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Speaker 1: Let's talk about Volkswagen. We've had a conversation with the CFO.

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Speaker 1: What is interesting here is basically what happens with electrification,

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Speaker 1: and I think that is the kind of the key theme.

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Speaker 1: The electrication story has fallen flat to a certain extent,

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Speaker 1: but Volkswagen is still continuing to push really hard, thirty

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Speaker 1: new products this year. Planning for thirty products, I mean

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Speaker 1: that sounds like a lot. I think if you take

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Speaker 1: the tops off, there are similarities between many of those products.

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Speaker 2: And we shot about the share price share sounds seven

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Speaker 2: tenths of one percent to fight the proper the profits

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Speaker 2: actually coming in higher than expected. If we're talking about

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Speaker 2: these new models, how much demand actually is there for

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Speaker 2: the EV story. I think that's going to drive not

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Speaker 2: only with the Volkswagen story, but the global EV story

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Speaker 2: as well.

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Speaker 1: And how much of this is in Volkswagen's at all?

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Speaker 1: How do you reignite this story? This is what the

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Speaker 1: CFO has to say.

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Speaker 3: We didn't get a breakdown of how they're broken down

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Speaker 3: in terms of combustion engines, hybrids and electric vehicles. I'd

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Speaker 3: like to get an understanding of how that how it

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Speaker 3: breaks down in those categories.

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Speaker 4: Yeah, birth thanks for coming to Berlin. Yeah, you talked

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Speaker 4: about the new models. The new models play a really

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Speaker 4: important role in going into the year twenty twenty four.

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Speaker 4: Twenty twenty four will be a challenging year. We have

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Speaker 4: macronomic environment is uncertain, we have interest rates still high

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Speaker 4: on inflation on the cost side, and there's a lot

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Speaker 4: of competition in the BB markets. But they're also positives.

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Speaker 4: The market will grow slightly and we bring some great

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Speaker 4: new models specifically on the BB side. Ima Khan will

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Speaker 4: be a great one. Accus x Eteron will be a

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Speaker 4: great one eighty seven tour of very important models for

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Speaker 4: the respective brains, and these models as an example for

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Speaker 4: twenty twenty four will bring us a significant positive tailwind

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Speaker 4: for twenty twenty three. They are also on new commuscially

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Speaker 4: engine models hitting the showroom specifically from brand Group Volume

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Speaker 4: and Brent Volksbag a Pazade, very famous one, Tigo and

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Speaker 4: a very important one. And that shows that we are

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Speaker 4: in the transition phase to electrification and digitalization and we

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Speaker 4: are convinced the future will be electric. We have a

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Speaker 4: certain flexibility and the customer can choose and.

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Speaker 3: I think that everyone agrees. I think you would agree

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Speaker 3: that the destination has not changed in terms of electrification,

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Speaker 3: but the rate at which they're traveling there. I think

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Speaker 3: everyone has been surprised by how much slower it is

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Speaker 3: than had been anticipated. What do you think needs to

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Speaker 3: happen to reinvigorate electric vehicle demand and what is under

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Speaker 3: Volkswagen's control to get people into better electric vehicles?

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Speaker 4: No, you're absolutely right. We are convinced the future will

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Speaker 4: be electric and we are preparing accordingly, but different markets

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Speaker 4: a little bit different pace. China is developing rather fast

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Speaker 4: towards electrification in Europe and US slightly slower, But we

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Speaker 4: are convinced with more models available, both in the premium

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Speaker 4: segment and also in the volume segment, and as you know,

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Speaker 4: we bring also a twenty five thousand euro car in

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Speaker 4: twenty twenty six. With more affordability of electric cars and

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Speaker 4: also with the increase of charging infrastructure, we will gradually

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Speaker 4: see an increase of the BB share in the overall market.

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Speaker 3: And do you think that? Do you think that? So

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Speaker 3: it seems like regulators and consumers maybe want different things.

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Speaker 3: Do you think twenty thirty five is a realistic target

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Speaker 3: in Europe to get rid of all combustion engines, I.

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Speaker 4: Said before, we have really an ambitious transformation plan towards

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Speaker 4: electrification and we are planning accordingly up from here to

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Speaker 4: twenty twenty five. It's up to the customers to choose.

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Speaker 4: But from a legal lator side, we need stability and

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Speaker 4: we have that stability in Europe. We have a decision

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Speaker 4: and we are planning accordingly to twenty thirty five a

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Speaker 4: runout of combustion engine cars and this is how we

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Speaker 4: set up our investments.

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Speaker 3: And then in terms of the cost cuts going forwar

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Speaker 3: because if it's not going to be a very strong

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Speaker 3: growth here and maybe pricing power isn't where it has

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Speaker 3: been in the last couple of years, you're gonna have

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Speaker 3: to focus on cost. Where the cost cut's going to

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Speaker 3: come and can you get VW to where it needs

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Speaker 3: to be on margins?

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Speaker 4: Know quite right, I said, twenty twenty four will be

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Speaker 4: a challenging year, but we launch really ambitious efficiency programs,

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Speaker 4: not only in Brand Folksvarn, also in Brand Group, Core

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Speaker 4: and the whole group, and they will be very important

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Speaker 4: to support our profitability. Look, we are in an industry

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Speaker 4: and transformation. We have great products, but in order to

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Speaker 4: be able to powerfully invest into the future. We need

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Speaker 4: sufficient profitability and the cost improvement has to come from

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Speaker 4: at least the major part has to come from the

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Speaker 4: fixed cost site overhead costs, other fixed costs, also improvement

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Speaker 4: in productivity. These are the things we are looking at.

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Speaker 3: And thinking a little bit about. Also your growth and

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Speaker 3: your future. Obviously, China has been an absolutely crucial and

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Speaker 3: immense market for Volkswagen. However it's basically flatlined last year

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Speaker 3: two percent growth only when you did twenty percent in

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Speaker 3: the US and in North America. What is your is

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Speaker 3: what is your assumption for the Chinese market over the

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Speaker 3: next twelve eighteen months. Is it that it will not

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Speaker 3: really contribute that much to growth?

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Speaker 4: So this is a very rareic question. To understand it,

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Speaker 4: that must be a little bit broader of you. We

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Speaker 4: launch a catch up landach. We realize we brought great borogs,

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Speaker 4: but we had to catch up. We have to catch

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Speaker 4: up specifically in driving as system function, in INCA entertainment,

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Speaker 4: also in we need cheaper batteries. We need elf pay batteries.

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Speaker 4: All the competitors have lf pay batteries. We have more

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Speaker 4: expensive on nmcs. And we launched this catch up program

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Speaker 4: and in addition to that we bring two to new

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Speaker 4: cars on a platform from a partner. But these measures

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Speaker 4: will take until twenty twenty six, and along with our

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Speaker 4: value over volume strategy, we are deliberately prepared to give

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Speaker 4: up market chair in the next I would say one

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Speaker 4: to two years twenty twenty four twenty twenty five, in

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Speaker 4: order to find a sound compromise between margins and volume.

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Speaker 4: But from twenty twenty six onwards we want to regain

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Speaker 4: share also in the BB segment.

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Speaker 3: And so by twenty twenty seven, let's say, where would

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Speaker 3: you like to see market share for battery electric vehicles

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Speaker 3: in China?

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Speaker 4: The battery electric vehicle market share and twenty twenty seven

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Speaker 4: should should abroad like from twenty twenty seven onwents a

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Speaker 4: share we have currently in the market in average okay,

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Speaker 4: but not from twenty twenty four to twenty twenty six,

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Speaker 4: but rather twenty twenty seven on wards.

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Speaker 3: And in terms of obviously we have this EV probe

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Speaker 3: going on from the Europeans into China. Are you concerned

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Speaker 3: that that is going to come back as retaliatory tariffs

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Speaker 3: with some of your models that you produce in Europe

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Speaker 3: going over to China.

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Speaker 4: We are a global company, and we stand for free trade,

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Speaker 4: we stand for open markets, and this is where we

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Speaker 4: stand for and this is what we what we advocate for.

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Speaker 3: And in terms of are you excited about having an

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Speaker 3: F one team and the audio portfolio? Have you enough

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Speaker 3: F one team?

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Speaker 4: I'm excited. I am I excited. They have two hearts

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Speaker 4: in my clift. Yes, it's a great opportunity Fauty, but

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Speaker 4: they're also costing curt and we have to compensate for

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Speaker 4: that on the cost site in terms of the efficiency programs.

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Speaker 4: This is what I can say.

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Speaker 3: And then about these sort of one sort of topic

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Speaker 3: that's not the most glamorous in the car industry, but

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Speaker 3: it's the residual value of evs, which is obviously we've

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Speaker 3: seen fall off of a cliff and has huge implications

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Speaker 3: for everybody. It's a massive market. How do you put

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Speaker 3: a floor under the residual values and how do you

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Speaker 3: diagnose what's happening in the secondary market for battery electric vehicles?

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Speaker 4: Now the sideral values have come down slightly, but they

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Speaker 4: are still rather healthy. If you compare the recidial values

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Speaker 4: with like if the past, you have to take into

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Speaker 4: account that we come from a period where we had

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Speaker 4: not enough chips and not enough new costs, so the

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Speaker 4: recidial values were driven by extraordinary high use car prices,

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Speaker 4: and these prices have come down significantly both for the combustion, ergy,

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Speaker 4: cast and electrical costs, so it's more like a normalization.

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Speaker 4: And second, if you calculate the residual values, they are

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Speaker 4: often calculated or they're genetically calculated from the list price

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Speaker 4: to what you get for the for the use card.

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Speaker 4: But in a lot of European markets there are subsidies

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Speaker 4: schemes with thousands of euros in place, so most of

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Speaker 4: the customers don't really pay the list price. So if

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Speaker 4: you adjust for these factors, the recidial values in a

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Speaker 4: BVS are on a rather healthy basis.

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Speaker 3: And just very quickly this despite a challenging year. What

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Speaker 3: is going to be the biggest growth market for you

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Speaker 3: guys this year?

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Speaker 4: The breggst growth market should be North America, should be US.

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Speaker 4: We have unique chances to grow profitable in the US

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Speaker 4: this year twenty twenty four and the years to come,

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Speaker 4: and we really want to seize this chance.

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Speaker 3: And that is even before the introduction of the SCOUT,

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Speaker 3: which is very much looking forward.

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Speaker 4: To you're quite right. This will then boost twenty twenty six,

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Speaker 4: twenty twenty seven, I must say, we'll give another boost

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Speaker 4: in the our us.

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Speaker 3: All right, ma Arno, And let's thank you so much

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Speaker 3: for your time today.

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Speaker 4: Thank you very much.

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Speaker 2: Arnold Antletz there, the CFO of Volkswagen, speaking to our

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Speaker 2: very own Oliver Krook