"Our tank is filled and we're ready to drive through the economic crisis" were the words from Volkswagen of America CEO Stefan Jacoby in front of a few hundred people, mainly students, at UCLA's John Anderson School of Management on Thursday. Jacoby said, "we're going to turn challenges into opportunities".
Jacoby kept his focus on VW and was reluctant to discuss Detroit's bailout, even though their Routan minivan is made in Canada with the Chrysler Town & Country and Dodge Caravan. He did say the bailout is all about the U.S. even though "GM is strong in Europe and China" and "it cannot be a solution to let Opal, Vauxhall and Saab go". He said, "too much is driven by quarterly reports and Wall Street".
VW is investing heavily in the U.S. with a $1 billion "environmentally friendly" production facility in Chattanooga, Tennessee, "on schedule" for a 2011 opening and have stated their goal of selling 1 million vehicles annually in the U.S. by 2018. Jacoby says, "we are determined to part of the (environmental) solution".
Jacoby believes "it will take 20 to 30 years to phase out fossil fuels" and VW TDI "clean diesel" engines with reduced emissions vs. gas "is a step in the right direction". He says diesel fuel is more expensive than gas because of "high demand in the U.S. for heating and farming." He said, "new technologies should be supported by tax credits".
He says, "it will be 15 to 25 years before electric cars are affordable to consumers globally". He cited charging, recycling, battery and infrastructure issues and said, "there is a global shortage of batteries" and "no country is prepared for electric cars".
Jacoby favors tactics used in Europe. "The U.S. government should tax to push people into fuel efficient vehicles. Europe has been raising taxes on gas for 15 to 20 years to push fuel efficient cars." Jacoby also says incentives to dispose of older cars or "scrappage is working in Europe" and proposes that would help dealers and be a stimulus to industry in the U.S.
VW's sales in the first two months of 2009 is 26,404, a decline of 14.7% from 2008, which is less than the industry's fall-off rate and Audi's 2009 sales through February are 9,375, a 25.4% drop from 2008. Jacoby says "we are car guys - we believe in branding - a strong emotional brand is important". Volkswagen is the world's 3rd largest vehicle maker and, including Audi numbers, near the bottom of the top 10 as ranked by U.S. sales. Jacoby says, "we like to be little David fighting Goliath in the U.S. market".
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Jacoby should look at his customer service first. View my Volkswagen experience at http://www.reesphotos.com/VW/