SPIEGEL Interview with Volkswagen CEO Martin Winterkorn: "People Act as though the Hybrid Could Solve all our Problems"

Volkswagen is currently under political pressure for not moving faster to develop hybrids and other lower-emissions automobiles. Critics say the German carmaker isn't doing enough to protect the environment. In a SPIEGEL interview, VW CEO Martin Winterkorn defends his company's record and says Volkswagen will bring a hybrid to the market by 2008.

Is Volkswagen doing too much to increase its horsepower but too little for the environment?
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Is Volkswagen doing too much to increase its horsepower but too little for the environment?

SPIEGEL: Mr. Winterkorn, why is the German auto industry currently in such poor standing?

Winterkorn: What makes you think we are in poor standing?

SPIEGEL: Isn't it embarrassing that German carmakers are not achieving the climate protection goals they have set for themselves?

Winterkorn: No, because reaching these goals isn't entirely up to us. The European auto industry made a commitment to reduce carbon dioxide emissions by an average of 140 grams per kilometer. But then there was a significant change in what customers wanted in their vehicles. We couldn't predict that. They want cars with more powerful engines, air-conditioning and all kinds of electronic gadgets to enhance comfort and safety. They are buying high-roof cars with higher air resistance values and SUVs. These segments have experienced the biggest boom in recent years.

SPIEGEL: Has the industry become a slave to its customers?

Winterkorn: No, but it happens to be our job as manufacturers to satisfy our customers' needs. When I became head of Audi five years ago, the business press wanted to know why we hadn't come out with a real SUV yet. Automobile magazines criticized us for having missed out on a trend.

SPIEGEL: And now even the German president is criticizing the German auto industry. According to Horst Köhler, it has "not earned any admiration when it comes to environmental developments on the earth."

Winterkorn: I disagree with such statements. Politicians are fond of criticizing others. But responding just as sharply is generally not an option for us, because politicians are among our best customers. It isn't exactly a secret that they don't usually drive the most efficient cars.

SPIEGEL: But the German auto industry can certainly be criticized for succumbing to a ridiculous competition to deliver the most powerful engines. For example, when BMW came out with eight-cylinder, 300 horsepower diesel engine, Mercedes-Benz introduced a 314 horsepower engine and Audi followed suit by upping the ante to 326.

Winterkorn: The tough competition among German manufacturers makes us fundamentally strong. You have cited what may seem like a negative example of engine performance from today's perspective. But competition has chiefly led to substantial improvements in the efficiency of diesel engines and, as a result, improvements in fuel consumption.

SPIEGEL: But this competition has clearly failed in one area: German carmakers haven't come out with a single hybrid yet. Meanwhile Toyota, with its hybrids, might as well be using Audi's advertising slogan: Vorsprung durch Technik (Innovation through Technology).

Winterkorn: We lived up to the concept of being innovative through technology back in the 1990s, when we unveiled the Audi duo, the world's first hybrid series-production vehicle. But the market apparently wasn't ready for it then, and we sold only a few hundred of the cars. Even today, the big run on hybrids remains a limited phenomenon. Just take a look at registration statistics. Customers figured out long ago that although a hybrid engine is advantageous in city traffic, this isn't the case on the highway. But of course we too will be offering this type of engine. In fact, we have been working on this concept for the past two or three years. It isn't a significant problem from a technical standpoint. The first hybrids are already being tested.

SPIEGEL: Then why is it taking so long for VW or Audi to come out with their first hybrids?

Winterkorn: It won't be much longer. It'll happen in 2008. However, we had not expected this to become such an emotionally charged issue. People act as though the hybrid could solve all of our problems -- which is certainly not the case. And you must not forget that we are a business enterprise. The hybrid engine costs a lot of money, and customers are hardly willing to spend so much more for a car. The Japanese have a huge advantage. The low yen exchange rate reduces the cost of every car they build in Japan by €3,000 to €4,000. This allows them to include many options in their vehicles without increasing the price.

SPIEGEL: Regardless, the general impression is that Toyota offers advanced technology to help reduce environmental problems. Meanwhile, German carmakers are threatening layoffs to prevent more stringent emissions standards from being attached to future models.

Winterkorn: That's nothing but clever marketing on the part of our competitors. It has nothing to do with the facts. For years, we have been investing billions to reduce fuel consumption with direct-injection diesel and gasoline engines. We reduced weight at Audi with aluminum bodies and at VW with lightweight steel, to name only a few examples.

SPIEGEL: Nevertheless, you have now pressured the European Union not to set binding CO2 emissions limits of 120 grams per kilometer for all manufacturers. Are German carmakers putting the brakes on environmental protection?

Graphic: A missed opportunity
DER SPIEGEL

Graphic: A missed opportunity

Winterkorn: No, they are not. If the initial idea had prevailed and average carbon dioxide emissions were to be at 120 grams beginning in 2012, large cars would be practically nonexistent. We would no longer have the Audi A8, the Mercedes S Class or BMW's 7 Series, nor would we have any larger family cars. Or they would become expensive enough to drastically reduce sales of these cars. If that happened, it would no longer be worthwhile to even develop such vehicles. This would benefit Italian and French manufacturers, who have gone to selling small cars almost exclusively. A few people are pursuing two-fisted industrial policies to the detriment of German manufacturers. Shouldn't we defend ourselves against this?

SPIEGEL: But, please, spare us the argument that there is a threat that thousands of jobs are at risk. German producers were already saying the same thing 20 years ago, when the catalytic converter was introduced. And, as we all know, that wasn't true.

Winterkorn: The emissions caps initially envisioned would most certainly have threatened jobs, especially in Germany. The European Commission was on the verge of jeopardizing the future of an entire industry. The new proposal is an improvement in that regard, because it would no longer set CO2 emissions limits for each manufacturer, but rather for each class of vehicle. We could live with that. It fosters competition to come up with the best technical solution.

  • Part 1: "People Act as though the Hybrid Could Solve all our Problems"
  • Part 2
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