Audi boss predicts 2020 sales slide; seeks to recapture tech lead

Audi is benefiting from a surge in China demand, but it won’t offset losses suffered during lockdowns around the world caused by the coronavirus pandemic, CEO Markus Duesmann said. The 51-year-old executive also ruled out a move to Wolfsburg to take on a bigger role within Audi’s parent, the Volkswagen Group. He discussed these topics and more with Frank Johannsen, who is a reporter at Automotive News Europe sister publication Automobilwoche.

You started as Audi CEO in April, in the middle of the lockdowns caused by the coronavirus pandemic. After having to wait 18 months to start at Audi following your departure from BMW, did you envision a different situation?
It was spooky somehow. I took the opportunity to spend two weeks gathering information in Ingolstadt beforehand, starting in mid-March. That was exactly the point when all the plants and the entire country shut down. I was suddenly in the thick of things and could only look on with amazement. But the crisis team completed a mammoth job in cooperation with the works council. It worked out tremendously well.

How are things going now?
July, August and September look very good. September was the strongest [sales] month of the year – worldwide. Things are going especially well in China, where we even expect a small increase for the entire year. But we are not making up for the heavy losses from April and May of this year, although our sales organization has done a really good job.

When will you be back at pre-crisis levels?
That will take a while longer. Right now, there are still many countries where consumer reluctance persists. I expect it will be about two years before the normalization is complete.

You are Audi’s CEO, R&D chief and China boss, the head of R&D at Volkswagen Group, supervisory board chairman at Lamborghini and Ducati, and have leading roles at the Artemis project for a self-driving EV and the Car.Software organization. Can one person do all that?
Our plan is to breathe life into the claim Vorsprung durch Technik (German for Advancement Through Technology) and give it greater clarity. That’s why we launched the Artemis project and created the Car.Software organization at the corporate level. It makes sense that I would have responsibility for R&D. The construct fits this purpose very well and it works superbly, even if it is naturally very demanding for me to deal with all these matters well. But special times require special measures. And these are very special times for the auto industry. It’s a good thing that I have a strong team handling these issues.

You are Audi’s seventh R&D chief since 2012. How long do you intend to keep that title?
I’ll do it until I believe there a good solution to the succession issue. You cannot change the reality that the company has had turbulent times, especially in development. That was certainly not ideal. Now I will do all I can to make sure everything runs much better in the future and we show continuity again in the R&D area.

You are being considered a potential successor to VW Group CEO Herbert Diess. Is this the next step in your career?
I am clearly ruling that out. This is my dream job, and I’m as happy as can be at Audi. I’m moving from Munich to Ingolstadt right now, and I want to stay here. This is my company.

What lessons are you drawing from the pandemic? Are you making changes to your supply chain to avoid bottlenecks in the future?
I am inclined to think that the supplier structure has shown how robust it is. We hit a bump or two, but all our suppliers basically performed superbly. Everything worked amazingly well. The relaunch was relatively problem-free in this regard. I am really satisfied with the cooperation. I see no need to make any major changes.

Daimler and BMW have intensified their cost-cutting programs during the crisis. Audi says it is still only cutting the 9,500 jobs that were already agreed upon before the pandemic.  Will that be enough?
Nothing is planned beyond that. And we are sticking with the employment guarantee until 2029.

And no more short-time work in Germany despite the fact most of the momentum is coming from China, where you already have a number of factories?
Our German plants also benefit from sales in China since the volumes that Europe supplies to the country are also rising. But it is correct that the European plants mainly depend on Europe, and demand is still restrained here. Fortunately, our plants in Ingolstadt and Neckarsulm are doing well. We even added special shifts in September. We are very confident and aren’t planning any more short-time work for this year.

And for 2021?
We can only hope there isn’t another coronavirus wave. That would be bad. We are confident about next year otherwise.

There has just been a noticeable uptick in the demand for electric vehicles. So far, Audi only has the e-tron and e-tron Sportback in its lineup, with the e-tron GT and the Q4 e-tron coming in 2021. Are you too late to benefit from the boom?
A little earlier wouldn’t have been bad. The topic has picked up quite a bit of steam lately. I think we will still be on time. We will have 20 battery-electric models by mid-decade. That puts us in an excellent position.

What exactly are you planning?
We are coming out with at least one new battery-electric vehicle each year — and that’s in a range of classes and segments. We will be making offers along the entire breadth of our portfolio.

What is on the way specifically?
We aren’t talking about that yet. For now, I’m just looking forward to the e-tron GT, which will reach the market in early 2021. The car is a sensational product. It’s going to be my favorite car.

And your next company car?
Of course!

And how long will internal combustion engines survive?
I think it will be a while. The future of the internal combustion engine will ultimately be a political question, and it won’t be decided throughout the world at the same time. So, it definitely makes sense for different markets to turn to electric mobility as well as modern, highly efficient internal combustion engines.

At Audi as well?
We have a very systematic electric strategy. But for the foreseeable future, many of our customers will continue to want an internal combustion engine. So we will keep working on their efficiency. It is still our goal to be CO2 neutral by 2050 in line with the Paris climate accord. We are committed to it.

Does that also apply to diesels?
Out of all the internal combustion powertrain, diesels are by far the most efficient. But due to exhaust treatment, they have also become very expensive and are not an attractive option in every vehicle segment. But since many of our customers still love diesels, we will continue to offer them. 

What are you most looking forward to when the pandemic is over?
Greeting people with a handshake again. I am a big fan of the handshake. I miss it a lot. It’s not the same as someone just nodding at me or bowing.

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