Volkswagen’s new boss faces the connected car project

Volkswagen’s future boss, Oliver Blume, must complete several major projects, starting with calming the climate internally after the reign of his fiery predecessor Herbert Diess, but also listing Porsche on the stock market and gearing up for battle.

“The biggest challenge is clearly software,” sums up Matthias Schmidt, sector analyst. In other words: the transformation of cars into computers on wheels, the second big step besides electrification

Current CEO Herbert Diess has already launched the group with 12 brands in an electric shift unparalleled in the world of “old” manufacturers – well equipped to become the market leader in 2025.

Photo: AFP

But to catch up with Tesla, listed as a model, the programming of vehicles turns out to be more complex.

Difficulties at the Cariad subsidiary responsible for developing these systems have delayed several flagship projects. They triggered the end of the mandate of Herbert Diess, who intended to transform Volkswagen into a technology giant.

The ambitious goal: to program as much code as possible in-house, without depending on software bought elsewhere, thus keeping track of the nerve center of the car of the future and the economic benefits that come from it.

Oliver Blume “must decide whether to continue following the Herbert Diess project […] to do it in-house or if it makes a major strategic change “by relying on suppliers” by living with the consequences of seeing those sources of profit disappear,” Mr Schmidt notes to AFP.

“The plan to make everything central will probably be redesigned,” says expert Ferdinand Dudenhöffer.

harmful confrontation

Another project: repairing the stormy management-union relationship that has crippled Mr. Diess for months.

Photo: Frederic Mercier

The Austrian’s divisive personality and the accumulation of internal conflicts are the main underlying reason for the hasty departure, confirms a source in the group.

The announcement was surprising for the timing. But the future of the head of VW already seemed compromised for a while. Some of its powers had already been reduced earlier.

Sir. Diess “had enemies” and “was neither loved by politicians nor by the co-operation council”, observes Mr. Dudenhöffer.

Signs of rejection: The board unanimously approved his departure.

To turn the page on the “dieselgate” scandal with rigged engines and launch electrification, “it was very important to go towards confrontation because the group had to be transformed”, notes Mr Dudenhöffer.

Photo: Volkswagen

But now “it’s a matter of applying” the decisions.

“That’s why the confrontation is harmful”, assesses the expert. Even if, with Mr Diess, “a breath of fresh air disappears in Wolfsburg”, Mr Diess has had the “courage to try”, replies Mr Schmidt.

Close to the Porsche-Piech families who control the group, Oliver Blume – unlike Mr. Diess, who arrived from BMW – a pure product of Volkswagen: “probably not what Volkswagen needs at the moment”, carves out the analyst.

Continuity

According to Mr Dudenhöffer, who is known to be more “collaborative”, Mr Blume will take over the helm of the German giant on 1 September.

“He will continue the great strategic projects of Herbert Diess”, assesses the expert, in particular investments in the manufacture of electric battery cells, the construction of a new factory near the historic headquarters and the development of mobility services with Europcar. .

Photo: AFP

Signs of some continuity: CFO Arno Antlitz will also have access to the functions of COO.

According to a source close to the board, Herbert Diess will continue to work for Volkswagen until the end of his contract in 2025 – as an “advisor”.

To keep the leadership of Porsche for the time being, Oliver Blume will finally have to complete the initial public offering (IPO) of the racing car subsidiary, scheduled for the 4th quarter in an already cool market context.

Photo: Porsche AG

“I think he will stay with Porsche” until the IPO, notes Mr Schmidt, before “focusing on managing the group and its many tentacles”.

The future boss “will be judged on VW’s success in China” and in the US, two key markets where VW has weakened, Mr Dudenhöffer recalls.

In video: Antoine Joubert presents the Volkswagen ID.4

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