If the mission of former Volkswagen CEO Wendern is to catch up with Toyota, and the mission of former CEO Mullen is to get out of the shadow of the "emission door", then the mission of the current CEO Herbert Diess is to hold the rudder, avoid the giant ship from deviating from the right direction, break volkswagen's "traditional car manufacturer" label that has lasted for more than 80 years, and ensure that the reputation of the "Made in Germany" sign "does not lose its luster".
But in the face of such a large and complex automobile empire, coupled with a world of violent turmoil and profound change, as the guardian of the glory of the empire, the challenge before Dis is very difficult.
Crisis of Empires
On June 30, 2021, the whole of Germany began to lively after nightfall, the windows of the cars were planted with German flags, the fans changed into german team jerseys, painted the German flag on their faces, walked to the bar, open-air viewing stadium, waiting for the European Championship 1/8 final at Wembley Stadium in London that night - Germany vs. England.
Two hours later, the streets from Berlin, Munich to Wolfsburg were overwhelmed, and the German team healed England's inferiority complex with a 0:2 defeat, and once again showed the world the ups and downs of the former "chariot". At this time, the biggest sponsor of the German team, the Volkswagen Group that replaced Mercedes-Benz with an annual sponsorship fee of 25 million to 30 million euros two years ago, must be in a difficult mood.
The most lamented thing in life is the beauty of twilight, the hero whitehead, and the afterglow of the empire. The aura of leadership of the German chariot is fading, and the recession crisis is not only the deadlock that the sluggish German football needs to break, but also the real situation that Volkswagen, which once stood on the top of the world after nearly 85 years of history, is facing the real situation at this moment.
In the last month of 2021, news came that Diess had been retained as CEO of the Volkswagen Group, but the authority of this position was further weakened, and in the last confrontation with the union, Diess had lost the position of CEO of the Volkswagen brand.
Back in 2015, seven years ago, when the head of Volkswagen was Still Winden, the profit margin of the Volkswagen brand the previous year was only 2.5%, far lower than the 10.1% profit margin of competitor Toyota.
In order to catch up with Toyota and improve profit margins, Wendeen will recruit from the BMW dodge Dis, in BMW, Dies has a nickname called "cost killer", the industry believed at the time: if someone can complete the Volkswagen at that time set to reduce operating costs of 5 billion euros, then this person must be Dies. Turning Volkswagen's sluggish core business into a profit machine was The main task of Diess in 2015 to take over the volkswagen passenger car brand.
After taking office, Diess has internally pushed a series of reforms to cut costs and improve efficiency, which not only fully demonstrates the ability of "cost killers", but also establishes a good image within the Volkswagen Group, where its interests are intertwined. In 2018, when volkswagen CEO Mullen was dismissed early due to the exhaust valve, the oar rudder of Volkswagen's giant was naturally handed over to Dees, a Bavarian outsider.
The Iron Mask, hard-line Dees once wrote in an op-ed in the German newspaper Welterberg: "The moment I took office in Wolfsburg, I was already determined to change the system of the Volkswagen Group. This means breaking the old rigid structure and making the company more flexible and modern. ”
Over the past few years, as the car track has become more and more crowded, Volkswagen's brand advantages that have been built for many years are being eroded, and the pressure on this "giant elephant" to run is increasing.
In 2021, all of Volkswagen's brands combined sold 8.88 million units worldwide, about 500,000 fewer units than in 2020. About 40% of the 8.88 million units sold were in the Chinese market, and Volkswagen is too dependent on the Chinese market compared to its old rival Toyota, which is not a global player. To make matters worse, Volkswagen's cumulative sales in China in 2021 were 3.3 million vehicles, down 14% year-on-year and a new low in eight years.
In 2021, Tesla's sales of the world's electric vehicles reached 921,642 units, more than double the sales of electric vehicles of the Volkswagen Group. Between Tesla, which produces less than 1 million vehicles a year and Volkswagen with an annual output of 10 million vehicles, Dies has already smelled danger, and he has a strong sense of crisis than any other traditional car company giant executive, and his vigilance against Tesla and Musk has reached the point of "threat" and "intimidation" within Volkswagen. "Even though I don't talk about Elon Musk anymore, he's still there, is revolutionizing our industry and is rapidly becoming more competitive," he said. ”
The drums of war have sounded, and Dees knows that sooner or later the weak boy will become a lion.
Race against time
The ancient Roman philosopher Augustine once said, "Faith is to believe what we have not seen, and the reward of this faith is to see what we believe." ”
All those who see the trend have created faith, just like the former Ferdinand Porsche and Honda Soichiro, and the current Musk.
20 years ago, the people who appeared in domestic film and television dramas to drive volkswagen Santana were either rich or expensive, and 10 years ago, those who liked golf GTIs must be people who knew cars. In the past many years, Volkswagen has easily gained 20% of the market share in the Chinese market every year, relying on VW's "god car" belief.
The watershed comes in 2020. After Volkswagen's sales in China reached a new peak in 2019, Volkswagen's sales in the Chinese auto market fell by 6.8% in 2020, exceeding the overall decline in the Chinese auto market that year; in 2021, Volkswagen fell sharply again, down 14% year-on-year.
In 2021, various black swan events occurred frequently, and the entire industry continued to be challenged by the spread of the epidemic and chip shortages, but in a dark cloud, the Chinese auto market still handed over production and sales of 26.082 million vehicles and 26.275 million vehicles, an increase of 3.4% and 3.8% respectively year-on-year. This makes the Volkswagen walking on the downhill road embarrassing, somewhat out of place.
In addition, in the past year, under the dual force of national policies and market factors, China's new energy vehicles as a whole have "exploded" scene, a large number of Local New Energy enterprises in China have shown a fierce momentum of catching up, more than 6 OEMs with annual sales of new energy passenger vehicles exceeding 100,000, and xiaopeng, Weilai and ideal sales of the first camp of new car-making forces have also exceeded 90,000 vehicles. The sales of the ID series of electric vehicles, which are highly expected by Volkswagen, last year was 70,000 units, which did not meet expectations. This new species with the VW sign can no longer easily harvest brand dividends.
If you can't win this new energy competition in the world's largest market, it will mean a huge failure for the public.
However, in the face of such a car giant with a complex equity structure and 85 years of history, every step of the "airborne" Diess sword to implement change is destined to encounter greater resistance than the predecessors Wendern and Mullen.
Previously, some industry analysts firmly believed that as long as Pierch no longer controlled the situation, the complex ownership structure of volkswagen groups would eventually lead to open and secret struggles between various shareholders, and only Pierch could make decisions in the group's equity structure that no one had real control over.
In Wolf Castle, in the pull and collision of various powers, Dis had to frequently poach from his old owner BMW. Hildegard Waterman, currently Audi's global sales and marketing director, Marcus Douzmann, current Audi CEO, and Jorge Hoffmann, who will be in charge of the industrialization of solid fuel cells at Volkswagen, are all from the BMW camp. Dies is quietly establishing its own independent kingdom in the Volkswagen Group.
"Let's change the course and let Volkswagen be the car of the future."
Under the leadership of Diess, Volkswagen abandoned many low-profit projects, such as the discontinuation of Phaeton, Beetle, Scicco, etc., while in the US market, Volkswagen discontinued the Passat model. Meanwhile, Diess began to transform Wolfsburg and lay off a lot of jobs, pushing for cost cuts to pay for huge investments in electric and self-driving cars.
According to the plan proposed by the end of 2021, Volkswagen will invest a total of 159 billion euros over the next five years, of which 89 billion euros will be spent on electric mobility and digital-related technologies, accounting for 56% of the total investment. By 2028, Volkswagen will launch 70 new electric models worldwide. It plans to deliver 22 million pure electric vehicles worldwide, more than half of which will come from China.
There is no doubt that Volkswagen is betting heavily on the Chinese market for the electrification revolution in the coming years.
In fact, in terms of electrification and digitalization, under the impetus of Diess, Volkswagen has been in a leading position among established car manufacturers, but compared with Tesla and some local new car manufacturers in China, Volkswagen has begun to fall into the role of catch-up.
But Dees's aggressive actions inevitably touched the nerves of the union, and before Dies, both Mullen and Wendern had not been able to safely step down from the Volkswagen CEO position, and for Dies, time would be the biggest variable whether he could deliver on his promises.
"When I became CEO of Volkswagen five years ago, the group lacked a valuable asset that has not been able to make up for it even now, and that is time." As Diess said, the transition from "traditional cars" to "new mobility" will require two life cycles of automotive products, which can take 10 years from 2021 onwards. But judging from the results of several previous struggles with the unions, there is not much time left for Dis, who has struggled several times on the brink of unemployment.
Ferdinand Dudenhof, a well-known German expert in the automotive economy, once said in an interview: "If Diess has to leave, the Volkswagen group will fall into the abyss and become a plaything for politicians and trade union interests." ”
Holding on to the 85-year-old Empire's afterglow could be Dis, the 64-year-old iron-fisted man's most pressing and daunting mission in the final leg of his career.