Steffen Reiche
President of Volkswagen de México
View from the Top

Transitioning Toward the Car of the Future

Sat, 09/01/2018 - 09:48

Q: What are your priorities as the new head of Volkswagen in Mexico?
A: My predecessor Andreas Hinrichs did a great job. Under his leadership, the Puebla Plant reached several milestones and consolidated its position as the second-largest Volkswagen facility outside of Europe. Since I took over, my priority has been to acquire a deep knowledge of Volkswagen’s plants in Puebla and Guanajuato to understand their processes, as well as the development of the Volkswagen Group brands in Mexico. My approach is to strengthen what has been done and to reinforce those things that will make us fit for the future of mobility.
Q: How are you pairing the power and performance that characterize Volkswagen’s vehicles with the ideals of fuel economy and environmental sustainability?
A: A car’s environmental impact is at its greatest when it is on the road, which underlines the importance of considering the use phase of the vehicle’s life cycle. Volkswagen builds cars that drive as efficiently as possible, enabling drivers to enjoy eco-compatible mobility. Similarly, the company develops its products and services in the most environmentally compatible way possible. Doing so, we consider not only the production and use phases, but also raw-material sourcing, supplier processes and the end-of-life recycling process once the vehicle is no longer on the road.
Q: The company wants to be the No. 1 player in electric mobility by 2025. How will you accomplish this?
A: From 2017 to 2022, Volkswagen will invest over €22 billion (US$25.1 billion) in its manufacturing sites around the world. These funds will be destined to support the expansion of modular production, promote our model campaigns and drive forward the development of electric mobility. In 2020, Volkswagen will produce 100,000 electric vehicles. The new vehicle generation will be launched almost simultaneously in Europe, China and the US. At least 1 million electric cars are planned for 2025.
Q: What is Volkswagen’s vision for the car of the future, in terms of connectivity and autonomy?
A: For the third time in a row, Volkswagen has been named “Most Innovative High-volume Brand” by the independent research institute Center of Automotive Management (CAM). The brand also took top place in the “Alternative Drives,” “Autonomous Driving and Safety” and “Conventional Drives” categories. CAM bestows the awards together with auditing firm PricewaterhouseCoopers. The jury based its decision to declare Volkswagen the most innovative high-volume brand on 62 individual innovations the company developed in 2017.
The Volkswagen brand is strengthening its model offering with very attractive products. This year, for example, the brand launched the totally-new Jetta, a compact sedan that is considered one of the most popular cars in the Mexican market. We also delivered Teramont, a medium-sized SUV that will be our second model competing in the growing SUV segment along with NuevoTiguan. Both of these models will reinforce our presence in this important segment.
Q: What was behind the drop in sales in FY17 and 1Q18 and what strategies is the company implementing to regain its position in the market?
A: The Mexican market experienced expansive growth until 2017, motivated by the arrival of new competitors and attractive financing plans. Nevertheless, some variables have changed over the past 12 months. The NAFTA renegotiation, uncertainty about the new rules of commerce in North America, exchange-rate volatility and a general increase in prices of new vehicles and credits were among the main disruptors that prevented the company from reaching growth. However, the Volkswagen Group is focusing on a new and attractive model offensive that covers practically all segments to counter these negative factors.