Volkswagen Boss: Move Faster, or Go the Way of a Second-rate Phone Maker

Steph Willems
by Steph Willems
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volkswagen boss move faster or go the way of a second rate phone maker

Nokia isn’t having a good day, what with Volkswagen CEO Herbert Diess likening it to an Edsel or Tucker. The VW chief contrasted the phone maker with sales leader Apple when discussing his company’s future, claiming VW will need to move much faster if it’s to stay at the front of the pack.

To further this goal, some things will need to move to the back burner.

As reported by Reuters, Diess laid out his plan to overhaul the automaker in the face of new challenges to top managers following a Thursday board meeting. Electrification, autonomous driving, and strict emissions standards all weigh on VW’s finances, forcing the automaker to choose which projects are most important in the near-term.

“If we continue at our current speed, it is going to be very tough,” said Diess of his goal of lifting VW’s market cap from $91 billion to $200 billion. “In summary this is probably the most difficult challenge Volkswagen has ever faced.”

Boosted productivity, reduced costs, and stable income — all the while leading the charge into electric and autonomous vehicles — is the near-future VW wants. To do it, some things will have to take a backseat.

Things like hydrogen fuel cell development, which no one believes will set the market on fire anytime soon. Things like VW’s MOIA ridesharing unit. Both hydrogen and mobility services will see their funding cut to free up cash for more important things, Diess said.

“We need to reduce our engagement and stretch it, until the prerequisites for better profitability are given,” he added.

As for real, actual cars, Diess says he wants the company to focus more on profit than volume.

“Take Bentley for example, 10,000 deliveries,” Diess said. “It would have been even more impressive if we had a margin higher than zero. If I’m totally honest, I would have preferred 5,000 deliveries and a margin of over 20 percent.”

Cost cutting and efficiency finding has become the main pastime of German automakers. Last year, VW entered into an alliance with Ford Motor Company while in search of synergies. In a bid to lower operating costs by $6.6 billion by 2023, the automaker announced the cull of up to 7,000 jobs.

At the same time, VW is readying an electric vehicle offensive. The first ID-badged model built on the automaker’s dedicated MEB architecture rolled out in Europe in late 2019, to be followed by a slew of models spanning the bodystyle gamut.

[Image: Volkswagen]

Steph Willems
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  • MoDo MoDo on Jan 17, 2020

    Or be stupid, invest all your eggs in one basket and go broke when people realize they don't want an electric car. Lets face it, all but Teslas have failed. Automakers have a right to be skeptical, ole dieselgate doesn't have a choice.

  • Schmitt trigger Schmitt trigger on Jan 18, 2020

    ***“We need to reduce our engagement and stretch it, until the prerequisites for better profitability are given,” he added.” WHAT THE HELL DOES THAT EVEN MEAN?**** This is a complex phrase, used by that obscure corporate-speak language. I'll give it my best shot at translation, although don't get upset at me if I fail to accurately translate it, OK? Translation: We'll follow GM's footsteps in debasing our products, praying that the ignorant car-buying public does not notice, and willingly pay Cadillac prices for a perked-up Chevy.

    • See 2 previous
    • WhatsMyNextCar WhatsMyNextCar on Jan 20, 2020

      @Michael S6 The early 80s, I'd guess.

  • Kjhkjlhkjhkljh kljhjkhjklhkjh Batteries work differently when not in a lab ... news at 11!
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  • ToolGuy "EVs tend to be less efficient at higher speeds on highways than commuting around town. It’s also important to note that where you live and how you drive can have an outsized impact on range, as people with lead feet or those living in colder climates may find a significant drop in range."• Let's not forget elevation changes!Signed, Captain Obvious 🙂
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  • ToolGuy Telluride killer