VW Accelerated Strategy
All things new
VW is betting everything on electromobility. Even more: with the new “Accelerate” strategy, the Lower Saxony car manufacturer wants to transform itself into a holistic mobility provider. The goals are ambitious, whether they can be achieved is questionable.
At some point there will be no turning back. This phenomenon is as old as humanity. “That, if I want to stand still in the wading, return would be as difficult as going through,” says Shakespeare’s Macbeth. What does this world famous quote have to do with VW? The Wolfsburg-based car manufacturer is betting everything on the electric mobility card and is investing huge sums of money. By 2025 alone, 35 billion euros will flow into new e-cars and the retrofitting of existing production facilities. The transformation has already begun, VW can no longer go back and if electromobility does not make the breakthrough it was hoping for, a disaster threatens.
But one thing has not changed: Only number one counts for the Wolfsburg-based company. This is how it is with vehicles with internal combustion engines, and this is how it should be with electric vehicles. The specifications for the next few years still come from the former brand boss Herbert Diess, his successor Ralf Brandstätter now has to implement them, whether he wants to or not. The new VW brand boss has packed his vision of how the Lower Saxony carmaker wants to achieve its place in the sun in a new strategy. The name is “Accelerate”, in German to accelerate. Interesting choice of words: If you want to accelerate, you are not satisfied with the status quo. The ID.3 sold quite well last year with 14,493 units, only the software is not always running smoothly.
“Volkswagen will be the most desirable brand for sustainable mobility,” says Ralf Brandstätter confidently. By 2030, sales of thoroughbred electric vehicles in Europe are expected to rise to over 70 percent, which is twice as many as currently, while in China and the USA it should be more than 50 percent. Bold figures as to whether Europe will mutate into an electric continent in nine years remains to be seen. The VW offensive is in full swing: the VW ID.4 will come onto the market in March, the SUV Coupé ID.5, known as ID.Crozz, will also appear this year, as will the large seven-seater SUV ID.6 which will initially be launched in China and will also come to Europe next year. Then the long-awaited ID.Buzz will also be part of the model range. In 2023, the Aero-B with a range of 700 kilometers should lure the last doubters of electromobility to Wolfsburg. A small entry-level e-model is to supplement the model portfolio in 2025.
But one thing is clear for the VW brand boss. “If you believe that e-mobility alone will make it into the future, you are wrong. The real game changer is digitization.” And that should penetrate the entire brand and ultimately the entire group. It starts with the production of the vehicle and ends with the generation of new earning opportunities, for example by re-ordering additional functions that are then played wirelessly on the car. The lighthouse model that will represent the new VW world will be the Trinity. The first sketches reveal an elegant coupé-like line. But what is more important is what is hidden under the sheet metal cladding. As early as the market launch in 2026, the car should be capable of level 2+ autonomous driving, later even level 4 should be possible. This coincides with another point in the VW strategy, according to which autonomous driving will be possible for many people by 2030. The Trinity will stand on a new platform, which will then be rolled out through downwards.
What VW packs in great words and sells as “Business Model 2.0” is also planned by other manufacturers, such as Tesla, or is already being implemented. The car is becoming a software-based product, and Volkswagen is creating the conditions for new, data-based business models. Accordingly, Ralf Brandstätter no longer spoke of the driver, but of the user, who perhaps only rents the vehicle and does not own it. By collecting the data, VW recognizes that people are covering longer distances more and more often and then offers them, for example, wireless upgrades that extend the range or enable autonomous driving functions. VW expects that this line of business can generate hundreds of millions.
In order to be able to release these elements for the driver, they have to be present in the car. This means that VW is completely turning production inside out and digitizing the processes. This is intended to bring costs down massively. The number of variants will be further reduced, basically you will only choose the battery size, the tires, the paint color and the interior. “Ordering a VW is as easy as ordering a smartphone,” promises Ralf Brandstätter. The expenses for logistics – for example due to the materials held on hand – will also decrease and as many work steps as possible will be carried out digitally. This means that fixed and material costs will continue to decline, while productivity will increase by five percent annually. That this will lead to a reduction in jobs can be counted on one hand. Talks with the employee side are already ongoing.
Profitability is paramount. In this discipline in particular, VW was not always top of the class. The Accelerate strategy stipulates that the operating return should be at least six percent from 2023. In order to achieve these ambitious goals, clear cutting will also be necessary, which thins out the current product range. While volume models such as the Golf and the Tiguan are to receive successors, the Touran will be phased out. It has not yet been decided whether the newly refreshed Arteon will be allowed to continue.