production. GM: Sales. VW: Deliveries.
Readers of TTAC know ( ad nauseam, some will say) that Volkswagen ended the year 2012 with 9.07 million units delivered, putting in in rank three behind Toyota and GM. Didn’t they want to be the biggest? Now, the target miraculously morphed to 10 million units, a number Toyota missed by a hair last year. This year, the 10 million are in at least theoretical reach of all of the top three. Despite having been given (very long) odds by TTAC to break the 10 million barrier this year, Osterloh thinks it won’t happen, and we think he’s probably right. However, Osterloh says Volkswagen “must consider whether 2018 is still the appropriate standard.”
Interesting. Actually, 10 million never was the goal. The goal was, as related to me by a Volkswagen top executive who was in the meetings, to be better than Toyota, not just in units, but in profitability, innovation, customer satisfaction, everything, no later than 2018. In 2011, the goal looked near: Not Winterkorn, but a giant floodwave had stopped Toyota, half a year later, torrential rains in Thailand drowned Toyota again. Volkswagen wasn’t ready to exploit the situation, instead, GM became #1. Now, Toyota is back, and looking stronger than ever. Meanwhile, Volkswagen is faced with a little trouble at home. I don’t blame Volkswagen for ditching the plan. Actually, I always wondered why Volkswagen would “do what CYA-trained managers usually are loath to do: Set bold and measurable targets.”
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