Lead
Introduction
This is the compulsion behind the turn of the mass elephant.
Author 丨 Du Yuxin
Responsible editor 丨 Yang Jing
Editor 丨Zhu Jinbin
Reduced the lineup of more than 100 fuel vehicles by 60%;
Don't care about sales volume and market share, pay more attention to sales quality and profit margins...
This is the latest strategy and thinking of Volkswagen revealed by Volkswagen Chief Financial Officer Arno Antlitz recently, as an international auto giant and once a global sales champion, so "crazy" to carry out changes, as well as a fundamental change in thinking, behind the embodiment of the Volkswagen elephant turn around behind the compulsion.
Anyone who understands understands that those who have the ability to win the championship will not be so humble as to think that the championship title and sales are not important. Since it is a new strategic trend of the Volkswagen Group, it will undoubtedly bring a series of new pattern changes and even chain reactions.
In fact, foreign media also analyzed that Volkswagen's new strategy will be a sign of profound changes in the automotive industry, because for decades, the automotive industry has been trying to increase profits by selling more cars, and global auto giants such as Volkswagen and Toyota, including luxury car brands such as Mercedes-Benz and BMW, are also happy to catch up with each other in the competition of global sales champions and market segments.
Behind the catch-up of sales is the scale, which was once regarded as the fundamental way of the development of the automotive industry, so there were mergers and acquisitions and restructuring of various groups, but under the spell of the sales ceiling, under the new energy transformation, industry environment, and market pattern, the operation of a larger scale and system will not mean greater consumption, especially in the face of the ever-shortening changes of the times, the more massive the system will be more difficult in the face of forced transformation.
There is no doubt that this change in Volkswagen's strategy may push the Volkswagen Group to abandon the competition for the global car sales championship, but instead move towards a healthier focus on the financial and sustainability aspects of the group. From quantity to quality, from sales competition to profit PK, this new era of automobiles, all rules and orders will be reshaped, new models and civilizations, will also usher in a new situation.
The curse of the giants
For an automobile group, who is more important in terms of sales volume and revenue profit?
If the masses of the past are allowed to answer this question, they must choose the former, and this is also the case.
Remember that Volkswagen's former CEO Wendern said after taking office: "We will surpass Toyota to become the world's number one automaker in a decade." It is about beating Toyota and General Motors to achieve the title of "sales first" before 2018, when under his leadership, the Volkswagen Group has been mainly aiming for sales growth. In pursuit of global dominance, Volkswagen has retained a large number of operations in the unprofitable North and South American markets, and has introduced new models to these regions in large numbers even after suffering heavy losses.
In 2014, the Volkswagen Group's annual sales reached 10.14 million units, exceeding the tens of millions of vehicles for the first time; in 2016, the Volkswagen Group beat Toyota's 10.175 million units with 10.31 million units, becoming the new hegemon in the global automobile sales list, which was two years earlier than planned.
But for Volkswagen, it was the "emission gate" incident on the road to winning the championship, and finally Volkswagen had to face a loss of more than 30 billion euros, losing net profit for at least two years. And the chain reaction brought about by the emission gate has also made Volkswagen almost peel off a layer of skin, so even if it stands on the global sales crown? The pain of the masses, such as people drinking water, cold and warm self-knowledge.
In fact, the position of global sales champion is not so wonderful to sit up, toyota won the first place from GM in 2008, and the next year it encountered a "brake door" in the United States, almost dying. Before the Lehman crisis, Toyota suffered from losses because of its excessive obsession with business scale, and had to let Akio Toyoda understand that when the excessive pursuit of numbers and scale, when the original intention is lost, the crisis comes.
Regardless of whether the original intention is to build a good car or maximize profits, it turns out that Toyota's profits are indeed the highest in the global automotive industry, and even under the same revenue, the profit has reached twice that of Volkswagen. As for sales, it is natural to come naturally.
If Toyota only pays lip service to the global sales champion and does not particularly care, then GM is using practical actions to show that they are not interested in the title of the world's number one sales. In 2016, GM's sales exceeded 10 million units for the first time, slightly less than Volkswagen and Toyota, and it is not impossible to return to the top of the list with another effort.
But in 2017, they very resolutely sold their European business to PSA, suddenly reducing sales by one million and voluntarily withdrawing from the championship competition. There is no doubt that GM, the industry giant that has dominated for 77 consecutive years, has put profitability more important than sales after experiencing the life-and-death test of the 2008 financial crisis.
Including the Renault-Nissan-Mitsubishi alliance, which defeated Volkswagen in 2017 and Toyota won the global sales championship, it has gradually moved towards the point of extinction in name only because of the entanglement of some nationalities and interests. Coupled with the impact of the epidemic, lack of core, strategy and other factors since 2020, the three major brands have lost money, coupled with the chain impact of the lack of core in 2021 and the Russian-Ukrainian war, this alliance that once won the global sales championship is almost impossible to return to the glorious moment.
In fact, all the cases tell us that the hidden dangers of rapid expansion are like Pandora's box that has been opened, unleashing disasters that no one can resist. If you ask again, who is more important in terms of sales scale and revenue profit? Volkswagen and its CEO Diess have not hesitated to choose the latter, especially in 2021, and Volkswagen has felt the importance of profit.
According to the Volkswagen Group's 2021 annual report, although sales were 600,000 fewer than in the previous year, operating profit increased to 20 billion euros, nearly doubling the previous year. Volkswagen says the reason for this result is that by selling models with higher levels of configuration, the quality of profitability has been improved, and by systematically distributing chips, we have been able to ensure a profit margin increase in the face of declining sales.
Perhaps Antlitlitz or Volkswagen's management Dies, through the financial results and changes in the pattern in recent years, have found the real development direction and future of the company. Coupled with today's automobile world, really can not be the same day, Tesla and the new forces of various provocations, intelligent, the rapid development of electric vehicles, bringing about the reform and reshaping of the system, in the face of radical new energy strategy and investment, volkswagen must adhere to the fundamental of enterprise development - profits, to maintain the operation of this giant ship, to ensure the adjustment of the strategic direction of the necessary reserve force.
Broken Arm and Nirvana
To tell the truth, if you want to wear a crown, you will be burdened, but the glory of the champion throne, who wants to easily "step down"? After all, it's about brand image and reputation, and it needs to be vigorously maintained at all times.
But the reality is that only those who are about to lose or are difficult to climb to the top will say the answer of "it is not important", but behind it needs to be a real understanding of what is more important than sales.
Presumably, whether it is Volkswagen or Toyota, or even SAIC Volkswagen, which is the first domestic car company, and Geely, which is the first in its own, have gradually figured out the development path of the enterprise, what is the pursuit in the end? Just as the passenger car enlightener SAIC Volkswagen lost the domestic car company championship after the inflection point, and just like the independent giant Geely after the peak of 1.5 million vehicles for three consecutive years, this transformation is always accompanied by a company that wants to become outstanding.
Therefore, cutting down fuel vehicles for the first time in history is more like a broken arm survival for Volkswagen under the transformation of the automobile era, even if it is currently from the European market, it is bound to extend to the Chinese and American markets in the future. "Even if Volkswagen spends 52 billion euros (the largest investment of its kind) to enter the electric vehicle sector, it will not increase unnecessary sales." Antilitz said.
There is no doubt that this series of actions is a part that must be experienced in the process of promoting Volkswagen's new energy strategy.
According to the Volkswagen Group's 2030 NEW AUTO strategy, the proportion of pure electric vehicles will be increased to 50% by 2030, and by 2040, almost all new cars in the group will achieve zero carbon emissions in major markets, and completely carbon neutrality by 2050 at the latest. Under this goal, the basis of revenue and sales is expected to gradually shift from internal combustion engine vehicles to pure electric vehicles. The combustion engine vehicle market is expected to decrease by more than 20% over the next 10 years, while the electric vehicle market is expected to grow rapidly, becoming a leading technology surpassing the internal combustion engine vehicle market.
Volkswagen said the strong cash flow generated by the lucrative internal combustion engine business could fund and accelerate the transition to electric vehicles. The synergy of reduced battery and plant costs and scale expansion is expected to help improve the profitability of electric vehicles, while the profitability of internal combustion locomotives is expected to be further reduced by the cost and tax disadvantages of high CO2 and Euro 7 emissions.
Implicitly, Volkswagen needs to transform, for example, by needing more money, especially as Volkswagen plans to allocate 73 billion euros to future technologies by 2025. In response to this new strategic approach, the Volkswagen Group has raised its operating margin target for 2025, increasing its operating margin from the current 7-8% to its current 8-9%. At the same time, it had to optimize its internal combustion engine vehicle business by shrinking the combination of models and internal combustion engine drivetrains and improving pricing policies, and it became natural to find a balance between sales and profits.
Especially in the downturn of the market, the turmoil in the world situation has brought about an increase in the cost of the upstream of the industrial chain, and the estimate that Volkswagen electric vehicles will soon be as profitable as fuel vehicles has been questioned. Diess has also admitted that the cost of new energy vehicles is "a hurdle". The depth of the industry has expanded dramatically, the lineup of Volkswagen models is huge, and there are more than 300 models in the world, which is far inferior to Toyota in terms of cost control.
In the face of problems such as electrification profitability, Toyota, which has achieved stability and lean to the extreme, still has a long way to go. The public, too, is no exception. The transformation of new energy, the two shackles are tightly bound to all market participants, how to achieve a balance between traditional business and new sectors.
According to Volkswagen's plan, they will add many pure electric models, but they will not increase new production capacity, but will carry out the transformation and upgrading of fuel vehicles to electric vehicles in one factory after another, and retrain workers at the same time. Antlitz added that the principle of costs falling over time remains "unchanged" and that new battery technologies will reduce costs in the long run.
Of course, in the Chinese market, which accounts for one-third of Volkswagen's market share and profit contribution, Volkswagen's strategy of "abandoning" global champion sales is bound to bring a series of chain effects, especially under the guideline of making more money.
So we can almost expect that in the low-end market of Skoda, at least in the current stage of fuel vehicles, Volkswagen will not invest too much energy, which can also mean that these companies and brands will usher in a further decline before entering the new energy vehicle stage; and similar to SAIC Audi, and Volkswagen Anhui, on the future product introduction and new energy layout, Volkswagen seems to be further increased, and more products will come in the next few years.
How Volkswagen's story will be written, leaving the public with the top of the tide or sliding into the abyss, we do not know, but there is no doubt that the competition and pattern of the future automotive world, along with the turn of an auto giant, will be more exciting.
| Du Yuxin |
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