Talking to Prof. Dr. Martin Winterkorn

DIRK MAXEINER: Dr. Winterkorn, it is your stated goal to overtake Toyota as the world’s most successful automaker. Have you not bitten off more than you can chew?

PROF. DR. WINTERKORN: I firmly believe that the Volkswagen Group is the most forward-looking company in the automobile sector. In terms of innovative strength, design, precision and quality we are already better than our Japanese competitors. But we’re also aiming to top the tables as far as customer satisfaction, sales and returns are concerned. We laid the foundations for doing that last year.

What exactly does that mean?

Well, to start with we’re working very hard on making both the Group as a whole and the Volkswagen brand in particular more profitable. A more return-oriented approach, better processes, higher sales performance – these are all measures that are already translating into excellent figures. And we’ve also launched an as yet unmatched model offensive. The Volkswagen Group will be introducing 20 further models over the next 36 months. On top of that, there will be the successors to exist­­ing vehicles, such as the new Golf VI. We are intensifying our activities in segments like SUVs, pick-ups and vans, where we were hardly present in the past. If you look to US automakers, you can see what happens when an automobile manufacturer doesn’t make an intensive commitment to developing new models.

New products are one aspect, but where is demand supposed to come from? Your established markets are pretty sluggish, aren’t they?

With a differentiated product offering we can set new trends and win market shares in countries such as Germany and the USA. A good example is the Volkswagen Tiguan which immediately catapulted to the top following its market launch, becoming a bestseller in the SUV segment. But it’s also correct to say that our growth chiefly comes from markets such as China, India, Brazil or Russia. These are markets where the thirst for mobility is enormous. That’s why we’re developing these markets with very specific measures such as new plants, supplier networks and sales companies.

You’re hardly likely to succeed with your traditional vehicle program.

That’s correct. It’s vital that our vehicles are very carefully tailored to the regional needs of customers. The “global car” is well and truly a thing of the past. If we look at India, for instance, this means we must build small, very inexpensive cars which are nevertheless convincing in terms of quality, customer benefit and environmental compatibility. One example is our New Small Family, which we presented as a study in 2007. We will be building a version of the up! for metropolitan areas in Western countries as well as variants specially designed for emerging markets. That brings us a potential sales volume of 500,000 cars per year in the long term.

What is your response to the criticism leveled by some that Volkswagen has missed the boat as far as CO₂ and environmentally compatible vehicles are concerned?

I would suggest that those critics take a good look at the facts. We launched the very first three-liter cars as early as the late 1990s with the Lupo and the Audi A2. Not only that – the Audi duo introduced in 1997 was the first series production hybrid vehicle in Europe.

Production of all these models has been terminated…

Environmental innovations have to be accepted by our customers, too. So the price is an important factor. That’s why we’re focusing closely on optimizing the Volkswagen TDI and TSI engines or Audi’s TFSI technology. Volkswagen’s BlueMotion series, Audi’s e-models, SEAT’s Ecomotive line or Škoda’s GreenLine vehicles already cut consumption quite significantly without sacrificing driving pleasure. We’re looking towards the future, too: we’re making massive investment in second-generation biofuels. And we’re working on series maturity for alternative drivetrain techno­logies such as hybrid engines, fuel cells or plug-in electric systems which are recharged by connec­ting a plug to a regenerative electric power source.

What about the USA, where Volkswagen used to be a cult?
There isn’t much of that left now...

We hit the reset button in the USA last year. We’re moving closer to our dealers, closer to our customers. That’s the only way we can really play a dominant role as the largest European importer – as THE German automaker – and follow up the successes of the Beetle era and the T2. I believe this also calls for production in the Dollar area. But more important still, it requires the right products. These have to be products which are finetuned to the wants of American customers – design, equipment and, of course, price.

Should I be buying Volkswagen shares now?

Our share price reflects the success of our Group. We were the listed automaker with the best share price development in 2007. We will resolutely continue to press ahead with our profitable growth course. We are investing in our future with great care and deliberation, using sound judgment and deploying our own resources. At the same time, we are keeping a close watch on costs. We have laid the foundation to make the Volkswagen Group a jewel for its shareholders in coming years and to create sustainable value.

That sounds good. But how does it relate to today?

We’re already in a position to develop and produce our vehicles much more efficiently today. Our modular component system gives us a completely different grip on development costs, procurement costs and production costs. We can only survive compe­tition if we get all our costs and processes right. And we’re working flat out on that throughout the company.

How are you going to inspire your employees to join you?

Our employees play a key role. We need a top team to shape the future. We need people who take pride in their work, who are proud of the vehicles they build. Our most valuable asset is the potential and creativity in the hearts and minds of our workforce. We’re already making good progress here. But we need the best designers, engineers, technicians, commercial staff and marketing professionals. The Volkswagen Group must become the first choice for the top talents in our industry. That’s why developing young potentials and our reputation as an attractive employer are right at the top of our agenda.

You’ve set the benchmark for the Group and its brands very high.
What makes you so certain you will achieve your goals?

For me, the Volkswagen Group is today the world’s most fascinating automobile manufacturer. We cover the entire product spectrum, from the inexpensive compact car through the super sports car to the 40-tonne truck. And, apart from us, who else brings together eight brands under one roof so successfully? Each of these brands is a veritable gem in its own right with a strong independent profile. I don’t think we need be afraid of any competitor.

Would you risk making a forecast and telling me where you think the Volkswagen Group will be ten years from now?

This company, its brands, and above all its people have almost inexhaustible potential. Our ideas, our know-how, the synergies we have yet to leverage: all this gives us confidence to master the challenges that lie ahead. Ten years from now we will be the benchmark when it comes to customer satisfaction, attractiveness as an employer, quality, returns, and also our commitment to the environment and society.