WOLFSBURG -- Volkswagen Group CEO Matthias Mueller mapped out a sweeping strategy overhaul focused on electric cars, automated driving and services such as ride-hailing in an effort to emerge from a diesel-cheating scandal that’s dominated the company for months.
VW will introduce more than 30 electric vehicles by 2025 to account for up to one-quarter of its deliveries as part of the transformation, Muller said today at a press briefing at the company's Autostadt exhibition center in Wolfsburg.
"We expect that by (2025) we will be selling about 2 to 3 million pure-electric automobiles a year," Mueller said.
Spurred by the biggest crisis in its history, Volkswagen is accelerating efforts to adapt to the industry’s shift toward self-driving electric cars.
Mueller said VW is developing self-driving technology inhouse and will offer fully autonomous cars in all the relevant segments at the beginning of the next decade.
Cumulative investment in new autonomous mobility solutions will amount to several billion euros, he said. "We will develop the necessary expertise and are planning to hire around 1,000 additional software specialists, among other measures," Mueller said.
Playing a leading role in the automotive industry “will require us -- following the serious setback as a result of the diesel issue -- to learn from mistakes made,” Mueller said in his first major strategy presentation since taking charge after Volkswagen admitted last September to cheating on U.S. emissions tests.
Mueller said the new goals will make the company “more focused, efficient, innovative, customer-driven and sustainable.”
Volkswagen plans to establish a mobility solutions business that will develop its own services as well as acquiring businesses in areas such as ride-hailing, robo-taxis and car-sharing. The goal is to generate billions of euros in revenue from the efforts by 2025, the carmaker said. A $300 million investment last month in ride-hailing app Gett was Volkswagen’s first foothold in the burgeoning field.
VW's hires including strategy chief Thomas Sedran, a long-time AlixPartners and Roland Berger consultant, and digital head Johann Jungwirth, formerly with Apple Inc., are key to the automaker's revamp. Herbert Diess, who joined from BMW Group a few months before the cheating became public, is in charge of the critical effort to lift profitability at Volkswagen’s struggling namesake brand, its largest unit.
The emissions scandal has so far cost the company 16.2 billion euros ($18.2 billion) and highlighted the risks of its rigid structure and focus on expansion, which caused it to largely miss the trends that led to the emergence of the likes of Tesla Motors and ride-sharing service Uber Technologies.
Combining components business
VW said it planned to bundle its components business, currently spread across 26 plants worldwide with 67,000 employees. The relevant activities are to be systematically combined across all brands and strategically realigned, the company said.
The realignment will give the components business greater entrepreneurial freedom, Mueller said. "We anticipate that this will improve transparency while boosting internal competition. It will also contribute substantially to future topics such as electro-mobility," he said.
It also said it aimed to reduce its sales and administration costs to less than 12 percent of sales and targeted an operating return on sales before special effects of 7 to 8 percent by 2025, up from 6 percent in 2015.
Volkswagen said it will present detailed steps to implement the strategy, broken down for its 12 brands and including financial targets, by the end of this year.
Automotive News Europe and Reuters contributed to this report