CEO: Volkswagen must accelerate tech company not to end up as Nokia

Volkswagen CEO Herbert Diess thinks his company should change more quickly into a tech company, drawing parallels with how Nokia has fared. The new Car.Software division would determine the future of the Volkswagen Group.

There are good developments at Volkswagen, but the time of the classic car manufacturers is over, was the message from Diess to his managers on Thursday. Handelsblatt publishes a transcript of the CEO’s speech. “The future of Volkswagen lies in the digital technology group, and only there. And we will need an extra catching up to mobilize all the potential in the group for this.”

According to him, 2020 should show how agile and responsive Volkswagen has become. “Are we fast enough? The honest answer is maybe, but it’s getting more and more critical. If we keep going at our current pace, it’s going to be very tight.” The CEO referred to Tesla, which now has a higher market value than Volkswagen, according to Diess because the car will become the most important mobile device in the future thanks to network connectivity. He also drew a parallel with Nokia, which he believes was already practically dead during its heyday, because it did not recognize in time that the function of the phone was going to change fundamentally.

Last year the Car.Software division started with five hundred employees and this year it should increase to about two thousand employees. Volkswagen develops about ten percent of the software it uses in cars itself, by 2025 that should be sixty percent.