Matthias Muller is no slouch.
He ran Porsche before the emissions scandal blew up in VW’s face. He then took over as VW CEO in September last year.
I’ve been tipping him as a CEO to watch since last December. And I’ve been watching VW closely – last year I advised the car giant to get serious about EVs.
Looks like they’re listening.
Muller just announced VW’s new strategic plan. It’s a big deal and people are sitting up and taking note. He’s called it VW’s “biggest transformation in the company’s history.”
I’m inclined to agree.
The analysts are already getting stuck into the detail. Efficiency gains, €8Bn savings, a combined Group components business with 70,000 employees, and margins up to 8%.
But the really interesting stuff is VW’s total commitment towards EVs, battery tech, digitization, and autonomous driving. Muller says he’ll create “entirely new areas of competence for the Group” which includes of course Audi and Porsche.
Development of EVs is going into overdrive. Over the next 10 years, VW will develop around 30 new battery powered electric-car models. This could rapidly account for 25% of VW total sales.
Muller says he’ll launch the first fully autonomous vehicles by the end of the decade. That’s in less than four years. They’re hiring 1,000 software specialists to help them do it.
This caps VW’s recent announced of $300 million investment in GETT, an Uber rival. His plan is to put GETT at the heart of a new ‘mobility services division’ delivering €1 billion revenues by 2025.
For those of you who don’t know, ‘mobility services’ are going to destroy the traditional model of car ownership. Who wants to spend tens of thousands on an asset that sits idle in a car parking space 90% of the time? Mobility services – shared cars – are possibly the single biggest threat to old fashioned car makers, and VW has jumped on that bandwagon good and proper.
And Muller announced his plans to make battery technology a core competency at the group. At the moment, car makers rely heavily on suppliers for their batteries.
VW is investing €11bn on innovation in batteries, electrification, and related technologies, and the car company is in a good place, literally. Just across the border, in the Czech republic, lies Europe’s largest lithium deposit. This deposit at Cinovec, is perfectly located to supply VW and others with this vital element which Goldman Sachs has dubbed the ‘new gasoline.’
So good for you, Herr Muller. VW had a brush with the grim reaper last year and some thought this venerable brand may not survive. But (as I have written previously) these events may not have been entirely of VW’s making.
When the going gets tough it is heartening to see bold, clear and smart strategy from the new leadership. VW’s plans make sense to me.