Berlin Thomas Schäfer makes a promise: Under his leadership, the volume group in the Volkswagen Group should finally function. “It’s going to be something,” said the CEO of the core brand VW passenger cars in Berlin in front of journalists. After many attempts, the group of brands VW, Skoda, Seat and VW Commercial Vehicles will finally come together and jointly ensure lower costs and greater efficiency. At the same time, Schäfer wants to accelerate the expansion of electromobility again.
In recent years there have been repeated attempts at the Wolfsburg car company to get the various volume brands to work more closely together. But the individual brands were jealously careful not to let the group’s internal competitors get too close.
The conflict between the core brand VW and the subsidiary Skoda is legendary. The Wolfsburg displeased the sales success of the Czech brand, Skoda should be stopped.
Thomas Schäfer also admitted in Berlin that the attempts at real cooperation in the volume group often enough over the past few years have not worked properly.
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“In the past it was more of a hook than a hook. That’s finally over now,” emphasized the new VW brand boss, who took up his post in July and since then has also headed the volume group in a personal union. There is “huge efficiency potential” in the brand group that must finally be exploited and that could give the entire group a significant competitive advantage.
The weaker return on sales compared to the competition, especially for the core brand Volkswagen, has been a thorn in the side of analysts and investors for some time. “Volkswagen is only valued at two to three times its earnings on the stock market,” says Philippe Houchois, an automotive analyst at investment house Jefferies. The Wolfsburg group should achieve at least twice that. That is the industry standard.
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Houchois mainly blames the core brand for the comparatively poor rating. The Wolfsburg manufacturer earns too little money and is dragging the entire group down.
In the first half of 2022, the Volkswagen brand accounted for around 30 percent of vehicle sales in the Group. But the Wolfsburg-based company only contributed about 15 percent of the operating result at group level.
Thomas Schäfer sees “huge potential for efficiency”.
(Photo: dpa)
For Thomas Schäfer, the closer cooperation in the volume group is the decisive response to criticism from the financial markets. In the future, the individual volume brands would work together more closely in production, for example. As a consequence, this means that there will be more multi-brand factories in the future. It is a wrong approach and not very efficient if a single brand only ever wants to produce its cars in its own factories.
Joint vehicle development
As VW brand boss and CEO of the brand group, Schäfer wants to avoid duplication of work. In this way, a single brand can take on a development order for the entire group.
He cited the “Beta Plus” project as an example: Skoda had developed the new VW Passat and the new Skoda Superb uniformly for both brands. Seat in Spain is now responsible for starting the production of an entry-level electric car for three group brands in three years for less than 25,000 euros. The e-model in the format of a VW Polo is also produced by Seat for all three brands at Seat’s main plant in Martorell, Spain.
Brand boss Schäfer said that the closer cooperation between the volume brands is already showing initial successes. In this year alone, a savings volume of 220 million euros has already been identified and actually implemented. The monthly meetings of the four CEOs of the volume brands also contribute to this.
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As a medium to long-term goal, Schäfer wants to achieve increases in efficiency of 20 percent in the synergy fields of production, purchasing and development within the group. The new brand boss is aiming for a return on sales of eight percent for the volume group. For comparison: Next year, the core Volkswagen brand is expected to achieve a return of six percent.
At the same time, Schäfer announced more speed in the electrification of the vehicle fleet. From 2033 onwards, Volkswagen will probably only produce and sell purely battery-powered electric cars in Europe. So far, there has been talk in Wolfsburg that the VW brand will exit the combustion engine business in Europe between 2033 and 2035.
In the USA and China, however, the change will take a few years longer. Volkswagen intends to launch ten new electric models by 2026.
With the switch from petrol to electric cars, Volkswagen can no longer afford to occupy every product niche twice with combustion and electric variants, if only for cost reasons. Schäfer therefore announced a streamlining of the model portfolio: “We will do less, but then do it properly.”
End for niche models
So VW will probably soon no longer produce a niche model like the Arteon. Instead, the Wolfsburg-based company is concentrating on the core model Passat, which is not particularly different from the Arteon.
Concentrating on the most important models will also have consequences for drives. Schäfer indicated that in a few months there would be no more models with natural gas engines from Volkswagen. The triggers are the disappointing sales figures for natural gas vehicles from VW’s point of view, which have not improved at all in recent years.
Schäfer also wants to ensure that VW models are of better quality and higher quality again. In recent years, Volkswagen has often had to listen to criticism for the poor quality of the Golf and the ID.3 electric model.
The former CEO Herbert Diess had pushed through an austerity course – with correspondingly negative consequences for the quality of the most important vehicles. According to Schäfer, individual projects can also be delayed so that the product substance and quality are right. Volkswagen has to meet customer expectations again.
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