Hybrids & Electrics

Volkswagen CEO Admits the ‘Era of Classic Carmakers Is Over’

Volkswagen’s agenda for the last two decades or so has been to be the largest, most dominant, Godzilla-like vehicle manufacturer, the world has ever seen. Every year it makes wild pronouncements about production goals that if met would begin the trajectory to overlords of the auto universe. Then, on the way to that glorious day, it got caught cheating on diesel emissions. Now that it has turned a corner Volkswagen’s CEO is saying, “The era of classic carmakers is over.”

It is taking years and billions of dollars to clean up the dirty diesel mess it found itself in. Volkswagen desperately wants to show the world it is the most eco-friendly, nicest, bestest vehicle manufacturer. That way it can reconnect with its ultimate goal of becoming the largest vehicle manufacturer.

“The era of classic carmakers is over” is the beginning of a marketing headbutt

But, whereas the diesel scandal was of its own making this new Volkswagen transformation needs your help. So it is nudging everyone into believing the vehicles we choose to purchase need to align with its new woke self.  It’s projecting a stern declaration that everything related to the manufacturing of “classic” vehicles-that means whatever you are now driving, is so over. 

It sees the world as we knew it having made a profound change because that idea aligns with Volkswagen’s pursuit of becoming number one. It couldn’t do it by creating millions of dirty diesel vehicles it proclaimed were “clean diesel.” And it can’t magically start producing electric vehicles overnight. You might ask, “Why not?”

Volkswagen’s trickle of electric vehicles is getting a yawn

It can’t because it takes a while to ramp up production of a new type of vehicle. But an interesting thing is happening as it begins to trickle out its entré into dominance; there aren’t enough buyers. The trickle of electrified vehicles has been met with a yawn in Europe. 

All-electric vehicle sales combined amount to 3% of total vehicles sold in Europe. It’s 2% in the US. There just isn’t the traction Volkswagen was hoping for. Since it snapped its fingers and went down the Electric Avenue path it expected the whole of Europe to do the same. It hasn’t. So now Volkswagen needs to start an information campaign about how everything is changing and you should get on board.

If Volkswagen can’t sell everyone on “clean diesel” it has few options

Photo: Getty

Eventually, vehicle sales will be split about 50/50 between ICE and electric. That time won’t be here for another 20 years or so by best projections. But Volkswagen doesn’t have 20 years because it has made this deal with the devil. If it can’t sell everyone on “clean diesel” it has few options. So, electrification must be the plan and that plan only succeeds if everyone wants an electric vehicle. They don’t. At least not right now.

So what is Volkswagen to do? Herbert Diess is the Volkswagen CEO tasked with messaging. He says Volkswagen needs to focus less on production and more on profits. That’s because the whole “bigger is better” won’t work anymore. He says Volkswagen must cut out complexity, hike productivity, and slash costs. What that means is that Volkswagen is going to be hellbent on replacing its idea of being the biggest to be most profitable. It’s just a different “bigger is better.” 

Everyone needs to be in on that memo. It’s desperation. It’s wanting to be the best at something besides cheating on diesel emissions. Diess is saying Volkswagen needs to focus on “its strengths and leave out or give up everything which stands in the way of raising performance.” 

Volkswagen knows those numbers can’t be maintained without diesel

Since the diesel dupe, Volkswagen sales have flattened out after a steady rise year-over-year starting in the early 2000s. That figure is around 100-million vehicles worldwide including 2019. But Volkswagen knows those numbers can’t be maintained without diesel, and it knows that diesel is dirty. 

Either its production numbers will decrease or it needs to find another avenue to replace diesel. Electrification seemed to be the answer. Sales and consumer preferences are not helping toward that goal. Watch for more pleading and bleating as Volkswagen hammers consumers to buy into its electric dreams.