VW CEO Winterkorn faces 4 tough tests
|Harald Hamprecht is Editor-in-Chief at Automotive News Europe.|
Volkswagen Group is firing on all cylinders. VW CEO Martin Winterkorn remains determined to pass General Motors and Toyota to become the world's largest automaker by 2018. This rise to the top could even happen this year, if you believe forecasts from market researchers such as IHS Automotive.
In Europe, the German group currently owns more than a fifth of the market - with a share of 23.2 percent, which is more than PSA/Peugeot-Citroen (12.6 percent) and Renault (9.4 percent) combined.
But all that glitters is not gold.
1) Winterkorn has to be careful not to get the image of being the industry's relentless eager beaver. The goal to become global No. 1 has been overemphasized for too long.
Sure, only those leaders who have ambitious goals will reach them. Plus, targets like these will help maintain morale.
Winterkorn recently told me that he clearly understands that "size is not a goal in itself." He wants to have "the most satisfied employees and customers in the world," -- while also selling more than 10 million cars a year and achieving a profit margin of more than 8 percent by 2018.
Winterkorn added: "We stand by our commitment to make each individual model as efficient and environmentally friendly as possible. If we do all that, the Volkswagen Group will be the most sustainable company in our industry.''
But Kia boss Hank Lee seems to have a more likable way to speak to the masses when he says: "Our goal is to become the world's most loved brand."
2) VW is not feeling a lot of love right now. It seems to be on track to being the most sued auto brand. VW and Porsche face a 1.1 billion euro lawsuit over accusations that Porsche misled investors during a failed attempt to buy VW. The legal conflict has derailed plans to merge the two companies, meaning expected savings of 700 million euros a year will have to wait.
3) It also will be a while before VW starts any joint projects with Suzuki, which wants VW to sell back its 20 percent stake in the company.
Was it really necessary for VW Group to wage a mudslinging campaign against its Japanese alliance partner? Does VW really think it can more effectively and efficiently develop low-cost cars for markets such as India on its own? Will Skoda be able to fill that hole?
4) Another potential risk for VW is that it's difficult to see the difference between the VW brand's new Up entry-level minicar and its sibling models, Seat's Mii and Skoda's Citigo. Will the enlightened buyer fall in love with these cookie-cutter models? Sure, a similar strategy has worked well for the Czech-made Toyota Aygo, Citroen C1 and Peugeot 107. But that is no guarantee for VW. Honestly, I would have expected more creativity -- some kind of edge -- from the company that wants to become the world's best-performing and "most future-proof" carmaker, according to Winterkorn.
It will be interesting to see whether the crafty VW CEO will be able to overcome these challenges or see them stall the German giant's march toward No. 1.