VW places electromobility, connectivity at the center of its future strategy

November 22, 2016 // By Christoph Hammerschmidt
After the Dieselgate scandal and amidst increasing pressure to modernize its overall strategy, Volkswagen’s Brand CEO Herbert Diess has introduced the “Transform 2025+” program describing the company’s course for the next decade. The strategy puts electromobility, digitization and the connected car into the center of its activities.

The realignment will take place in three phases. In phase 1, up to the year 2020, Volkswagen plans to thoroughly restructure its core business with particular focus on the processes along the value chain. In this context, the company also will acquire new competencies. Though Diess did not elaborate, it is generally believed that these competencies will include web-based business models such as car sharing and the digitization of the sales process.

In the second phase, from 2020 through 2025, Volkswagen plans to capture the pole position in the electromobility market – a rather ambitious goal, given the company’s current position in the world of electric vehicles and the lackluster demand for its e-cars in Europe, in particular in Germany. However, the plans of China as one of Volkswagen’s largest markets to introduce a binding quota for electric vehicles could help Volkswagen to reach this goal because it would foster scalable mass production. “We intend to play a key role in the breakthrough of the electric car”, Diess said. “We are not aiming for niche products but for the heart of the automobile market,” adding that VW plans to sell 1 million electric vehicles per year.

In phase 2 the strategy also calls for additional revenue streams through novel mobility services. Again, the objective in this segment is ambitious: Volkswagen plans to achieve a leading role in the world of innovative mobility models by 2030, Diess said.

Digitization will be another battlefield where VW intends to play a major role. According to Diess, the company will develop its own digital platform to offer a comprehensive range of services and to reinforce customer loyalty. Again, Diess is aiming at nothing less than the “leading digital ecosystem in the entire automotive industry”, with more than 80 million active users worldwide. From this business alone, Diess expects a revenue stream of 1 billion euros per year.

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