Herbert Diess speaks candidly on the issues facing the German automaker.
Despite Volkswagen's electric ambitions, the company hasn't had the easiest time over the past decade. With dieselgate now a faint memory, the company has been plagued by a succession of issues not helped by Russia's invasion of Ukraine. CEO Herbert Diess has previously expressed his concerns about the future of the auto industry but has now spoken openly about other problems.
In an interview with 60 Minutes, Diess touched on several difficulties such as competition from Tesla, the electrified future, unrest in Ukraine, and, importantly, VW's positioning in the United States. Asked why the brand hasn't done quite as well in the US (compared to other markets), the CEO admits the brand has lost ground.
"I think we didn't take the US customer seriously enough. We tried to sell the European product here in the US." Diess states it is imperative for the brand to make a come back in the States. "We have to become relevant in the US. And we are in the right way."
The ID.4 electric SUV is part of the plan to get Americans to fall in love with the brand again. Judging by the sales figures, it seems to be succeeding. Hoping to pressure Russia's economy via sanctions, Volkswagen and several other automakers have suspended production at local plants.
While Diess said pulling out of Russia was the right thing to do, it wasn't an easy decision to make. "It is quite a hard decision for us because we have about 7,000 [loyal] people working for us in Russia. We have three plants there." He added, "We have [many loyal] customers, so it's [a]very difficult decision. But strong sanctions are probably the only measures we have currently because what we see in Europe is an appalling war."
Another concern for VW is the potential for Vladimir Putin to seize factories. "It's very difficult to understand the situation. I think it will depend a lot on how far are we getting back to negotiations."
CEO Diess doesn't hide the fact that he is friends with Elon Musk, the CEO of a fierce rival automaker. While he admits that Tesla is in the lead, he believes it's healthy to have a new competitor. However, those serving under Diess don't seem to agree with his views on Tesla, critiquing him for talking about the company. "You're right. They don't like it," he confessed.
When asked about VW's electrification plans, Diess says the future poses a big challenge for the brand. "Historically, there haven't been too many cases where the successful companies in the old world could demonstrate that they are still successful in the new world." It's not as easy as changing the design and drivetrains, either - new competitors pose the biggest threat.
"It's really the new competitors which are especially challenging for us...coming from [a] software background, battery background...Apple [is] said to [enter] at some stage, no? Those are probably the competitors we have to take most seriously."