Stefan Jacoby gave his Keynote Address at Washington Auto Show, yesterday. We have it here but unfortunately not in podcast form.
It is an honor to be here in the nation’s capital as part of the Washington Area annual auto show.
Thank you, Joe, for that kind introduction. I would also like to thank Ambassador Scharioth for joining us here today.
And I want to acknowledge and thank Dave McCurdy. Dave does a great job as president and CEO of the Alliance of Automobile Manufacturers.
It is an honor for Volkswagen Group of America to chair the alliance this year.
The auto alliance reflects the global reach of our industry. Our members include American, Europeans and Asian companies.
Together, we produce 77 percent of the cars and light trucks sold in the United States.
We are fierce competitors. But we share collective obligations and responsibilities.
Our industry changed the world by offering mobility to rich and poor alike.
Mobility brings freedom, opportunity and economic development.
It enriches the human experience.
It breaks down barriers. It opens new possibilities.
However, those positive changes have come at a cost to our environment.
Our industry has been part of the problem; now we are determined to be part of the solution.
We have the knowledge, the technology and the desire to change direction.
The members of our alliance are united in supporting policies that meet the needs for clean, safe, fuel-efficient, affordable vehicles.
We recognize that our industry is in transition.
We are reinventing the automobile. We are moving as fast as we can toward the goal of sustainable mobility.
Alliance members are guided by four core principles:
- To thrive in a clean-energy economy, our industry must look to the future and anticipate social needs. Long-term planning is critical.
- We must engage all stakeholders to enhance energy security and combat climate change.
- We must rely on sound data and advanced engineering to achieve sustainable, safe mobility.
- To preserve a healthy, competitive industry, we must be on the leading edge of the new clean-energy economy.
The industry-wide focus on sustainable mobility is one reason I am optimistic about our future.
These are challenging times, but working in the automobile industry is a great experience.
Producing and selling cars is an art and a science. And also fun.
You have to rely on your heart as well as your head.
You have to produce cars that offer state-of-the art engineering and the joy of driving.
Above all, you have to innovate.
Our industry has been doing that from the beginning.
The early automotive pioneers tried everything.
They tried steam vehicles… Electric vehicles… Gas engines… Diesel engines.
One of the first internal combustion engines used oxygen and hydrogen for fuel. It didn’t work very well, but it developed important technical principles.
Before long, the industry settled on oil-based fuels. That may have been the best choice of the time. Now, we have alternatives for our future. I will have more to say about that in a moment.
The other notable feature of those early days was the global nature of the car business.
The industry’s founding leaders included, for example Karl Benz, Gottlieb Daimler and Ferdinand Porsche in Germany;
- Armand Peugeot in France;
- and Henry Ford and Ransom Olds in the United States.
Their names live on.
Their ideas have been improved in ways they could not have imagined.
We haven’t always gotten it right.
No one does.
Early in the last century, Scientific American told its readers that _quote _ ‘the automobile has practically reached the limit of its development.’
In 1968, BusinessWeek magazine confidently predicted that— quote — ‘the Japanese auto industry isn’t likely to carve out a big slice of the U.S. market.’
I like that one.
That gives me comfort when people question our goal of selling a million Volkswagens and Audis in the U.S. market by 2018.
We will prove the doubters wrong again.
The Volkswagen Group of America moved its corporate headquarters to the Washington area last year.
Our move was the most visible part of a much larger strategic redirection in the U.S. market.
We didn’t just change our office location.
We changed our way of thinking. We changed the way we do business.
We developed an atmosphere within the company that encourages innovation, creativity and collaboration.
We’re putting our ideas into action.
We’re betting on the future with a one billion dollar investment in a new production facility in Chattanooga, Tennessee.
About 150,000 of those one million cars will be a mid-size sedan made by American workers in Tennessee.
We will create at least 2,000 jobs at our factory and nearly 10,000 more at suppliers and related businesses.
Workers broke ground for the first phase of construction — a $30 million paint shop — last month.
That’s how confident we are in the American economy. That’s how confident we are in Volkswagen’s future in this country.
How can I be so confident, especially now?
Because the car industry has been through hard times before.
We always have ups and downs.
We feel the impact of economic fluctuations. And we feel the impact of fluctuations in customers’ tastes.
In these challenging times, the economy and customers are sending the same message.
Consumer tastes are in line with economic reality.
To survive, we have to respond.
And we will. Hard times have accelerated innovation throughout our industry.
You can see the change at this year’s auto show.
There is a new focus on fuel efficiency, alternative fuels and sustainable mobility.
There has been a lot of talk about how the auto shows this year lack the PR gimmicks and lavish events of previous shows.
To me, that is a good thing.
We are getting back to the basics of making quality cars that meet consumer needs.
Fortunately, Volkswagen has a head start.
Our company pioneered the U.S. market back when the world’s economy was still neatly divided by national borders.
We have always been willing to defy conventional thinking.
The VW Beetle changed the way Americans think about cars and became an icon for a generation.
Audi’s all-wheel drive Quattro system changed perceptions about 4-wheel drive in passenger cars.
We’re still changing the way Americans think about cars.
But we’re also doing a better job of listening to our customers.
Our Volkswagen and Audi brands are expanding the range of fuel-efficient options for American customers.
We introduced nine new products in 2008. For Volkswagen — the Tiguan, Routan, Jetta TDI, Jetta SportWagen and CC. For Audi — the A4, A5, TTS and a refreshed A3.
Our direct injection diesel technology — TDI clean diesel — dramatically reduces vehicle emissions when compared to traditional gasoline engines.
And it’s more fun to drive.
We will soon be introducing TDI versions of the Touareg, the Rabbit and the Audi Q7 and A3.
We are confident that we will see growing demand for TDI as American customers become more familiar with its advantages.
Our Jetta TDI has been in high demand since its introduction in August. It was recently named the 2009 Green Car of the Year.
Up until this point, we have focused on four door sedans and SUVs with our clean diesel technology.
But, our Volkswagen BlueSport concept behind me averages 55 miles per gallon and goes from zero to 60 in 6.2 seconds.
It is a sexy, mid-engine, two seat roadster that will redefine the sports car of the future.
Going forward, we will offer clean diesel in up to 30 percent of the cars that have a diesel option, including the new mid-size sedan that we’ll build in Chattanooga.
Our work on clean diesel is just a small part of our effort to protect the environment.
Our commitment to sustainable mobility covers the entire lifespan of a car, from the earliest stages of the manufacturing process to the vehicle’s final trip to the recycling yard.
Our integrated approach ensures that environmental protection is accepted as a core management mission throughout our company.
We’ve designed our new plant in Tennessee to reduce energy consumption and limit environmental impacts at every step of the manufacturing process.
To achieve our goals for the environment during the car’s service life, we are working toward zero-emission vehicles while doing all we can to improve fuel efficiency now.
We’re refining our hybrid vehicles. Some car experts call our prototype Golf Turbo-Diesel Hybrid a ‘super hybrid.’
We are working on second generation biofuels.
They are produced from straw and other biomass that do not serve as food sources.
And, they can be produced in a carbon-neutral or nearly carbon-neutral process.
For diesel engines, we’ve developed the all-synthetic SunFuel.
This cuts greenhouse gas emissions by 90 percent.
We are working on a practical zero-emission hydrogen fuel cell car. And we are at the forefront of the shift to electric cars.
Ladies and Gentlemen, customers are responding.
Americans love their cars.
They love clean technology. That’s good. It’s even better when they love our cars and our technology.
Like our competitors, we sold fewer cars in the United States in 2008.
But we increased our market share by 20 percent. The Audi brand was particularly strong.
Globally, our company defied industry trends and increased car sales, despite the international economic problems.
The Volkswagen Group delivered 6.23 million vehicles to customers last year and set a new sales record. This is a 0.6% increase over 2007.
Audi increased global sales by 4 percent and passed the million mark for the first time. It was Audi’s 13th delivery record in a row.
Our performance in a down market, internationally and the United States, shows that we will be ready for takeoff when conditions improve.
I’m proud of my company. I’m proud of our industry. We are facing unusual challenges.
But we are still moving forward. We will get through this rough patch with clear thinking, creative solutions and concerted effort.
Recent events have reminded us how important the auto industry is.
Our industry is woven into the fabric of American life.
It helped build the middle class in the post-war times. It helps sustain the middle class today.
The jobs we provide in our manufacturing plants, at our suppliers and in our dealerships support families and communities across the country.
That doesn’t entitle us to anything. It does mean that we are an important part of the nation’s economy.
As President Obama said in his inaugural address, quote ‘… everywhere we look, there is work to be done….We will harness the sun and the winds and the soil to fuel our cars and run our factories.’
This is the work that we, as an industry, must do together. We all have a stake in our future.
We will not achieve our goals overnight. It will take time, hard work and cooperation from other stakeholders. We have to be smart about it.
Our alliance supports a nationwide program on fuel economy and carbon dioxide standards that bridges state and federal concerns. We are using everything in our arsenal to make progress in that area.
Uniformity would move all stakeholders forward. A patchwork approach makes a difficult job even more complicated.
We also need to work together on alternative fuels. We have the technology to shift from oil-based fuels. We don’t have the infrastructure we need to deliver and support alternative fuels on a mass scale.
And as we develop new and better ways to power cars and trucks, we have to make sure those vehicles are safe, affordable and practical.
During this transition period, it is critical to maintain a shared commitment to the goal of sustainable mobility.
The recent drop in energy prices makes the task more complex. Lower fuel costs encourage our dependence on oil-based fuels.
Government can help by providing tax incentives that move us toward our objectives.
Customers can help by taking a long-term view when oil prices fall.
Our industry will help by staying focused on our collective future.
The way forward is clear: We must continue the shift to alternative fuels. When it comes to energy, there is no turning back.
The vehicles we are developing today will define the next generation of cars and trucks. Robust competition will help make sure we get it right.
Competition brings out the best in all of us. It makes us stronger.
Customers are best served by a vibrant auto industry.
Innovation can come from anywhere — from Detroit, from Chattanooga, from Wolfsburg, from Torino, from Nagoya.
We are proud of our past.
But we are not clinging to old ways.
Our industry has changed many times over the course of its 120-year history.
We are in a period of profound change now. And we will emerge better for it.
The economy will rebound. That is a fact.
And when it does, the winners will be the companies that stay focused on the basics — innovation, creativity and listening to customers.
But that’s how it’s always been.
That’s what makes the car business so much fun.
And that’s why I’m so confident in its future.
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