15% Tariff Would Be 'A Burden' on Volkswagen, CEO Says

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Watch 15% Tariff Would Be 'A Burden' on Volkswagen, CEO Says - Bloomberg on Dailymotion

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00:00Being a global automotive company brings global challenges.

00:03How do you see the tariff situation at the moment?

00:07What's your latest status there?

00:09Are you still in talks with the U.S. to maybe get a side deal, an agreement for your investments there?

00:15We welcome the joint agreement between U.S. and EU with the opportunity to come to a signed agreement

00:22retroactive from the 1st of August on.

00:26And that gives us a planning security.

00:29On the other side, the 15 percent would be a burden for Volkswagen Group.

00:35That's very clear.

00:35And we don't appreciate the asymmetric deal in between U.S. and EU because it's distorting the competition in Europe.

00:44And therefore, we are counting on our own offer, investing heavily in the U.S., linked to our gross plan we planned in the U.S.

00:54And there we are in close contact and good talks with the U.S. government.

00:59And we hope that we come to a quick solution also during the next weeks with the support from the U.S. government to our investments.

01:07Because we think that's very attractive for the U.S. community, building employment, building a supply chain.

01:14And that, at the end, gaining taxes in the U.S.

01:19And that is positive and a better multiplier than having on the other side the tariffs.

01:24Yeah.

01:25Let's stay in the U.S. for a second.

01:27You've long wanted to grow there.

01:28And you've made some investments in the Scout brand, for example.

01:31Now, things have changed.

01:34President Trump is cutting back on EV8, you know, the tariffs we've already discussed.

01:40How do you adapt your North American strategy to those new realities?

01:46Yeah, we are investing heavily, for example, in Scout or in Rivian and another tech partnership in the U.S.

01:52And we see still a huge growth opportunity for Volkswagen Group with all our brands.

01:59And Scout is one positive example to enter now in the biggest U.S. car segment, pickup segment, and the huge rugged SUVs.

02:08And Scout stands for this segment to bring back a heritage U.S. brand to the market.

02:16And what we are offering there is also a car with range extender.

02:20You have an internal combustion engine and offering a huge mileage with these cars, around 800 miles.

02:33And I think that's very attractive for the U.S. community.

02:37And the car is stunning.

02:38We were able to present it also yesterday here in Munich.

02:42And everybody is excited.

02:44And also the first order intakes are very, very positive for this car.

02:49So no changes to Scout.

02:51You're doubling down on that brand and that introduction.

02:54Yeah, we are counting on Scout.

02:56And this is one very important driver of our growth strategy in the U.S.

03:01Your more luxury brands, Audi, Porsche, have struggled with profitability recently.

03:08And, you know, your budget-oriented nameplates, Skoda, for example, have done really well on that front.

03:12How do you explain that and what's the outlook for getting those premium brands back to premium margins?

03:18You have to distinguish the circumstances.

03:22Brands are playing.

03:23Skoda is only playing in Europe and has got a very low level of labor costs, mainly in the Czech Republic.

03:33On the other side, Audi and Porsche are global players in terms of Porsche.

03:37Porsche is in the so-called sandwich positioning in between China and the U.S.

03:42The luxury market broke down over 80 percent in China.

03:46And that counts over 25 percent of the Porsche volume.

03:50And on the other side, we have the terrorist situation in the U.S.

03:55And this puts Porsche under pressure because both markets are counting over 60 percent of the Porsche volume.

04:01We don't earn any money on this.

04:03On the other side, Porsche has a perfect product portfolio, completely new, having record sales in most of the Porsche markets.

04:10But on the other side, we are currently not able to compensate it.

04:14And in Audi, we switched the whole product strategy of Audi, a complete restructuring process of Audi.

04:20We were able to present the new Audi design language yesterday here at the IAA.

04:27And the Audi pass is also very, very promising.

04:30But we have to fight against the circumstances these global players are faced currently.

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