Market launch of the Golf botched, trouble with the powerful works council, bad China figures: the balance sheet of the outgoing VW boss is moderate. Engine expert Thomas Koch believes that Diess’ radical electric strategy ultimately contributed to the fall.
VW boss Herbert Diess will vacate his post in a few weeks. This came as no surprise to some. We spoke to the industry insider and chairman of the scientific society for automotive technology and engine construction wkm and director of the Karlsruhe Institute of Technology, Professor Thomas Koch.
FOCUS Online: The CEO of Volkswagen is surprisingly replaced. How do you rate that?
Thomas Koch: In my opinion, that was the logical last step in a development that has been going in the wrong direction for years. This move is by no means surprising and was anticipated by many.
Diess’ balance sheet contains light and shadow. It was courageous that he pushed ahead with the expansion of electromobility with such enthusiasm. The next generation of vehicles, which also assume the function of local energy storage and, thanks to the bidirectional system, allow customers to transfer electrical energy from the car to their own home, will certainly find buyers. VW will offer interesting electric vehicles on a par with the competition.
It was also a step in the right direction to press ahead with the development of Cariad’s own software development at high pressure. Incidentally, given the enormous complexity of the software, it is not surprising that the technical challenges cause headaches.
And why did he fail?
Unfortunately, he is also responsible for a number of wrong decisions. As far as I know, Mr. Diess was about to be thrown out in the summer of 2020. He had to give up his position as chairman of the core Volkswagen brand back then. According to the “Handelsblatt”, he had accused the presidium of the supervisory board of criminal offenses at the time. At that time, the Supervisory Board reacted very cautiously and in the interest of the entire group.
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The messed-up market launch of the VW Golf, which is still the group’s most important model, is also down to Diess. In addition, there are general quality defects in VW vehicles. Compared to the Winterkorn era, the core of the brand, vehicle quality, has meanwhile been crushed in competition with Korean competitors. The decline in market share in China to around 11 percent is also problematic for Volkswagen.
From my point of view, the most serious wrong decision was the drive strategy, which could be described as “electric car only”. Competitors Stellantis and Renault-Nissan, as mass manufacturers, have clearly distanced themselves from such a strategy and have called for a Plan B from politicians. VW under Diess, however, as the largest German car company, has sacrificed its brand core of affordable and long-range vehicles for the broad public, so to speak, for electromobility. In my opinion, what might still work for a premium brand like Audi is simply not feasible for a brand like VW.
But other companies are also getting out of the combustion engine, at least on the European market.
This is ultimately a politically justified decision that should not have been supported in the volume vehicle segment. It is important to know that both Volkswagen and Audi have not even signed the COP26 agreement “phasing out the internal combustion engine”.
At the same time, Volkswagen in particular has unnecessarily argued in the automobile associations against the companies that prefer freedom of technology and the coexistence of several types of drive. As is well known, as a consequence of this policy, associations such as the VDA and ACEA have become divided.
In this context, do you think that Diess’ clear rejection of climate-neutral e-fuels was a mistake?
Experts were at least surprised by this attitude. In July 2022, Mr. Diess emphasized that CO2-neutral fuels were not affordable for the masses, although moderate costs of 1 to 1.5 euros per liter were mentioned in the group for pilot plants. Representatives of the mineral oil industry are already promising 80 cents per liter. Under the radar, Volkswagen has at least approved the biogenic diesel fuel HVO for its vehicles. Such fuel alternatives are a good complement to electromobility. The overall system efficiency of both powertrain technologies is comparable. It will be interesting to see if Volkswagen officially reassess e-fuels again. The new CEO Oliver Blume has at least promoted the use of e-fuels at Porsche in parallel with the electric offensive.
Will Blume find it easier to navigate the tanker Volkswagen?
In any case, Blume knows the complicated group of companies of the Volkswagen Group from his time at Audi. He very successfully manages the Porsche brand, the jewel of the group so to speak. He enjoys great respect from the employees, is considered level-headed, fair, opinionated and still a good team player with the ability to listen. He is also respected by many employee representatives, which is an important element at Volkswagen.
All recent VW bosses have had to deal with the diesel scandal sooner or later. Will this also be a construction site for Blume?
Overall, in my view, the Supervisory Board has pursued a very prudent and far-sighted strategy. With every day that Mr. Diess was in office, his successor was able to start off with less of a burden from the past. Incidentally, this year we are expecting the key judgments of the European Court of Justice on core lawsuits in the context of the Volkswagen diesel gate. As an aside, it should be mentioned here that the situation in Europe is by no means as one-dimensional as is typically claimed and that the courts carry out a highly complex technology assessment.
Do you think that the change at the top of VW is also a signal to politicians? In terms of electrical strategy, they are actually pursuing the same goals as Diess.
You have to look beyond the European horizon. From a global perspective, an “electric only” strategy that is based solely on ideology and not on feasibility will fail – at least in the volume segment. In my opinion, it is important for environmental protection, the economy and also the employees that we retain the freedom of drive technologies for Germany as an industrial location, because all of them can be used in a climate-friendly way. This openness now seems possible again.
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Jens Meiners conducted the interview
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