New VW boss outlines master plan

After more than 100 days as Volkswagen Group CEO, Oliver Blume has outlined a 10-point plan to ensure profitability as it tries to bounce back from the infamous diesel emissions cheating scandal and quickly transitions to electric mobility.

“The direction is right. We will begin implementation in 2023,” Blume told investors.

“Our ambition is to retain a leading market role in the world of e-mobility with first-class products and services – with convincing design, technology and user experience.

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“We continue to work on a balanced global presence – in Europe and China and with a strong third pillar in North America.”

Blume replaced Herbert Diess in September 2022, who oversaw the shift into electric vehicles, launch of the Modular Electric Toolkit (MEB) electric platform, and introduction of much-criticised new infotainment software and controls.

The master plan focuses on the group’s car brands, such as Volkswagen, Skoda, Cupra, Audi, Porsche and Bentley as follows.

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Planning round

Aims to improve capital use and cash flow.

Financial robustness is top priority, so the group will lower the break-even point (where the total costs and revenue are equal) even further.

Products

Refining product strategy, while developing clear design languages between each brand.

Volkswagen will also examine “how it can take icons such as the Golf or Tiguan into the electric future”, while the group will be “repositioning the design and quality divisions” with the help of Audi and Porsche.

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Volkswagen ID.4

China

The Volkswagen Group wants to double deliveries of electric cars in 2023.

It will also strengthen its technical development in China and develop autonomous driving technologies in partnership with Horizon Robotics.

North America

With production of the Volkswagen ID.4 medium electric SUV now up and running at its Chattanooga factory in Tennessee, the German automaker will consider expanding capacity and localising its supply chain in North America.

This allows it to “diversify our business further in light of geopolitical developments” and offer the rugged all-electric Scout pickup truck and SUV.

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Volkwagen ID.4 1st

Cariad

Volkswagen Group subsidiary Cariad will move forward with its development of in-car software technologies, safety assistance systems and autonomous driving, while looking at areas for third-party alliances.

Software will continue improving in “current volume models” with electric driving ranges of up to 700 kilometres and up to 200kW DC fast charging capability. The former has already been confirmed in the Volkswagen ID.7 sedan and wagon preview.

In 2024, it will roll out “high-performance software for our premium brands” with the long-term goal for a unified software platform for the group as per the Scalable Systems Platform (SSP) expected to debut in 2026.

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Volkswagen ID.7

SSP

The German giant has agreed on the timeline for vehicle projects “in the coming years” based on the new software roadmap.

It has defined “technology profiles” for SSP, which will roll out to all brands by 2030.

Each car brand has also been allocated “power ranges” responsibilities to avoid overlap.

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Battery, charging and energy

The Volkswagen Group has decided three of the six planned battery production factories in its roadmap.

A final decision on a plant in Eastern Europe will follow and will soon investigate sites in Canada. It has already signed a memorandum of understanding on raw material security with the latter government in late 2022.

The German giant has also launched its joint venture with green energy company Enel in Italy to achieve its goal of installing 45,000 fast charging points globally by 2025.

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Mobility solutions

It has signed off a plan to introduce a mobility app in 2024 and will apply to all group brands, which will cover services such as car financing, leasing, rental and subscription models.

The mobility platform is being built with rental car company Europcar.

Meanwhile, it is reviewing the business model for mobility-as-a-service schemes after stepping out of backing autonomous driving rideshare startup Argo AI. For private self-driving mobility, Audi and Porsche will continue developments.

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Sustainability

The Volkswagen Group is currently redesigning its sustainability strategy with “ambitious” environmental, social, and governance (ESG) goals.

Each brand and division will have its own ESG goals with individual responsibilities.

Capital market

It will develop “virtual equity stories for our brands and value drivers in the Group” to visualise the strengths and enhance long-term value.

The first results will be presented to investors in the second quarter of 2024.