inside
The employee magazine
of the Volkswagen brand

Company

‘I enjoy the open dialogue with employees’

Eight a.m – the day is young. inside interviews Herbert Diess. The brand CEO speaks about the product campaign and the Pact for the Future, sites and competitors – and reveals why he eats in the canteen and doesn’t always wear a tie.

Brand CEO Herbert Diess says: “The brand has wonderful products, a good team and strategy.”

Mr. Diess, which car did you drive to work today?
I came in my e-Golf. A wonderful, agile car that proves how electric mobility can evoke as much passion as driving cars with diesel or petrol engines. It is at least just as much fun, particularly now that the ranges are getting bigger and bigger. Our e-Golf already manages 300 kilometers. And by 2020–21, we’ll have made another great leap forward.

The Volkswagen brand has launched the largest product campaign ever in its history and is currently focused primarily on SUVs such as the Tiguan or the Atlas. Why?
This vehicle concept is in demand with customers all over the world. Customers especially want to sit higher up and they enjoy the feeling of space. You see this in the popularity of our Tiguan, which has been a huge success all over the world –  not least in China, our biggest market. This has inspired us to release even more SUVs onto the market. More compact and more spacious versions will supplement the Tiguan over the next few years.

» Survival of the brand depends on the Pact for the Future. «

Interview in the presentation hall of the Brand Tower in Wolfsburg: Herbert Diess with Nina Böttger, Director of Internal Communications, and inside editor Marc Rotermund.

A total of 2.9 million vehicles sold, €39.9 billion in sales revenue, and an operating result of €1.8 billion – key figures from the half-yearly financial statement. Are you pleased?

All in all, I am. In comparison to last year, we have made significant improvements in many markets and segments. However, there are still markets in which we are struggling. One example is Brazil. I’m generally optimistic about the second half of the year. The Arteon has gotten off to a good start, and we are introducing lots of other new products as well. The Polo and the T-Roc, an SUV in the same size class as the Golf, are set to launch. In the United States, the Atlas and Tiguan SUVs will contribute to growth, and we’re also launching new products onto the Chinese market. We should see more improvements in 2018, depending as always, however, on the economic situation remaining stable in individual markets. We will be offering an even more attractive range of products in 2018 and we will be making further progress in reducing costs.

Looking at the figures: Do we still need the Pact for the Future?
We certainly do, because we still aren’t as good as the competition. I will say it loud and clear: We need considerably higher
returns in order to earn the money needed for our investments in the future. We will be investing €3.5 billion in electric mobility over the next few years, for example. Furthermore, we need to implement a significantly better vehicle-based Internet connection. Autonomous driving will also place demands on us, and huge outlays will be necessary to reduce emissions. Our greatest challenge will be achieving the fleet targets in 2020. We need to recognize that the survival of the Volkswagen brand depends on the Pact for the Future.

The Pact for the Future also states that the plants are to increase productivity rates by 7.5 percent this year over last year’s level. How much progress has been made now that we’re half way through?
We got off to a better start than we had expected, and a number of sites will even surpass their targets. Components in particular is doing very well. They are resolute about shedding production processes that exhibit little or no sustainability and are focusing their attention on new technologies, and electric mobility in particular. The vehicle production sites are still committed to achieving their production targets. That is important because we have competitors that are more productive than we are. Toyota and Hyundai, for example, make more vehicles with fewer employees. We at Volkswagen still have potential when it comes to efficiency and we want to realize this potential by means of the Pact for the Future.

HERBERT DIESS

has been chairman of the ­Volkswagen brand and member of the Group Board since July 2015. Earlier, he worked at BMW for 19 years as head of BMW Motorcycles, board member for the Purchasing Portfolio, and more recently Development. Diess was born in Munich and is 58 years old.     

» Volkswagen might be the brand with the greatest potential worldwide. «

Who are our competitors?
In the old world, it’s Toyota, Hyundai, and the French manufacturers. In the new world, it’s Tesla. We need to acknowledge that Tesla is doing as good a job with electric drive as it is with new technologies such as autonomous driving, driver assistance, and Internet connectivity, and also with new distribution concepts. And it has set up fast-charging networks. Tesla is one of those competitors that possess capabilities we still don’t have. Fifty percent of its engineers, for example, are software experts, whereas we still have far too small a percentage. This shows that we need to do significantly better. And we will succeed. This is why we compare ourselves to Tesla. Our goal is to use our capabilities not just to catch up, but even to overtake them.

What kind of capabilities do you mean?  
Our strength lies in our global development, production, and distribution network that allows us to come out with high numbers of units in a short period of time and quickly roll out new technology worldwide. The new Tiguan provides clear evidence of this. We make the vehicle on the same technical platform all over the world, which allows us to start up production almost simultaneously, and quickly produce large numbers of units. And, above all, we have an incredible team.

The Brand Management Board often holds its meetings at different Volkswagen locations, most recently in Russia and Brazil. Why is this?
We want to understand how the markets work – and to do that, we need to be there on site again and again, talking to employees and customers, and adapting our strategies to meet the needs of our customers. It would be a mistake to believe that the world of mobility takes the same shape and form everywhere else as it does in Wolfsburg and its surroundings.

You often travel to our sites around the world. For example, one recent trip took you to Pamplona in Spain, where employees at the plant are making the Polo. Your impressions?
Our factory there is well prepared for the new Polo. In fact, the Iberian Peninsula will have a major role to play over the next few months. We have two important start-ups there – the Polo in Pamplona and the T-Roc in Palmela, Portugal.

On to a current topic in the news: The diesel issue and accusations of collusion are currently damaging the automotive industry’s reputation. What is your view?
With the Volkswagen brand we’re making good progress in dealing with the diesel issue when it comes to the software conversions. We are able to reduce nitrogen oxide emissions by up to 25 percent on average. Our team has done an excellent job with this. And the most important thing is that customers are for the most part satisfied. We have overcome this part of the crisis. However, the automotive industry has been plunged into a further crisis of confidence due to the recent suspicion of illegal agreements being made. We need to be careful in Germany that we deal with the accusations cautiously and appropriately. Mistakes need to be remedied, but at the same time we mustn’t lose focus on issues relevant to our future.

How does the future looks for the brand?
We want to be as prominent and successful in the new automotive world as we were in the old one, or possibly even more successful. And we’re getting ready to do that. Our path to this new world is the Modular Electrification Toolkit (MEB), which we’re developing not just for Volks­wagen, but also for other brands in the Group. Our electric vehicles of the future will, just like smartphones, always be online and updatable. Making a success of this new vehicle architecture is a huge endeavor, one that can secure our future in the new automotive world.

You head a company with 200,000 employees. What do you enjoy about the job?
The Volkswagen brand has a long history and great charisma. It has wonderful ­products, a good team and strategy – and if we do everything right – a great future. Volkswagen might even be the brand with the greatest potential worldwide. Together with the team, I would like to exploit this potential. We need to be faster and more productive, and we need to embrace current trends more effectively. If we succeed in doing so, then the car of tomorrow will also be a Volkswagen. However, there’s a lot to do until we’ve made it that far. Speed and flexibility are what matters, and we need to rid ourselves of a hierarchical mindset. I enjoy doing this job. I also enjoy the daily progress made in the growth of the brand. I am confident that this progress also inspires a lot of employees.

We fellow residents of the Brand Tower, have noticed a few things: 1. You don’t always wear a tie; 2. You eat in the canteen; 3. On occasion, you walk up to your office on the 13th floor; 4. You drive your own vehicle. What’s that all about?
(Laughing) The things you notice! When it comes to the tie, I can say that I do wear one for important meetings, but in summer in particular, I find it pleasant to be able to go without one. And anyway, a tie is no longer as important as it was five or ten years ago. Why do I sometimes eat in the canteen? Because I like the food there, and I’m able to see what mood the team is in. As for the stairs – many of us don’t get enough exercise, which is unfortunately true of me as well. That’s why I take the stairs more often. And I drive my own car because this allows me to experience our cars, as well as competing products, in everyday situations, which helps me understand how we compare. And anyway I like to drive.

You’ve been speaking to employees directly in the “question time” events, of which there have been around 1,500 so far. Why are these discussions so important to you?
I find it good that we can experience and get to know each other on a personal level. We need to be able to interact directly. These events allow me to find out what motivates the team, what the mood is like, what the important questions are, and also what causes concern. We’ve meanwhile managed to create an open dialogue. I’m pleased about that.