Herbert Diess received the 2018 Autocar Editor’s AwardWe communicate to the individuals’s automobile’s individuals particular person to listen to his ideas on diesel, EVs, basic vehicles and VW’s future
Herbert Diess breaks the foundations. We’re about to spend 60 minutes of his useful time speaking in his workplace – the hour has been strictly agreed along with his minders – and given the exactness of the interval, plus the implied challenges and strictures of his large job as head of the Volkswagen Group, I’m anticipating him to be a critical, pushed, time-poor and considerably humourless particular person. His predecessor, Matthias Mueller, good man although he was, was somewhat like that.
So it’s fairly a shock to seek out that inside a few minutes, Diess and I are chatting cheerily concerning the plus factors of the basic Triumph TR6, a automobile he says he owned, cherished and bought for too little cash. He additionally had a number of Minis and Beetles and nonetheless has a small assortment of “non-group vehicles I don’t discuss” that simply occurs to incorporate a Land Rover Defender. Inside seconds, I’ve gleaned that Diess is a correct automobile fanatic. In a mind-flash I bear in mind him from his 4 “very joyful” years at Rover (1999 to 2003) the place he was instrumental in launching the brand new Mini. We’re going to be okay.
We’ve been attempting to organise this interview for a 12 months, not least as a result of Diess – who moved from BMW in 2015 to run VW simply earlier than its troubles grew to become public – received certainly one of our 2018 awards for brilliantly progressing a marque hamstrung by Dieselgate in order that it hardly misplaced gross sales or market place. His non-arrival finally 12 months’s awards occasion and restricted availability since is the results of his speedy promotion to VW’s greatest job.
Diess works in a cushty however unostentatious suite of places of work atop a monolithic constructing in Wolfsburg, searching on one of many world’s largest car-building operations. He’s a barely constructed man of 60 whose body betrays no proof of self-indulgence. I’d put him down as a golfer or tennis participant, if he ever will get time. He smiles simply, speaks good colloquial English and has an Anglo-Saxon liking for conversational informality.
I’ve heard so much about Diess’s popularity for decisiveness, so I ask a couple of assembly early in his VW time for which he’s well-known, simply after the diesel factor broke. At this gathering, a plan for the daring, electric-specific MEB platform, which now appears to be like ever extra more likely to win VW a big international benefit in electrification, was raised, mentioned, formulated and agreed.
“It was quickly after I arrived, a couple of fortnight after diesel occurred,” he says. “I known as the crew collectively for a two-day workshop and collectively we created the MEB toolkit.
“We have been in a really particular scenario. We have been sturdy in China and China is big in electrical vehicles. It appeared potential for us to be the primary main firm to create a selected electrical structure and use it throughout all our marques. Most individuals have been utilizing present platforms for his or her electrical vehicles as a result of that wanted much less funding. It was an opportunity to overhaul others.”
Regardless of the power of this concept, Diess refuses to speak up its prospects as a result of it has but to ship. “We hope it’ll work,” he says. “At current, we’re nonetheless promoting electrified fashions based mostly on our MQB platform, however from subsequent 12 months, we might have a bonus.”
Future profitable designs may have what Diess calls “chocolate bar” chassis, identified to others as ‘skateboards’ – with flat flooring, lengthy wheelbases and loads of unimpeded house for batteries between the axles. Trip heights will carry vehicles by 100mm to 150mm, he says, though engineers at Porsche and Audi are already at work reducing that down. Regardless of the truth of higher-riding vehicles, Diess believes basic ‘tall’ SUVs received’t essentially keep reputation. Taming aerodynamic drag is changing into very important to protect battery vary. It’s one motive, Diess believes, why Tesla hasn’t bought almost as many Mannequin X SUVs as different fashions.
What’s the form of the longer term, I ask. Will electrified and standard vehicles simply struggle it out? Will automobile makers attempt to drive the market?
There’ll be no forcing, Diess insists. Progress will probably be variable and rely closely on authorities incentives. “Tesla couldn’t have made its approach with out the $7500-a-car US authorities incentive,” says Diess, “or in Norway with out their tax credit. However finally, the corporate that may make electrical vehicles with constructive margins will win. That’s the place I feel we have now some probabilities…”
Speaking future gross sales, Diess estimates that by 2021, between 5% and 6% of latest European vehicles will probably be electrical. That ought to develop to 20% by 2025, and between 30% and 40% by 2030. It’s an infinite change. How does it really feel, I ask, realizing you’ll quickly be shutting engine vegetation ceaselessly? “It’s true that within the subsequent 10 years, we’re going to wish to shut about half our engine and gearbox vegetation,” he says, “however we’ll ramp up battery manufacturing enormously to compensate. We consider we’re lined for battery cell manufacturing till 2023 or 2024, however we are going to nonetheless want extra capability. That’s the large problem. We’ve simply launched the Audi E-tron and the constraint on supply is the battery. We are going to see this for fairly a while.”
If engine vegetation are going, when will diesels disappear for good? “Not but,” the chairman solutions fastidiously. “They’re nonetheless the perfect reply for greater vehicles that journey lengthy distances at increased speeds. They’re additionally probably the most economical, cleanest and finest for CO2. Bear in mind, even in 2025, 80% of latest vehicles may have combustion engines…”
Like all his current predecessors, Diess started speaking about reorganising the VW Group inside weeks of taking the large job. Is that this, I ponder, as a result of Porsche and Audi seem to make all the cash? Once more, the cautious reply.
“It’s very troublesome to take a look at Porsche or Audi on their very own,” he explains. “There’s large interdependence as of late. Many Porsches are made in VW vegetation. Different Porsches use Audi platforms. Audi makes its 17% to 18% margin with the assistance of the MQB platform, which is utilized in round 400,000 of its vehicles. And that platform helps about eight million of our whole output, so the synergies are monumental.”
Is dimension vital? In the course of the pre-diesel days of the Martin Winterkorn period, the VW Group surprised everybody by quickly bumping Toyota off prime spot because the world’s greatest automobile maker, a place it nonetheless narrowly holds. Does the goal matter? Predictably, the reply is complicated.
“I feel in lots of locations we’re large enough,” the chairman replies. “After all, there are markets the place we should enhance. We’ve about 19% in China and 20% in Europe, however we’re limping alongside at four% within the US. That ought to enhance.
“Having mentioned that, I do consider scale issues, and within the subsequent decade, it’ll matter much more. In some methods, standard economies are smaller in electrical vehicles as a result of materials prices are so large – about twice the price of standard vehicles – and the supplies themselves are topic to market fluctuations. However a automobile is quickly changing into a software program product, a microprocessor, and in that recreation, dimension actually issues. You will have a one-time price, a one-time expenditure unfold over many merchandise. However we expect we’re large enough to play that recreation, so we actually don’t must develop any extra.”
Profession in short
Dr Herbert Diess, 60, Volkswagen Group chairman, was born in Austria and educated at Munich Technical College, the place he attained a PhD in meeting automation in 1989 whereas working as an educational. He then joined Robert Bosch and moved to a Bosch plant in Spain as technical director earlier than becoming a member of BMW in 1996.
In 1999, he moved to the UK as a part of BMW’s Rover administration, concentrating on the launch of the brand new Mini, earlier than returning to go BMW’s motorbike division from 2003. He was promoted to the BMW board in 2007 and took a number of roles in buying and growth earlier than transferring to go the VW marque in 2015.
“I used to be reluctant to maneuver,” he says, “as a result of I used to be very joyful in my BMW job. However I used to be match and wholesome, I’ve all the time had a particular regard for Volkswagen, and I realised I may work longer at VW than BMW, the place retirement is obligatory at 60. So I made the transfer and it has been profitable – up to now…”
China’s affect on design: “We’re working a 14% market share and our nearest European competitor has 6%, so I feel we needs to be cautious about altering the look of our vehicles. When you have got a robust market place, you have got an opportunity to affect individuals.
Bentley’s progress: “I’m very joyful and optimistic. They’ve made an enormous step ahead in profitability. They’ve a fairly excessive burden of depreciation as a result of they’ve spent a lot on new fashions, however we have now an excellent and devoted crew working at Crewe and the corporate has numerous potential.”
Dieselgate: “I feel will probably be round for a while. We nonetheless have courtroom circumstances within the UK, in Australia, throughout. However I consider the worst is behind us. The largest factor was within the US, the place we purchased many vehicles again and stuck many others. However it’ll nonetheless take years.”
Turning into chairman: “I knew it was some of the difficult jobs within the business, due to the adjustments coming and the way they’d have an effect on our manufacturers. However I used to be properly ready. I’d executed numerous assorted jobs over 30 years. And I really like Volkswagen. So I assumed: why not?”
British vehicles he’s owned: “I owned many, some with flaws however some that have been actually nice. I had three or 4 Minis, together with an Innocenti. I nonetheless drive heaps vehicles. The automotive enterprise is completely different. Many colleagues are actually into vehicles. It’s one of many brighter sides of the job.”
Sourcing battery supplies: “Cobalt is probably the most conflicted. Automobiles will double the demand, however the proportion in batteries is coming down. Tesla’s are nearly cobalt free. Nickel is everywhere. Lithium may be an issue, however we’re discovering methods to get well it for re-use.”
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