VW Sales Director Klaus Zellmer
The former Porsche manager will be responsible for sales at the VW Group.
(Photo: Bloomberg)
Düsseldorf At the beginning of the year, the Volkswagen Group lacked electronic components for vehicle production. As a result, it may not be possible to build more than 100,000 vehicles in the new year. “We will fight for every car in 2021,” said VW sales director Klaus Zellmer in an interview with the Handelsblatt. Golf production in Wolfsburg is particularly affected by the lack of chips.
Volkswagen is hoping for improvement in the second quarter of 2021. “But nobody can predict with absolute certainty that we will then have the situation completely normalized,” continued Zellmer.
The electric offensive of the Volkswagen Passenger Cars core brand is to continue unhindered in the new year despite the shortage of parts. VW expects additional momentum from the new “Green Deal” of the European Union and the associated tightening of climate targets. “The ‘Green Deal’ accelerates our transformation towards electromobility once again. In the future, we will have to produce around 300,000 additional battery-powered vehicles every year, ”stressed Zellmer.
When it comes to software updates “over the air” analogous to a smartphone, Volkswagen intends to catch up in the new year with its US competitor Tesla, which has been offering the service for its e-cars for some time. “We want to start with the ID.4 first, probably in the second half of the year. Our developers are working flat out on this. The new Golf is not there yet, we’re starting with the fully electric models, ”said the VW sales director.
Read the full interview here:
Mr. Zellmer, the entire VW Group is no longer getting enough chips. 100,000 to 200,000 cars will therefore not be produced in the new year. What does this mean for the core brand VW Passenger Cars? We cannot yet name any scope – neither for the Group nor for the brand. The lack of chips has different effects on the individual series. For example, our Golf and thus production in Wolfsburg is affected. We therefore stopped golf production well before Christmas and will not start again until mid-January. The Tiguan, on the other hand, is not affected to that extent.
How did the shortage come about? After the corona-related slump in spring, many did not expect that the demand for cars would come back so quickly. The chips were subsequently guaranteed to the manufacturers of consumer electronics and are now lacking in the automotive industry. We will probably still feel this deficiency throughout the first quarter of 2021.
Stutter start for the VW Golf
At the beginning of the year, the VW Group received too few electronic components. Golf production in Wolfsburg in particular will suffer from the shortage of chips.
(Photo: dpa)
With the hope that the issue will be resolved in the second quarter? Indeed, that is the hope. Since it is a global problem that extends beyond the automotive industry, no one can predict with absolute certainty that we will then have a complete normalization of the situation.
Are individual sales regions in the world suffering more from the expected golf bottleneck? One of the ways in which the available parts are distributed is so that the economic damage remains as small as possible. However, it is only possible to make shifts to a limited extent.
Will you try to catch up on the lost sales from the first quarter later this year? We always try to do that. The current situation can easily be compared to a soccer game: We fall behind early – in the first quarter – and will then push for an equalization. We hope that we can do this quickly. But of course that will depend on global economic development and the corona situation. One thing is certain: we will fight for every car in 2021.
“We are prepared for Brexit”
Did the recent agreement between the EU and Great Britain on a trade agreement prevent the worst from happening in Brexit? The agreement reached naturally creates planning security for Volkswagen. Even if we still have to examine the exact effects on our business in detail, it is already clear that the negotiated agreement is good and important message, especially for our UK customers.
Was Volkswagen badly affected by the corona-related lockdown in Great Britain at the end of December? Have you still been able to deliver cars to the island? Basically, in Great Britain it is about having a good supply so that you can react to any situation. We were prepared and could therefore continue to deliver. We bring our cars to the island by ship – not to Dover, but to less frequented ports. We are on course and hope to have achieved our annual targets there too.
The holidays helped? Of course. Our entire logistics over the past few weeks has been geared towards getting most of the cars to the British Isles well in advance of Christmas. In the last week of December we still had a few vehicles to cross the English Channel.
You only switched from Porsche to Volkswagen in late summer. Isn’t the sports car business a little easier than that with mass-produced cars, especially in times of Corona? The premium segment suffers less in the corona crisis, just looking at the sales figures is enough.
“The number of orders is high for electric cars”
How did the difficult Corona year 2020 come to an end for the VW brand? Of course, we will come out below the previous year’s result, there is no question about that. But there is also good news: In November we had an order backlog that was twelve percent above the previous year. We are also maintaining our market share or are easily gaining it. The high order backlog shows that we are on the right track with our electrical strategy. Because the number of orders is particularly high for electric cars. There is very high demand for plug-in hybrids: every third Golf ordered is a hybrid, and every fourth for the Passat. That makes us optimistic, especially for 2021. For the new year we have decided to expand our global market share by 0.5 percentage points.
With so many electrical orders, you also benefit from public funding, which is not only available in Germany, for which we are very grateful. The transformation would be difficult to get off the ground if everyone didn’t really contribute. As a manufacturer, we are initially investing billions in new products with electric drives – the Volkswagen brand alone will invest eleven billion between 2020 and 2024. If the state also helps convince our customers of the new products, then that’s a wonderful thing. If it is also possible to build up the charging infrastructure with a lot of momentum, then everyone will be served.
You mentioned that the plug-in hybrids in particular are in greater demand. There are probably a lot of company cars there, right? Of course, the lower monetary benefit that a company car driver has to pay tax on helps. Two years ago, the proportion of electricity in our vehicles in the fleet market was just under two percent. For 2020 we’re going to be around 20 percent. That means: every fifth Volkswagen is fully or partially electric.
Has there also been a change in the behavior of companies that order more e-vehicles because they want to become climate neutral themselves? It depends on the company. In the energy sector, for example, there are companies that see this issue. There is great interest in electric vehicles in order to make progress on our own path towards climate neutrality.
“The Green Deal accelerates our transformation”
The all-electric ID models are still mostly bought by private customers? But there are also more and more companies that no longer just order plug-in hybrids, but also fully electric vehicles. There are already companies who want to order 250 ID.3 in one fell swoop. In the new year we will definitely increase the number of fully electric cars produced.
Wouldn’t you have been able to sell more e-cars in 2020 if it hadn’t been for the known software problems? Corona caused us huge problems for almost the entire year. That is why I would be much more likely to say that we and our dealers made it through the end of the year with e-car sales. In 2020 we had more than 55,000 orders for the ID.3, of which 28,000 had already been delivered to customers by mid-December. A little more would probably have been possible if the impacts from Corona had not occurred. The Volkswagen Passenger Cars brand complies with the carbon dioxide fleet requirements, which is ultimately an important result.
In the new year, the EU will tighten the CO2 requirements a little more. What does this mean for the sales targets for electric cars? That’s true, but it was announced a long time ago. The EU’s new “Green Deal” is the much more important event that will require greater production of electric cars in the next few years. The “Green Deal” accelerates our transformation towards electromobility once again. In the future, we will have to produce around 300,000 additional battery-powered vehicles every year. With the planned ID production, we will easily cope with the EU requirements for 2021, which were tightened some time ago.
Does that mean that the VW plant in Zwickau will reach full capacity in 2021 with a good 300,000 produced e-cars? That is clearly the plan. After the sales start of the ID.3 in late summer, the ID.4 will be added in 2021, our first electric SUV. Later in the year there will be a sporty coupé variant of this SUV, the ID.5. Now we have to continue to make sure that the quality of the cars is at the high level that one expects from a Volkswagen. That is why there will be further improvements in the software.
“Over the air” software updates will be possible for the first time in the new year for Volkswagen ID models? We want to start with the ID.4, probably in the second half of the year. Our developers are working flat out. The new Golf is not yet included, we’re starting with the fully electric models.
“A completely new business area is emerging”
Will it be an important day for Volkswagen when you can offer an update over the air? Finally catching up with Tesla? Absolutely, because the potential of “over-the-air” updates is huge. In the future, customers can simply buy additional functions for a few days or permanently – for example before long journeys or vacation trips. Examples are greater ranges or higher speeds. Or after taking over a vehicle, a new owner buys additional driver assistance systems. A completely new business area is emerging for us. So far, Volkswagen has generated most of its revenue from selling its cars. After that it is more or less over, apart from the spare parts and the service. With the sale of functions “on demand”, the time span in which a manufacturer accompanies the ongoing operation of a car becomes much longer.
Vita Klaus Zellmer
You emphasize the strong expansion of electric mobility. Does that mean that the number of combustion engines will be reduced in the same breath? For the period 2025 to 2030, I can say that the number of battery-powered cars will continue to increase. With the highly efficient combustion engines – which we are continuously developing – it goes down very easily. With the total number of all models, we will then be slightly higher than today’s offer.
Do your dealers and workshops have to prepare even more for the switch to electromobility? I think that all in all they are well prepared and very competent. Our trading partners, for example around 6,000 to 7,000 employees in Germany, are also a reflection of society. Not all were immediately equally enthusiastic about the new forms of propulsion. Overall, however, we are very satisfied with our retail partners. The good sales figures also speak for themselves. Nonetheless, we as manufacturers still have to and will do a little bit of persuading individuals – at the latest with the next major training course on the ID.4.
“We have to get out of the diesel crisis stronger”
Is the VW brand still suffering from the diesel affair? Have you been relieved of the need to transform into a major new electrical supplier? Since the emissions scandal was discovered in 2015, we have of course been given critical support. We have to endure this and show credibly that Volkswagen is consistently pursuing a new long-term strategy that is second to none. Namely, that we want to be climate neutral by 2050 and that we will comply with the Paris Climate Agreement. We may need to make these company’s efforts more widely known.
The image change from bad to good will still take? I think the company has been making enormous efforts since 2015. But changing the perception of a company is not a sprint, but rather a marathon. The new electric cars are already an important building block. In addition, we have to change production and logistics as well as the entire value chain to be climate-neutral. We take responsibility for society and make our own contribution. Volkswagen has a good and convincing plan. This “way to zero” is also extremely attractive for me personally.
How do you want to make progress with the VW brand in the short term in 2021? Our goal must be for us to get out of the diesel crisis stronger than we went in. This is what the Volkswagen brand is now doing. Our job is to ensure the democratization of sustainable mobility and to become the most desirable brand in this field. We want to be the “best choice” for our customers, that is the core of the Volkswagen brand. Mr. Zellmer, thank you very much for the interview.
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