Tuesday, August 21, 2012

The Power of the Group

In 1998 when Volkswagen Group acquired Bentley Motors; or more precisely, Rolls-Royce & Bentley Motor Cars, enthusiasts of these two iconic brands held their breath wondering what the German giant would do with the treasured British classics. Fourteen years later we can look back on an excellent stewardship, and a significant investment in a prosperous future for the Bentley marque.

The Rolls-Royce brand was handed over, in 2001, to BMW AG in excellent condition, and the Bavarian company has also invested heavily, ensuring Rolls-Royce was treated with commensurate respect, and produced cars worthy of carrying the ‘Flying Lady’.

Over that same 14 year period Volkswagen AG also acquired Bugatti, Lamborghini and recently Porsche - adding to a stable which already included VW, Audi, Seat and Skoda. In each case the Chairman of the VW Group, Ing. Dr. Ferdinand Piech, was careful that each brand was managed with a high degree of professionalism, and enjoyed access to the outstanding resources and people within the ‘Group’.

Dr. & Mrs. Piech checking out the opposition, on the Toyota display at Geneva 2007

The result is the Volkswagen Group is one of the major global players in every market worth participating in, including of course, China - where VW is a major influence. Rather than diminishing the VW brand by diversifying, and sharing those valuable resources, the very canny Dr. Piech has made sure the Group has grown stronger, anchoring its balance sheet with assets which grow more valuable each year.

In one of his most prescient decisions, he moved Ing. Dr. Martin Winterkorn from head of Audi AG to the role of Chairman of the Volkswagen Group. Although you would probably not describe him as charismatic, Dr. Winterkorn is very bright, very experienced and very astute, and has rewarded Piech’s confidence in him by bringing VW to the position of global power it now enjoys. They are a very, very formidable double act, and I for one hope they remain in charge for a while yet.

However, there is certainly one man among the many talented senior managers for whom I have the greatest respect, and I believe he could one day take over from Martin Winterkorn, and that is Ing. Dr. Ulrich Hackenberg, currently head of VW’s research and development.

Ing. Dr. Ulrich Hackenberg
I formed a very good friendship with Ulrich Hackenberg when he served briefly as Member of the Board for Engineering at Bentley Motors. He is a very talented, straight-talking engineer, boasting eminent credentials, boundless curiosity, brilliantly innovative thinking and a charming, but quiet, personality. He's also a great skier!

Looking at the cars produced recently under his guidance there are four which stand out, not only for their simplicity and integrity, but also their innovation as well.

VW Eos

Passat CC
VW Golf convertible

The Golf 6 (diesel) GTD and Golf convertible; the VW EOS and the Passat CC are completely different concepts, based on VW’s outstanding platform-sharing policy, but all retaining an engineering thoroughness which can’t help but impress.

I have driven all these cars over considerable distances and each of them boasted not only impressive performance, ride and handling; but delivered these qualities with reliability, lack of fuss and economy.

So, looking forward I now see two more cars which bear the stamp of Ulrich Hackenberg and these are outstanding concepts for the future - yet again showing that Volkswagen is a name which commands respect in the automotive industry and should never be underestimated. The VW BlueSport roadster, and the VW Up! city car are cars I can’t wait to drive.

VW BlueSport roadster
Volkswagen Up!
Mind you, with Martin Winterkorn keeping a close eye on the Group’s bottom line I can’t see the roadster appearing unless it can make money; but the Up! will be on the road later this year - putting VW at the heart of the challenge to bring economical, enjoyable city car driving to the “volks” (people)!

L-R: Walter de Silva (Designer), Ulrich Hackenberg & Martin Winterkorn

From a design viewpoint the BlueSport looks like something I’d be proud to have on my driveway. The Up! is deadly practical, and cute, but it’s too mundane for me. However, what both cars show is that Volkswagen Group is prepared to take risks (albeit calculated risks), so it’s not your boring old Toyota, making cars that are incredibly reliable, whilst being incredibly dull. That is, not withstanding the joint Subaru BRZ-Toyota 86 sports coupe.

I’m very proud to have served with the VW Group for almost 10 years, and meeting Dr. Piech a couple of times along the way, and whilst I can no longer call Ulrich Hackenberg one of my regular contacts, the time I have spent with him tells me that VW is in good hands.

It’s no surprise to me that VW AG survived the GFC in such great shape, despite the massive downturn in the sales of its niche brands Bentley, Bugatti and Lamborghini. They are all returning to profitability and they are great marques, well-managed. Their future is now guaranteed - thanks to Ferdinand Piech’s instincts and wisdom, and astute choice of management talent.