The new boss of Volkswagen faces the big construction site for the connected car

Volkswagen’s future boss, Oliver Blume, will have to implement several major projects, starting with calming the climate internally after the reign of his fiery predecessor Herbert Diess, but also introducing

Porsche on the stock exchange and preparing for the software battle. “The biggest challenge is clearly software,” sums up Matthias Schmidt, a German analyst in the sector.

In other words: the transformation of cars into a kind of computer on wheels, the second big step besides electrification. The current CEO Herbert Diess, who was fired on Friday, July 22, has already launched the group with 12 brands in an electric shift without parallel in the world of “old” manufacturers – well equipped to become the market leader in 2025.

But to catch up with Tesla, listed as a model, vehicle programming is 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 goal is ambitious: to program as much code as possible in-house, without relying on software purchased elsewhere, thus retaining control over the nerve center of the car of the future and the economic benefits that come from it. Oliver Blume “must decide if he continues to follow Herbert Diess’s project (…) to do it internally or if he makes a major strategic change” by relying on suppliers, “to live with the consequences of seeing these sources of profit disappear”, notes Matthias Schmidt. “The plan to make everything central will probably be rethought,” said German expert Ferdinand Dudenhöffer, founder and president of the Center Automotive Research (CAR).

Considered to be more “collaborative”, Oliver Blume (a relative of the Porsche-Piech family that controls the Volkswagen group) is – unlike his predecessor Herbert Diess, who arrived from BMW – a pure product of Volkswagen. He will take charge of the German giant on 1 September. Daniel Roland/AFP

harmful confrontation

Another project: repairing the stormy relationship between management and unions that has been weakening Herbert Diess for months. 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 Volkswagen’s boss already seemed compromised for a while. Some of its powers had already been reduced earlier. Herbert Diess “had enemies” and “was neither liked by politicians nor by the co-operation council”, observes Ferdinand Dudenhöffer. Signs of rejection: The board unanimously approved his departure.

To turn the page on the so-called Dieselgate scandal – the one about rigged diesel engines – and launch electrification, “it was very important to move towards confrontation because the group had to be transformed”, Ferdinand Dudenhöffer further notes. But now “it’s a matter of applying” the decisions. “That’s why the confrontation is harmful”, assesses the expert. Even if Herbert Diess “disappears a breath of fresh air in Wolfsburg”, the latter has had the “courage to try”, answers Matthias Schmidt. Close to the Porsche-Piech family, which controls the group, Oliver Blume – unlike Herbert Diess, who arrived from BMW – is a pure product of Volkswagen. “Probably not what Volkswagen needs at the moment,” carves the analyst.

Continuity

According to Ferdinand Dudenhöffer, who is known to be more “cooperative”, Oliver Blume will take over as boss 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. . Signs of some continuity: CFO Arno Antlitz also takes on the functions of COO. And Herbert Diess, according to a source close to the board, will continue to work for Volkswagen until the end of his contract in 2025 – as an “advisor”.

In order to currently keep the direction of the Porsche brand, Oliver Blume will finally have to complete the initial public offering (IPO) of the racing car subsidiary, which is planned for the 4th quarter in an already cool market context. “I think he will stay with Porsche” until the IPO, notes Matthias Schmidt, before “focusing on managing the group and its many tentacles”. The future boss “will be judged on Volkswagen’s success in China and the United States”, two key markets where the group has weakened, Ferdinand Dudenhöffer finally reminds.

Yann SCHREIBER/AFP

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,…

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