Automotive News Europe - Talk From The Top Supplement - December 2019 - 39

AUTOMOTIVE NEWS EUROPE

TALK FROM THE TOP

the battery. What does that mean for
residual values?
This is an important topic. With the share
of leases expected to roughly double to
more than 70 percent for battery-electric
vehicles, a lot of these cars will end up
being returned to us such that we have to
sell them back into the market. Therefore,
we calculate and budget necessary resources for the remarketing of EVs when
they are sold. I believe we can achieve
structurally higher residual values with an
EV compared with a combustion car.

Every [VW
Group] brand
competes for the
best [sales] results
so it's my job to
optimize profits
across the
entire group.

for each brand to maintain its own IT
system. We have synergies here in the
tens of millions of euros we can leverage.
But it's not just about costs. It's also a
matter of operational speed.
Last year the changeover from the
New European Driving Cycle to the
WLTP homologation test led to a major
disruption in supply, costing the group
1 billion euros. You warned of a potential bottleneck this year as well due to
WLTP. How big of a hit did you see?
We have been much more successful in
managing this, so I am confident our business won't be disrupted in a material way.
Nearly 90 percent of all engine-transmission combinations are already available
to customers. The financial headwinds
are negligible this year.

ing how they manage their investments
in dealerships, which they operate like an
independent company, and we learn from
their greater proximity to the customer.
That being said, as the automaker we don't
want to invest in bricks-and-mortar retail
except in very select cases. We want our
partners to invest their capital in our busi- Next year we have the elections in
ness because it is an attractive investment. the United States, and President
Trump is likely to maintain pressure
How would you describe your job on the government in Beijing. Does
compared with the sales chiefs at that mean that China, your largest
brands
such as VW, Skoda and Audi? market, will not recover?
How does this impact VW's profitability?
The better we can control that process, Every brand competes for the best re- It's true that the weakness is primarily a
the higher our residual values are, the sults, so it's my job to optimize profits result of trade tensions with the U.S. and
across the entire group. For example, less related to other effects -- such as the
lower the incentives are and the lower
that could mean ensuring that a brand early introduction of China 6 emission
our overall distribution costs are. We bemight not use excessive sales support standards in certain parts of the counlieve optimizing the latter will deliver a
to the detriment of others in a market try, for example. We don't see a further
significant contribution toward reaching
where it is already strong. That's where decline, but we are forecasting a difficult
our margin targets.
I step in and correct the situation. I also 2020. In the midterm, however, we exWhen VW paid 3.3 billion euros eight handle the overarching issues, such as pect a recovery as the market is a strucANE
years ago to acquire dealer group digitalization in retail. It makes no sense tural growth story.
Porsche Holding Salzburg from the
Porsche and Piech families, it was criticized as a sweetheart deal. Automakers should not be investing in a downstream operation with lower structural
margins. Last year it sold nearly 1 million new and used cars, and this year
it took over your Portuguese importer.
What importance does it play?
Beyond exclusively serving the Austrian
and eastern European markets, they serve
very important functions. They open up
new markets for the group, such as Malaysia, Chile and Columbia, since their
nimble structure and entrepreneurial savvy
are particularly effective in small markets
where the group is less well-suited. They
also operate Porsche Informatik, which designed the Cross dealer management sysVW believes it has addressed two of the key hurdles to the
tem that we use both internally as well as
acceptance of EVs with the ID3: range and affordability.
offer externally. We also benefit from learnWhy?
Roughly 4 percent of all VW Group worldwide sales next year will be EVs. When
this first wave of off-lease cars are sold
as used cars in three years, we expect
battery-electric vehicles as a share of our
overall business to have risen to roughly a tenth of volume. By extension, that
means these vehicles will be entering a
market where we foresee rising demand
combined with a relatively low supply.

2019

In Partnership with

www.autonewseurope.com

http://www.autonewseurope.com

Automotive News Europe - Talk From The Top Supplement - December 2019

Table of Contents for the Digital Edition of Automotive News Europe - Talk From The Top Supplement - December 2019