DAY OF THE STRATEGISTS
Michael Jost, Head of Group Strategy Product and Chief Strategy Officer Volkswagen Brand, Volkswagen AG
With twelve brands, over 100 production sites, almost 650,000 employees and revenues of more than 231billion euro in 2017, the Volkswagen Group is a leading global automotive manufacturer, and Europe’s largest auto producer. In his Auto Summit lecture, Michael Jost repeatedly referred to VW as a ‘tanker’. The Group’s head strategist is in charge of setting a new course for that ‘tanker’ – and he has a clear plan.
The company, he said, was facing two big challenges: the age of digitalization, and establishing e-mobility for the masses. Jost sees digitalization as a game-changer that has already changed the entire VW group permanently. He said VW was undergoing currently a transition from a product-oriented to a customer-oriented group. “Customers are the focus; the whole business revolves around them.” Jost said this included full connectivity for all the brand’s future products. To achieve that goal, VW aimed to transform from a pure hardware to a software manufacturer, while building its own operating systems and working closely with external partners.
The second big challenge, Jost continued, was electromobility. “Electromobility must be a cornerstone of climate protection, and hence, a cornerstone of our future business model.” VW had committed to the goals of the Paris Climate Agreement of 2015, and was working flat out to make the best possible contribution to a carbon-neutral society in 2050. For Jost, two degrees of global warming is the ‘point of no return’. “If we fail, we cannot compensate – the ship will have sailed.” To calculate the schedule required, he worked backwards from 2050. Since achieving a carbon-neutral vehicle fleet would take 10 years, the first stop sign was in 2040 – the end of the road for combustion engines. Assuming seven-year product cycles, Jost said these carbon-neutral vehicles would enter the production stage in 2033. But as a platform-based company, VW would have created the basis for those vehicles seven years earlier, meaning 2026. “So actually, our colleagues are currently working on the last ‘combustion-only’ platform.”
To meet this schedule, Jost continued, VW was going all out to electrify the brand. “We’re not dabbling in e-mobility – we’re launching a campaign in 2020 that will electrify the world. This includes creating the infrastructure for electromobility.” The strategist added that reducing carbon emissions had to start in production. This included monitoring how suppliers manufacture batteries, drive technologies, equipment etc. The VW Supervisory Board had approved the corresponding implementation plan in November 2018. The goal was to offer customers automobiles that were produced carbon-neutrally.
To achieve this, Jost explained, VW was switching production capacities around to separate EV and combustion-engine car production sites in the best possible way. In future, for example, the I.D. Buzz – with two wheelbase options and a cargo version – would fill 50 percent of capacity at the Hanover plant. Jost emphasized that Zwickau was already all-electric, saying Emden would be next. “Emden will build 300,000 all-electric vehicles from 2022/2023 on.” The first car from CO2-neutral production would be the battery-powered compact car VW I.D. Neo, due in 2020.
Automotive Summit 2018 – Executive Summary
In early December 2018, over 600 automotive experts from all over the world – including manufacturers and suppliers, tech and energy companies, politicians and associations – attended the auto industry summit in Wolfsburg, Germany. From 3 – 5 December, the industry’s big hitters discussed strategies, concepts and technologies for tomorrow’s automobiles and the future course of their industry.