In the May 2013 issue of Forbes, the headline “How Volkswagen Will Rule the World” is part of their series of “These Businesses Rule the World.”
Joann Muller the auto global industry writer for Forbes made a very good case for Volkswagen.
After a recent management meeting, “Winterkorn solemnly reminded his people of what they already knew: “It’s halftime.” Five years ago, on the eve of the Great Recession, he had laid out an aggressive plan to land Volkswagen at the top of the global auto industry by 2018, surpassing both General Motors and Toyota. “We’ve had three strong years,” he acknowledged. “You might feel good, but we have to stay focused.” His goal is more than just topping GM and Toyota financially. By 2018 Volkswagen will be “the world’s most profitable, fascinating and sustainable automobile manufacturer.”
To sustain this growth, Winterkorn is deploying this cash gusher toward the biggest spending binge in VW’s history. Over the next two years the company, along with its Chinese joint ventures, plans to invest almost $80 billion in ten new plants (including seven in China) and scores of new products, from an American-style SUV to a $9,000 starter vehicle for emerging markets, as well as in technologies like plug-in diesel hybrids and advanced infotainment systems.
To fully understand the scope of Winterkorn’s ambitions, it helps to go to VW’s hometown of Wolfsburg, Germany, a small northern city in the middle of nowhere that literally grew up with the Volkswagen Beetle. The city was carved out of farmland in 1938 as a place to house workers assembling “the people’s car” ordered up by Hitler prior to World War II. Until the massive factory with its imposing power plant was erected along the shores of the Mittelland Canal, the most notable landmark was the medieval Wolfsburg Castle, for which the town was named.
Today Wolfsburg (pop. 123,000) might as well be called Volkswagen City. The 73-million-square-foot factory, employing more than 50,000 workers, and an adjacent 13-story brick headquarters building still dominate the riverfront landscape. The company’s influence is everywhere, from VW-sponsored cultural festivals hosted in a defunct power plant to the nearby Volkswagen Arena, home of the VW-owned VfL Wolfsburg soccer team, to the VW-owned Ritz-Carlton hotel, where visiting VIPs tend to stay.
About one-quarter of the tourists are Volkswagen customers who travel from all over Europe–sometimes even farther–to take delivery of their Wolfsburg-built vehicles. Last year Volkswagen delivered more than 173,000 new vehicles this way, instead of at the dealerships where they were sold. The cars awaiting delivery each day are stored in one of two iconic 20-story glass towers that rise above the Wolfsburg landscape. Robotic elevators pluck 500 cars a day from their sky-high perches and present them to their waiting owners down below.
Piech and Winterkorn have been called Germany’s “dream team” because of their complementary leadership talents. There’s no question that the mercurial Piech, 76, is still calling the shots strategically. He is the grandson of Ferdinand Porsche, developer of the fabled sports cars and inventor of the VW Beetle, and his family still controls about 30% of VW’s shares and 53% of its voting rights. While group chief executive, Piech started the collection of luxury brands under the Volkswagen umbrella.
Often blunt and sometimes gruff, Winterkorn’s supreme confidence can be mistaken for arrogance. “We are a team, and we have a very clear, common goal,” says Christian Klingler, board member for sales and marketing. “There are a lot of debates about how to achieve it. But he’s a brilliant boss, and you are learning from him every day.”
To read the full Forbes article, Click How Volkswagen Will Rule the World