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In Good Company with Nicolai Tangen

Porsche and Volkswagen CEO: Leadership, iconic cars & Chinese competition

Join us for an exciting drive with Oliver Blume, the CEO of Porsche & Volkswagen! Oliver talks about his love of cars, the magic of the Porsche 911, Chinese competition in the EV market and how he splits his time leading two companies. When Porsche got listed in 2022, we were a cornerstone investor, and today we own over 1% of Porsche and Volkswagen. We are in the race together, so let us go for a ride.

The production team for this episode includes PLAN-B's Pål Huuse and Niklas Figenschau Johansen. Background research was conducted by Kristian Haga.



Hosted on Acast. See acast.com/privacy for more information.

Duration:
35m
Broadcast on:
15 May 2024
Audio Format:
mp3
Hi everybody, today we're going for an exciting drive with the CEO of Porsche and Volkswagen, Oliver Blue. Now Porsche is one of the most recognised brands on the planet and we own more than 1% of Porsche and Volkswagen. When Porsche got listed in 2022, we were a cornerstone investor, so we are kind of in the race together here. So have a six-year call and know Oliver. Yeah, hello. It's a great pleasure to be together with you and joining your podcast, Serious Nickel Drive. So Oli, are you petrol hand? I am. I am. I'm working in the automotive industry since 30 years. I'm passionate for cars and I love it to drive. When did you buy your first Porsche? I buy my first Porsche when I started at Porsche almost 12 years ago. And it was the 911. What's the magic with 911? I mean, your ticker code on the socket change is P911. You have 911 million shares an issue. So what is it with this number? Yeah, the 911 is our icon. Our first edition we launched in 1963 and since then we had numerous successes and victories in motorsport and the 911 expresses what Porsche stands for. It's a unique design. It's a great performance of the car and it's the great lifestyle of Porsche our customers love. So you read professional petrol head. You basically open the door of a car and you sit down and you start the engine. How do you know it's a good car? So when you drive, you start to drive, you know, second, third, fourth gear, just how do you know that you love this car? What is it you're looking for? Yeah, first of all, we have the key on the left hand side at Porsche and then I know that I'm at home and feeling the car for me is how is the drivability of a car? What does that mean? What is it? How do you steer the car? If it handles like a go-kart with a direct steering, then the handling, how you're taking the curves, how the chassis is reacting, how is your seating position? And all these factors are important for the drivability of a car and at the end at Porsche to have a real sports car. And for Porsche, it is important having on the one hand side the sportiness, the performance and on the other side, the abilities is a daily driver. So you add all these together, this kind of drivability, how does Porsche differ from other cars? Yeah, for Porsche, it's not only the acceleration for us, it's putting into the car a lot of innovations coming from motorsports because we think that the racetrack is the hardest testing field for our innovations. For example, our PDK, the braking systems and the hybrid systems and a lot of innovations coming from motorsports and that is important to differ from the competition. It's not about acceleration, it's about the driving abilities and our hardest measure is the time we are achieving on a racetrack for us. For example, the Nürburgring Nordschleiffer, the famous one in Germany or Laguna Secker. And there we know every second is important to build the perfect sports car. What about the brand? What is implied in the Porsche brand? The brand is very important as Porsche, we were able to develop a iconic brand during the over seven decades and it's a heritage of our brand, for what our brand stands for. The contradictions in between usability and design for example, play a big role. Then the Porsche culture, play a big role and at the end, the iconic product. With 3.56, our first model and the 9.11 and all the other models over the 7.18, Cayenne, Panamera, Denden Makarn, play player, important role. This combination is what our customers love because we are the brand for those who follow their dreams. Who is your time customer? We haven't got a special target customer important for us to fulfill dreams. What kind of dreams? To have a fulfilled life dream, we have people stand for success and at the end to fulfill their own dream and so our customers are people who love to drive sporty cars, who love brands and at the end to have a high level of individualization, exclusivity. Our customer profile around the world is like this, but for example, the share of diversity is different. In Asia, we have a share of 50% male, male and female. In the western world, it's more 80/20. Why do you have a higher penetration in Asia in terms of female drivers? Because they love the luxury positioning of Porsche. We have a lot of very successful young ladies in Asia, entrepreneurs and they describe the customer profile perfectly that they are hardworking and they are aiming for success and then they are spending in luxury goods like Porsche, loving the heritage of our iconic brand and on the other side, the modern technology. You have kind of branched on with the likes of Macan and you mentioned exclusivity, but you do produce a lot of cars. How do you balance exclusivity with the amount of cars you sell? Porsche is positioned uniquely in the automotive industry. On the one hand side, we are a luxury player by achieving a rich sales price over 100,000 euros. On the other side, we have the opportunities of scale. We sold over 300,000 units last last year and we are benefiting from the scale effects in between our brand, but we have on the other side also the opportunity to benefit from the scale effects in Volkswagen Group, where we are collaborating in terms of modules, parts, purchasing, volume and so on. What is important for us being able on the other side to offer exclusivity, whatever our customers ask us, we are able to implement into our cars so we can say that no Porsche, you can compare with the other who is leaving our production line. Now, we are going to focus mainly on Porsche today, but you are also the CEO of Volkswagen. Just remind us, what is there in the Volkswagen Group in addition to Porsche? Volkswagen Group is much bigger and Volkswagen Group, we are over 680,000 people working there and Porsche is a company with 40,000 people. Each of the brands in the Volkswagen Group are different and for us it is important. We are very international group that we have the culture of each brand, where we are positioned like Lamborghini or Bentley. We have the Italian culture, the English culture for Bentley for example, then we have Audi and Volkswagen in Germany, Skoda in Czech Republic and the big difference is the complexity. We do have to handle in the Volkswagen Group, but the great issue is that we are able to manage all these fantastic brands in the Volkswagen Group. I think each of these brands, something positive, where can you learn? My history, I were able to work at Audi and at Volkswagen and at Seattle for example, and in each brand, I have seen very positive practices. I were able to implement also in Porsche. I am a happy driver of an Audi, so that kind of suits my temperament. If you look at the value of the Group, and we will not spend much time on this, but it is fair to say that most of the value in the Volkswagen Group is kind of tied up in the Porsche brand, what do you think that is telling us about the rest of the Group? With Porsche IPO, we have shown the value of the Porsche brand, and we were able to unleash the potential of our brand with a very, very successful IPO, with very difficult circumstances at this time, and the positive development shows what potential we do have in Porsche, which is our robust financial profile, and in Volkswagen Group. I think there is still a lot to improve in terms of the capital market value, and we have shown a very robust result in 2023, implemented a clear strategy, a clear restructuring plan, and this year we will bring over 30 new products to the market, and I think it has a lot to do with trust and delivering our result, and then there is a big potential also on the Volkswagen Group stocks. A big market for you is China. How do you see the Chinese market now? Yeah, China, we see a big development in terms of innovations, a fantastic speed, and so for us it was a clear decision in Porsche to build more technology and innovations in China for China, for example, our Porsche Digital, to offer our Chinese customers the Chinese ecosystem, especially in terms of digitalization. We are very well positioned in China in the luxury segment, over 500,000 remember with an average sales price of a million RMB, this is a segment of 600,000 units. Up to now there are only international brands in this segment, no Chinese brands. We think with our engine positioning, the mix of ICE, plug-in hybrids, and BEFs, we are well well positioned for the market, there is a strong demand, but what is very important for us is also well over volume, and so, especially last year we reduced our volume, not joining the discount and pricing war we are faced in China, and that was very, very successfully maintaining our luxury positioning there. What about the electric vehicle market in China, how do you see that, how do you see competition? Yeah, a lot of new competitors are entering in the market, but most of them are more in the volume and premium segment. The luxury market for electric mobility isn't built yet. We have shown a market share over 30% for the Taikon, in the luxury electric segment. Now we are entering with the new Macan, and the new Taikon, and that's a big opportunity for Porsche, especially built this luxury segment on electrification and portentess, that you are coming with big innovations. We are offering now, for example, our new product there in the market, and having great opportunities to build the market. When you drive with the Chinese competing cars, what do you think? They are very good in terms of digitalization, they are very good in terms of voice recognition. Some of them have very good advanced autonomous driving abilities, and so I think the Chinese have learned during the last decade to build cars. They are advancing very fast, so I think we don't have to hide for the competition in China, but it's worse to have a look on Chinese car makers, and that's my experience in my work life. Wherever you are, you can learn something, and to make yourself better, and so we don't fear competition. We are from the racetrack, and competition makes you better, and at the end, competition drives innovations, and innovations are positive for the customer. Absolutely. You mentioned digitalization, so the whole infotainment system, how important is that in today's car? More and more important, the customers expecting their digital ecosystem they are used from their mobile phones, for example, often their cars, and therefore, in Porsche we decided to own a new board resource, driven by Sachad Khan, caring about all the car IT issues, and infotainment is one important offer. We are developing for our customers, and there, as I mentioned before, also developing solutions in the regions of the world, in this case in China, for China, but also in the US, we have partnerships and activities to provide to our customers the perfect infotainment system. What about batteries? How do you see the battery technology moving? The battery technology has seen a big advancement during the last years, especially in terms of chemistry, which led to bigger ranges than for us fast-charging play-play, big-role. Porsche was a first-series manufacturer with an 800-volt system, which brought us to charging times 20 minutes from 10% to 80% charging level, and we are aiming for an even more improved charging time of around 15 minutes for the upcoming cars. We see a lot of potential in the electrification, and therefore, we have a very ambitious target to achieve by 2030, 80% of our cars fully electric, because we think that electromobility is superior than the combustion engine cars, because of the strong development during the last years and the still unleashed potential of electric cars. At the same time, you invest in e-fuels. What is the e-fuel? We think decarbonization from a global approach, and we take over-responsibility, and we think also to all the combustion engine cars around the world, but also chips and aircraft. Synthetic fuels play a important role when you are able to produce them in regions of the world where renewable energies are unlimited. The need of energy is higher, comparing to hybrids or to full electric cars, but when you produce them there, there isn't the argument anymore about the need of energy, and that's a combination of hydrogen and CO2, coming by air capturing from the air. The big advantage of so-called e-fuels is that the transport is very, very easy without cooling or putting them under pressure, like you have to do it with hydrogen. You can use the net of the existing filling stations. You can mix them with traditional fuels, and you can use existing combustion engines, and so it's an additional argument for decarbonization, especially in the transformation, and thinking about the regulation in Europe, maybe 2035. When they won't release any more combustion engine cars, you will have the existing cars still on the road, and therefore we need a solution. And therefore, in addition to a strong electrification strategy, we are investing also in e-fuels. Now, Oli, when we last met, you were super excited about the launch program for next year. Tell me about it. What are you launching? What should we be waiting for here? That's the biggest launching program in the history of Porsche. We are now fully in the market with the new Cayenne. We have had already the market premiere for the new Panamera, then the new Marcan in January in Singapore, and four weeks ago, we were able to launch the new Taycan, and there especially the Taycan GT, for completely new model lines for Porsche, and at the end of the year, we expect in a new 911, and the first time of the history was hybrid, and so we are renewing five model lines of Porsche, of our existing Thicks, and that is a great ambition for our team, a great challenge. We have to handle this year, but a great opportunity for our customers. Which of these are you going to drive? I'm in a good position to test all of them. I bet. I love the 911. That's good to be the boss, huh? That's a great advantage. The 911, I love it, I own 911s, and especially the new 911, and I test them with a hybrid engine, and the tremendous acceleration, and still having the six cylinder box store in the rear is fantastic. Today I'm driving a Taycan, the new one, with more range in WLTP. We are close to 700 kilometers of range, fantastic charging times, tremendous acceleration, and what you have seen with the Taycan GT is also on the racetrack, a very, very cool car with records on the Overgreen Lodge Live, or Laguna Seca, and so both of these cars are fantastic, and then in the second half of the year we'll come the Macan, and that will bring the Macan to a completely new level, full electric Macan with the offers of infotainment, charging navigation or augmented head-up display with a lot of features where we will play in the Premier League. Sounds cool. Talking about the Premier League and coming back to motorsport, what are the innovations from motorsport that you are integrating into these new models? Yeah, motorsport is the core of Porsche. We're counting 19 victories in Le Mans, for example, this year we were able to win the 24 hours of Daytona, the heritage race in the US, and for us, motorsport is the toughest testing field for our innovations, and for example, the new hybrid for the 911 is a motorsport hybrid, which came from the 918, but also the oil cooling. We are using for our new battery systems, we developed first for motorsport, the 800 volt system is coming from the motorsport, it's only three examples of what we are doing there, we will continue to do so, because we think motorsport is a core of Porsche, and from motorsport are coming the best innovations. Changing tachibets and moving on to corporate culture, just generally speaking, how do you feel it is to do business in Germany? In Germany we are in a situation where we are looking back to decades of success, welfare in the community, and that's not given for the future, it's like in sports, when you win a cup, you haven't got the guarantee that you will win it the next year, and so that is the situation in Germany, all we are thinking about to fight for the success in the country, and so we have some circumstances which are not so easy to drive the business in terms of industrial regulations, energy pricing, but we are proud, being a German company founded in Stuttgart, southern housing, and we produce a majority of our cars in Germany, because we think that German quality is still a important brand mark, especially in terms of cars, and so we are in close contact also to the German government to improve the industrial regulations, and then we think we have very qualified people in Germany, we have perfect engineering capacities, and so Germany especially has got a big future, when we are prepared and able to focus on our strengths, we were able to show them the past. If you could change three things with the German industrial policy, what would it be? First of all, our industry is driven by speed, and we have a lot of regulations, not only in Germany and Europe as well, to reduce regulations and coming to faster decision making in between politics and industry, then what we can change is the support for the industry, especially when you are investing, there are also decision making processes, but also subsidies, especially when you are going in new technologies, and that is important for Europe and for Germany to having a clear master plan on which new technologies we want to focus, and then in terms of electromobility, I think it is important beside of the new products, the industry is bringing to the market, also to support in terms of charging infrastructure, in terms of new renewable energies, and these three points I would like to speed up and to change. It speeds technology and charging infrastructure. You have a long tradition in Germany of very high union and employee engagement at board levels and so on, just what are the pros and cons of working in this way? We are acting as a family, working together, and for me it is always important getting a close feedback, also from the labor side. We are driving the companies together with an entrepreneurial spirit, and they're kind of the same as we talked about the politics. We shouldn't increase our regulations and agreement processes. We need the speed for taking decisions. I have a very positive experience working together with the worker unions. When you deal fair and deal with full transparency, you can solve every problem, and that's my working experience of three or three decades, and that's how I'm handling the process together with our partners. Now you are CEO of two companies, right? So both Portia and Volkswagen, how does this work, how does it beat your time? For me it was very important when I have taken the decision, also take over the responsibility and in Volkswagen Group to drive at the same time, Portia, because for me it's important to be very closely linked to technology, to processes, with a close contact to the people being able to take the right decisions on the strategic group level. It is a challenge, very clear in terms of organization, but when you take the right priorities, it works, and now I'm driving this for over one and a half year, and up to now we haven't got a conflict in between. I think it's very supportive driving both at the same time, and it's not new in a Volkswagen Group that I see all driving a brand, like a Ferdinand P.H. or Martin Winterkorn, I have driven also the brand of Volkswagen, so I'm driving Porsche and Volkswagen Group, and my feedback up to now after one and a half years, it works perfectly and it's supportive. Do you have to change the way you behave when you go from one company to the other? Do you have like Porsche Cap and Porsche shoes, and then you move room and you put on something else? Yeah, leading, both shops are very different in Porsche. I'm very deeply involved in the operative processes, and the Volkswagen Group is more strategic than I'm leading 12 brands, and the technical issues are similar, but on the end I have partners, CEO of all brands, who are responsible for the other brands, and we are taking more decisions, how we can improve our scale effects in between the brands, how we are driving together, performance programs, and taking strategic technology decisions, and there it's very helpful that I'm very closely linked to the car business, and being able to evaluate technologies and taking these decisions, and so both of these shops are very different, one is more operative and the other one is more strategic. When you are so involved with technicalities and the technology in Porsche, how do you avoid becoming micromanaging those things? Or do you? It's all about priorities. I'm used since many years to work with a so-called top 10 plan. What are the most important topics to solve them in a year, and that helps to focus on the right things, and I implemented this systematic, and that's not important if you're talking about 10.5.7 points, you need the right priorities, and beside of this, this embedded in a long lasting strategy, and I built my strategy in terms of 10 years, and so I have a clear focus where to lead the company, but also with the operative program year by year with the right priorities. Now, I know that you are skiing from time to time with Oxalun Swindall, my fellow Norwegian guy, he's one of the best skiers of all time, so I asked him how your skiing was, and he said you were pretty, pretty, fairly, and very fast, so is that the way you run the company as well? Yeah, I love it to drive fast, and Oxal is a great skier, but also a great, great person, is the ambassador of Porsche, and I love it to be together with him and heading out for skiing, and also on the racetrack, he's a great, great racer, and that combines us. We are coming from sports, and I love it to drive the company like a sports team on the one hand side, focused on performance, on speed, on the other side, on team spirit, and to working together, helping each other, winning and losing together, and taking the right decisions with the same mindset. I asked him whether you skied faster than a Porsche, and he said thankfully not, so I guess that's a good news, but you started it right. How do you remain grounded, kind of, to the factory floor, when you have such important positions? Yeah, I spent the most time in my professional life in production, and so I'm still very closely linked to, especially people in production, and when I'm walking around in the factory, there's still a very close contact, and people there tell you the honest things and the truth in what's going on in a company, and that's very, very important for me, and I think as a CEO of a company, it's very important to be touchable for the people. Like this, you're getting the right feedback for taking the right decisions, and so in Porsche, we like it to work very closely with the team, and also having events together, and there being touchable, and being very close to the team. Now you have a PhD in mechanical engineering, do you think you would have had the credibility with your colleagues if you didn't have that? At the end, it's your input in the company and your impact you have. For me, it was a good opportunity when I started working at Audi, doing a parallel PhD, and also I did it in China over 20 years ago, and it was a great experience as a young man going to China, and feeling the engineering and innovation spirit they started in these times with electric vehicles where nobody else sought in the success of electric vehicles, and so for me it was a great experience working there in the automotive industry institute of Tongji University in Shanghai, but in terms of credibility, it helps to understand and to deep dive into technologies, but at the end it's more important how you act, how you decide, and how you work together with the team. How much do you work? A day around 12-12 hours, depending sometimes in the evening, and one day on the weekend, that for me is also important to have the right balance between work and personal life. I love sports, and that's also important being fit and having the right physics to being able to drive the company. And in addition to skiing, what kind of things do you do? I'm used to play soccer, and now I prefer to run, to jog, and then mountain biking, it's my favourite sport, and sometimes I'm going to play tennis. So only we've got tens of thousands of young people on the podcast here, so if you were to give them advice, and that's not to go and save up to buy a Porsche, but something else, what kind of advice would you give them? Yeah, I'm in the situation as a family father, I've two daughters, and they started the last years studies at university, and I told them, listen to your heart, what you want to do, and when you love things, you're passionate for them, and at the end they're coming the right results. And that was also my spirit in my whole career, and that's my advice to young people when they start a career, for me it's impossible to plan a career, and always focus what you are doing at the moment, and at the end the success will pay off. Well, it seems like you have certainly listened to your heart, and a lot of engines also I suspect during the years, but a big thanks for being on, and good luck in the fast lane. Yeah, thank you very much Nikolay for the good talk, and thank you very much for the great partnership in the Porsche stocks. Fantastic, thank you. [Music]

Join us for an exciting drive with Oliver Blume, the CEO of Porsche & Volkswagen! Oliver talks about his love of cars, the magic of the Porsche 911, Chinese competition in the EV market and how he splits his time leading two companies. When Porsche got listed in 2022, we were a cornerstone investor, and today we own over 1% of Porsche and Volkswagen. We are in the race together, so let us go for a ride.

The production team for this episode includes PLAN-B's Pål Huuse and Niklas Figenschau Johansen. Background research was conducted by Kristian Haga.



Hosted on Acast. See acast.com/privacy for more information.