VW places electromobility, connectivity at the center of its future strategy
The realignment will take place in three phases. In phase 1, up to the year 2020, Volkswagen plans to thoroughly restructure its core business with particular focus on the processes along the value chain. In this context, the company also will acquire new competencies. Though Diess did not elaborate, it is generally believed that these competencies will include web-based business models such as car sharing and the digitization of the sales process.
In the second phase, from 2020 through 2025, Volkswagen plans to capture the pole position in the electromobility market – a rather ambitious goal, given the company’s current position in the world of electric vehicles and the lackluster demand for its e-cars in Europe, in particular in Germany. However, the plans of China as one of Volkswagen’s largest markets to introduce a binding quota for electric vehicles could help Volkswagen to reach this goal because it would foster scalable mass production. “We intend to play a key role in the breakthrough of the electric car”, Diess said. “We are not aiming for niche products but for the heart of the automobile market,” adding that VW plans to sell 1 million electric vehicles per year.
In phase 2 the strategy also calls for additional revenue streams through novel mobility services. Again, the objective in this segment is ambitious: Volkswagen plans to achieve a leading role in the world of innovative mobility models by 2030, Diess said.
Digitization will be another battlefield where VW intends to play a major role. According to Diess, the company will develop its own digital platform to offer a comprehensive range of services and to reinforce customer loyalty. Again, Diess is aiming at nothing less than the “leading digital ecosystem in the entire automotive industry”, with more than 80 million active users worldwide. From this business alone, Diess expects a revenue stream of 1 billion euros per year.
Also for North America Volkswagen has high-rising ambitions. In this region, Diess plans to grow from a niche player to a relevant and profitable volume manufacturer. The strategy to leave the niche is offering large sedans and SUVs – with conventional powerplants in the first phase, and with electric drives in the second one. Diess announced “significant investments” in the electromobility infrastructure. From 2021 onwards, Volkswagen also will manufacture vehicles based on the company’s Modular Electromobility Drive (MEB) platform locally.
The Dieselgate affair brought to light (among other things) that Volkswagen, with more than 600.000 employees worldwide a rather large entity, suffers from complex, sometimes chaotic decision-making structures and a lack of agility as well as a command-oriented corporate culture. Diess addressed this topic by announcing a comprehensive organizational reform which will aim at increasing agility and strengthen entrepreneurial spirit while at the same time fostering a more transparent discussion culture. Some days earlier, Diess already announced to cut some 30.000 jobs, with most of them (23.000) taking place in Germany.
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