Volkswagen needs to make urgent changes to become more of a tech company as the industry enters the digital era, CEO Herbert Diess said Thursday, warning that the German car giant had just "one shot" at staying in the game.
"The time of the classic car manufacturer is over," Diess said in a speech to senior executives, as the industry undergoes "radical transformation" to make cars greener and smarter than ever before.
"Volkswagen's future lies in becoming a digital technology company," Diess said.
He singled out US tech firm and electric car pioneer Tesla as an example of the kind of fierce and unorthodox competition the company was up against.
Diess's warning comes as the car industry is grappling with tough new EU emissions rules that came into force in 2020, pushing automakers to accelerate their costly switch to hybrid and electric cars.
At the same time, companies are pouring billions of euros (dollars) into new technologies like self-driving and internet-connected "smart" cars — just as carmakers are smarting from weaker global demand.
To master the challenges, Diess said the group needed "a shared understanding of the radical nature of the changes" and be prepared to "slaughter holy cows" — a possible nod to future cost cuts.
"We have exactly one shot at securing our future. Let's use it," he added.
The 12-brand VW group, which includes Porsche, Seat, Skoda and Audi, has set itself the goal of selling 32 million electric and hybrid vehicles by 2029.
The group is investing some 30 billion euros ($33 billion) in electrification over the coming years and is pinning much of its hopes on the "ID.3", VW's first mass-market, all-electric car.
Diess said Volkswagen had to avoid the fate of cult mobile phone maker Nokia, which "went under in the battle against Apple" because it failed to read the sign of the times.
"This exact scenario is repeating itself in the auto industry," he warned.
Volkswagen hit with big Polish fine over Dieselgate
Warsaw (AFP) Jan 15, 2020 –
Poland's consumer protection office (OUKiK) on Wednesday announced a 120 million zloty (28.5 million euros, $31.8 million) fine for Volkswagen's Polish subsidiary over the Dieselgate emissions scandal.
"The fine for Volkswagen Group Polska is more than 120 million zlotys… the largest fine ever handed out by UOKiK for a consumer rights violation," the watchdog stated.
"Volkswagen manipulated gas emissions indicators and misled consumers in maintaining its vehicles respected the environment," read a statement from the regulator.
Volkswagen Group Polska responded by rejecting responsibility in the affair which severely dented the German group's reputation and cost it billions in fines after it admitted in 2015 to fitting cars with software designed to cheat emissions tests.
The group placed so-called "defeat devices" into engine control software, designed to make them appear less polluting in the lab than in real driving conditions.
"This behaviour continued for eight years (2008 to 2016). During the investigation the group never came up with proposals for an amicable solution," UOKiK president Marek Niechcial said in a statement posted to the consumer body's website.
Volkswagen Polska stated for its part it saw "no legal foundation for the sanction handed down by UOKiK.
"In our view, the president of UOKiK embarked on a procedure targeting the wrong entity — Volkswagen Group Polska being merely an importer of vehicles with no knowledge of the problem of nitrogen oxide emissions in EA189 engines," the subsidiary stated.
Volkswagen admitted to emissions cheating affecting 11 million vehicles worldwide in a scandal which has to date cost the group more than 30 billion euros in legal costs, fines, buybacks and compensation payouts, the bulk in the United States.
