By Judy Battista
Volkswagen
Volkswagen CEO Herbert Diess believes that his company’s emissions cheating scandal couldn’t have happened at a better time.
And Diess now has the fuel economy policies to make sure that the world’s top-selling electric vehicle will last a long time and perform reliably over time.
Diess, speaking to The Washington Post’s editorial board on Thursday, was eager to share his views on what brought the German automaker to the brink of bankruptcy in 2015, and how it has positioned itself for the future and its need to build customer loyalty.
The executive alluded to a tone-deafness for the auto industry that had been in evidence for decades and that convinced hundreds of dealerships that the brands they sold Volkswagen brands, like Audis and Beetles, were trustworthy, reliable, and clean.
“The business became like a game of house. We had to develop a brand portfolio, we had to sell cars, which was what we had always done,” Diess recalled. “Then the business came to a sudden halt. And that was the most important thing – that we had to start again from zero.”
That required a complete focus on the passenger car market. When it comes to cleaning up the cars that owners were actually driving, they seemed to be doing the proper job.
But Diess said that was not the case.
“We found that many of our customers are very aware about cars that have a lot of weight and are very heavy on the fuel tank,” he said.
That was true for Volkswagen vehicles, of course, but also, Diess said, for many other brands on the market. His point was that high fuel consumption and handling weren’t factors at the high end. “But that’s what happens with the customer in general.”
Diess’s inspiration for making fuel economy a focus came from the same sort of conversations that companies need to have to survive in today’s economy, he said.
“When we were starting to sell cars we were talking about energy,” he said. “It was only in the 1970s that people started really thinking about how you can reduce a lot of the dependence on oil. Then we looked at climate change and the need to reduce the CO2 emissions. It’s a good moment.”
The automaker has made dramatic changes and has set a new standard for the industry’s future. A year ago, Diess signed the U.S. Zero Emission Vehicle Policy, which says Volkswagen is committed to investing $11 billion in zero-emission vehicles. The automaker has also set a goal to be selling 1 million of its electrified vehicles annually by 2025.
“We really want to give customers the sense that we are helping them, and therefore it’s really important that we take the important decisions for the long term,” Diess said.
Despite being an autobahn-hardened car enthusiast and well-known for his knowledge of the industry and longstanding relationships with top managers across the globe, Diess said it took years for his persona to change in some companies.
“I can say with passion that as we were talking, people began to recognize the fact that they couldn’t be as decisive or strong as they wanted to be because we had built relationships with so many people,” he said. “I understand what you are saying – I was one of them.”
He was accustomed to working in internal settings in countries with a wealth of highly experienced decision-makers. “I was very good at that,” he said.
But in the auto industry, he had to cultivate relationships with leaders around the world, both in Germany and in the U.S. “It’s about to be a country in which everyone is eager to communicate and seek knowledge and wants to work with people of the same background,” he said.