Europe’s largest car manufacturer Volkswagen continues to focus on globalization despite the increasing pressure on world trade. “We have this discussion of a new block formation here,” said VW boss Herbert Diess (63) on Wednesday on the sidelines of the annual conference of the World Economic Forum in Davos in front of journalists. Both VW as a global car supplier and Germany depend on free trade.
“I think we shouldn’t rely too much on self-sufficiency,” added Diess in view of the debate about the lack of electronic chips and expensive raw materials, which after the outbreak of the Covid pandemic and now after the war in the Ukraine slow down the global economy.
“Nations and large blocks that are becoming self-sufficient are a great risk for me in a world that isolating itself,” said Diess. A dependency on certain supplier countries such as Taiwan for semiconductors is currently perceived negatively, but it also helps in certain aspects. “If that were no longer the case, would Taiwan be safer or less safe? Less safe in my opinion,” Diess said.
Diess: Withdrawing from Xinjiang would have negative consequences for the region
The group has also often been asked to get out of the plant in the Chinese province of Xinjiang. “It would be easy for us because compared to ours Chinabusiness is economically negligible,” said Diess. However, it is an advantage to be present there. According to human rights activists, the Uyghur minority in Beijing is being systematically suppressed in the northwestern region of China. A withdrawal by VW would have predominantly negative consequences for the region, said Diess.
In China, where the group sells a large part of its cars and is the market leader, Diess currently considers the situation complicated due to the regional corona lockdowns. “But we see some light,” said the manager. Overall, China remains the car market with the greatest growth opportunities. In general, the tension in the supply chains in the car business should ease noticeably this year – but the case is different for commercial vehicles.