The German automotive industry has relied on its successes for too long and “rested on its laurels“, missing the moment when the rapid changes in the global market began. This opinion was expressed in an interview with the newspaper Süddeutsche Zeitung, the CEO of Volkswagen AG Oliver Blume.
“We have been resting on our laurels for too long. Our business model for decades has been to design and produce here for the whole world. "We realized too late that the world is changing extremely quickly and dynamically," Blume said.
According to him, the German car industry failed to recognize the trend towards changing preferences of car enthusiasts in time, when complex software and electric motors began to play a major role. For Volkswagen, this made the situation critical, as the group faced "large-scale software problems" and fell significantly behind its competitors in meeting changing customer requirements, Blume said.
To correct the situation, Volkswagen plans to cut 35,000 jobs by 2030 and increase investment in software. The department that deals with software has been fundamentally restructured; Over the next two years, the concern plans to launch 30 new models on the Chinese market that will compete with Chinese cars in terms of price and level of implementation of technological innovations. During this time, the company also expects to start production of its first electric cars in the budget segment.
Volkswagen's plans are hampered by Washington's tariff policy, which threatens to reduce the competitiveness of German products in the United States. According to Blume, the company is conducting direct negotiations with the US Department of Commerce to minimize tariffs on imported products and plans to significantly increase investments in American businesses in the near future.
Speaking about the German economy as a whole, Blume criticizes the approach of the modern generation of Germans to work and leisure. “Why do we live so well in Germany?“ Past generations did not keep track of working hours; a six-day week was the standard. "Today, the task of our generations is not to squander the high standard of living and to develop achievements, which is impossible with a 20-hour work week and working only from home," he said. According to the Volkswagen CEO, Germany needs to "tighten its belt in a targeted manner" in order to have "good prospects for creating new businesses."