Volkswagen AG has ambitious plans to build a new large car and expand globally. Robert Buechelhofer, group vice president for sales and marketing, spoke with Georg Auer of Automotive News Europe about the company's goals. Edited excerpts of their conversation follow.
Why are you planning to launch a future large Volkswagen? Shouldn't Audi be the focus for such models?
Volkswagen needs it. The brand has the power to be present in all segments. That is why we will extend the brand. Just look at the development over the past five years. Once, VW was just centered around the Golf. Then other successful new models came along: Polo, Passat and now Lupo. So the choice has grown for our customers.
Just look at the position we have reached in Europe. We are building 450,000 Passats a year. When the model was introduced, our goal was 300,000 a year. So you can see the
potential of the brand is very high. The launch of a large car is the next logical progression for the VW brand.
In the past, large cars such as the Opel/Vauxhall Senator and Ford Scorpio have hardly been spectacular successes. Why should VW's large car be any different?
Those experiences are there to be studied and utilized. We can learn a lot from those failures. We are good pupils. We know that a lot of time and preparatory work is needed for such a model. We will take this time and use it wisely.
Will the large VW come off the same assembly line as the Audi A8?
No, that is not our plan.
But on the same platform?
That is possible. But the VW car will have a completely different look, emotional presence and character.
Will you give it a special name, as Toyota did with Lexus?
No, we will not disown our child.
What is your worldwide business forecast for the current year?
We delivered more than 4.5 million cars to customers in 1998. But we are living in a world of contracting markets. Sales figures are under pressure in important regions such as Italy and the United Kingdom. Now Germany is suffering as well. Growth in 1999 can only be achieved by winning a greater market share.
What are you aiming for?
Twelve percent worldwide. It is within reach. We currently have 11.5 percent, and in 1997 we had 10.4 percent. Let's see what the world has in store for us.
When will VW pass the 5 million mark?
That depends on development of world markets. We are near to it. But the collapse of the Brazilian market in particular has set us back. If Brazil had remained healthy, we would have already passed the 5 million mark.
Where are your main growth targets?
Western Europe, but also central and eastern European countries. We hope the Czech Republic catches up again and gets its economy right. At present, the development there is not very satisfactory.
We are doing very well in Japan as the leading importer. The Asian markets will develop in different ways. We believe Thailand, Taiwan and South Korea are steadily recovering. But Malaysia, Indonesia and the Philippines have not yet managed to overcome the region's economic crisis. Australia is coming along very positively. However, we are preparing for a tough time in South America.
You omitted Poland.
Poland is a very interesting market with positive development. It definitely will contribute to growth.
U.S. reaction to the New Beetle has been extremely positive. Is it realistic to expect the car to be as successful in Europe?
The New Beetle is an important chapter in the development of VW. The car spreads its shine to the whole VW brand. It is an emotional vehicle. It is bringing fun back to the car business.
However, there is a difference between the United States and Europe. In the United States, the New Beetle is being bought by the so-called baby boomers - the postwar generation. Added to this, young people in the United States are also reacting very well to the car.
European public reaction has been similar. But it's important to realize the car comes from a different background. In Europe, the original Beetle had the function of a basic motor car.
So the starting point is different. In Europe, the Beetle was a mass car. That was never really the case in the United States.