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Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Date:03-13 14:56 Source:autochina.comnews.cn Authour:He Lun

 Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

In 2016, despite being caught in the shock of the emissions scandal, Volkswagen AG still defeated its rival Toyota in sales. With total sales of 10.30 million vehicles, Volkswagen led the overall sales ranking. Even after the deduction of special project costs amounting to 7.52 billion Euros, Volkswagen still made a net profit of 5.4 billion Euros, which was very surprising. Last October, Matthias Müller, CEO of Volkswagen AG, said in an interview with China Auto, “People are also wondering how successful Volkswagen AG could have been if there had been no such scandal. This question is well worth discussing.” In an exclusive interview with China Auto at the Geneva Auto Show, together with Prof. Dr. Jochem Heizman, CEO of Volkswagen Group China, Mr. Müller gave a preliminary answer to the question and talked about some hot topics - SAIC-Audi cooperation, NEVs, the internet of vehicles, and future mobility solutions.

Volkswagen will gradually become a Chinese company

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

 Müller: At present, the Chinese market is becoming more and more important to Volkswagen AG. In this regard, I would like to express some of my thoughts: First, we attach greater importance to the Chinese market in decision making, and many decisions are now made directly by Prof. Dr. Heizmann, CEO of Volkswagen Group (China). Second, I believe the Chinese market will see rapid development in the future because China has already evolved from a manufacturing base into an incubator for innovative technologies. In the future, more and more products “created in China” will benefit this country and the global market beyond.

We did achieve some good results in China in 2016, but we were also in the process of learning. I believe Volkswagen AG will gradually become a Chinese company.

China is not only a huge car market, but also a global leader in technology. For example, in terms of digitalization and new mobility services, China has become a benchmark in the global automotive industry. Volkswagen is also committed to developing and creating people-oriented intelligent solutions in areas related to digitalization, autonomous driving and mobility services.

In terms of new strategic partnerships, we have now joined hands with Jianghuai Automotive Company, Shouqi and Didi Chuxing, who will help us achieve more in BEV and mobility services.

Three things keep Volkswagen developing steadily

2016 Financial Statement of Volkswagen AG

Item

2016 (10*8 euro)

Growth %

Total sales revenue

2172.67

19%

Operating profit before special project

146.23

14%

Special project

-75.2

55.5%

Operating profit

71.03

 

Profit before tax

72.92

 

Profit after tax

53.79

 

 

 

Müller: First of all, the good performance we achieved last year was the result of hard work by our 600,000 staff in Volkswagen AG, who kept on working without being affected by the emissions crisis. Last year was really difficult for Volkswagen because we had to do the following three things at the same time.

First, we had to look at the past, the diesel emission crisis in particular, and had to properly deal with the consequences.

Second, we had to figure out how to achieve better results based on the excellent performance in the previous year.

And finally, we had to get prepared for the upcoming digital revolution and lay a good foundation for future development.  

The SAIC-Audi long-term strategic cooperation will continue

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Müller: Regarding the problem with Audi dealers, as partners, we should sit down and work out an overall solution together. On the corporate level, Prof. Dr. Heizmann is also taking the lead in pushing this matter forward. Hopefully we can solve this problem in the foreseeable future.

Prof. Dr. Heizmann: We are all very conscious of the importance of the Audi dealer problem. Now we are working with FAW-VW, trying to work this thing out as soon as possible. On the one hand, we should direct our attention to the increasing the profits of these dealers in the short run; and on the other hand, we should work with dealers to figure out a reasonable long-term business model for the future. Only by doing both of these, can we gain trust in each other again.   

In the long run, there is still great potential for the Chinese high-end and luxury car market. In this context, the cooperation between Audi and SAIC will be a long-term future-focused strategic cooperation. This means that as well as strengthening the existing cooperation, Audi is also seeking new opportunities. .

Our immediate priority is to find a satisfactory solution to this dealer problem, which is also our first step. The next step will be the long-term strategic cooperation between SAIC and Audi, on which we will not change our mind. We have to achieve our goals step by step.

Volkswagen is planning to develop a new electric vehicle modular platform with SAIC

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Müller: SAIC has great strength in the internet of vehicles. On this issue, we will communicate with SAIC on a regular basis. Speaking of the future cooperation with SAIC, there are a lot of things we would like to try, whether in NEV or in new fields of business.

Prof. Dr. Heizmann: In the future, Volkswagen cars must be 100% interconnected, which is our long-term goal. As for the mid-term goal, currently we are communicating with SAIC on establishing a new electric vehicle modular platform. In addition, we are also discussing with the JV on how to effectively push forward the work related to the internet of vehicles and interconnection.

Müller: Volkswagen will still conduct R&D into ICE and diesel vehicles in the future, but at the same time it will reinforce its strengths in three core technologies – autonomous driving, artificial intelligence, and battery technology.   

At the moment we are focusing more on the integration of resources within the group, like the integration of the future center, the R&D center and innovation work. At the same time we have to work out a complete mobility system for the future, including an eco-mobility system and future mobility plans.   

MOIA, the 13th brand of Volkswagen, is a mobility service company. It will start a pilot project in Hamburg in 2018. In China, if pilot work such as an eco-mobility project can be carried out in some area in the future, whether by Volkswagen, or by SAIC-VW, or by FAW-VW, it will be of great significance to the future development of the whole group.

Electric vehicles will probably make up 50% of the market in China by 2030

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Müller: I believe that by 2030 electric cars will make up 30-40% of the global market, and in China the percentage will probably be about 50-60%.

This will depend on two things. The first is policy. If the policy specifies the proportion of NEVs, then OEMs will have to follow this requirement. The other factor is user acceptance, which involves vehicle range, cost, charging speed, and the network of charging infrastructure.

One other thing to note is that with higher requirements for ICE and diesel vehicles, technologies will have to be further upgraded, and costs will increase accordingly. Maybe five or six years from now, the cost or price of an electric vehicle will be almost the same as that of a diesel vehicle.

As a global corporation, Volkswagen will stick to free trade

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Müller: We are always watching policy developments and economic trends in China and in the rest of the world. Volkswagen AG is a global company that firmly supports free trade. Volkswagen has set up production bases in many parts of the world, and I think it will continue to do this in the future.

China is now promoting the One Belt, One Road initiative. From this, we can clearly see the Chinese government’s purpose and its commitment to implementing this policy. From the perspective of Volkswagen, we hope to actively participate in the market in different areas through a variety of means. We will not certainly focus on markets in China and the US, but we will also pay careful attention to the huge growth potential of the markets in South America, the Middle East, India, Russia and other regions.

Volkswagen is exploring fuel cell, CNG and other technological solutions

Müller: SAIC-Audi Cooperation to Continue and Volkswagen to Become a Chinese Company

Müller: Currently electric vehicles mainly rely on coal-based electricity. Germany abandoned nuclear power many years ago, so German cars also have this problem.

Theoretically, the fuel cell solution can provide a clean source of energy, but it is still not clear when this solution will be widely applied or how much it will cost. Currently, Audi is taking the lead in developing fuel-cell vehicles, and they already have a prototype now. In the future, I will keep a close eye on how this technology progresses. Plug-in hybrids are a transitional solution, which Volkswagen is also working on. There is another technology called CNG (compressed natural gas), which can theoretically reduce 80% carbon dioxide emissions by 80%. Right now the group or the brand is also thinking about doing some R&D on this technology. 


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