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The VW brand looks for its own personality

Automotive News

Herbert Diess presents the company’s strategic plan until 2025.

Herbert Diess, the president of the Volkswagen brand for two years, wants to put it in value, leave the dieselgate behind and recover an identity that, in the last decades, has been diluted by the consortium of the same name. For this reason, Diess wanted to insist that Volkswagen is its central pillar of the same and that innumerable contributions of all kinds, from R & D to industrial, which makes the rest of brands that form.

From BMW AG – where he was a member of the board of directors, first responsible for production and then for R & D – Diess had to cope with the diesel emissions scandal within a few months of arriving, and took advantage of the need to To react to achieve what seemed to be logical: to regain a level of autonomy with respect to the direction of the group that other brands have. It is curious how when the financial results are presented, all the brands present theirs, except those of Volkswagen that are diluted in those of the group.

This has led to a complete overhaul of accounting – which sometimes distorted the actual outcome of the brand – and set in motion an eight-year plan called Transformation 2025+. It aims to become world leaders, including all technologies, and in electric vehicles.

Diess valued the year 2016 – they produced 6.07 million vehicles and sold 5.90 million – as the beginning of the change, although solving the problem of diesel absorbed much of the time and resources. Right now, in Europe only 57% of the affected cars have been repaired (75% in Germany) but they maintain the objective of reaching 100% at the end of the year. And only 1% of users are unhappy with the repair.

But in 2016 new strategies were also put in place. For example, a labor agreement was negotiated with the German trade unions that will improve the productivity of German plants by 25% by 2020, which will be able to accept a greater workload. Thus, Wolfsburg will produce from 2018 the new big small part of Seat, and Emden, who makes the Passat and begins with the Arteon, will receive another model still in development.

As for the product, VW continues to introduce new models todocamino, those of greater demand. Atlas / Teramont, for the US and China, and the Tiguan Allspace are already reaching the dealerships to meet global demand. This year will also be the new Touareg, the T-Roc and in 2018, the all-new version of the new Polo. Although this is only the beginning as the ranges will be renewed in almost all regions. Notably in China, where in 2018 will be introduced nine novelties, including three todocaminos.

All this is based on a positive economy. In the first quarter, they had an operating profit of 869 million compared to about 100 a year ago, an approximate figure given the accounting changes. And if the margin on billing was 1.8%, this year – with 10% more revenue – expect it to be between 2.5% and 3.5%. Then they would reach 4% in 2020, a difficult target but they hope to achieve thanks to the agreement with the unions and the improvement of the results in the three loss regions: North America, Mercosur and Russia. In the rest they are profitable, “even very profitable, as in China.” In 2025, the target is a profitability of 6%.

In North America they hope to achieve balance and leave behind losses in 2020. For now, their sales grow by 3.8%. In Latin America they do 12.9% and after adjusting the template and introducing a variant of the MQB platform that Reduce costs, must make money again. In Russia, the market starts a recovery and Volkswagen has risen 13% in the first quarter, although the figures are low. In addition, the ruble is recovering and has a positive impact on the result.

EXPANSION – BY SERGIO PICCIONE – Wolfsburg – 05/08/2017

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