Volkswagen replaces Audi chief amid push to electrify

The news

Volkswagen replaces the CEO of its luxury brand Audi and appoints Gernot Döllner to take over Markus Duesmann as the company looks to accelerate the transition to electric vehicles.

Mr. Döllner, who has served as Volkswagen’s lead strategist, will assume his new role from September 1, Audi said in a statement on Thursday. Audi, while profitable, is struggling to switch to battery power and compete with the growing threat from Chinese automakers.

Herbert Diess, CEO of Volkswagen before Oliver Blume took over in September 2022, Mr. Duesmann moved from BMW to Audi three years ago, hoping to help the brand innovate and boost sales of its electric models.

The company’s revenues rose 40 percent to 7.6 billion euros, or $8.3 billion, in 2022, thanks to a decision to prioritize its more expensive vehicles over more affordable cars as it worked to address a shortage of chips caused due to the supply chain disruptions related to the coronavirus pandemic.

Audi is now working on its latest generation of internal combustion engine models and plans to add 10 new electric models to its lineup ahead of plans to produce only EVs from 2026.

What it means: Audi faces competition for electric vehicles.

Audi is Volkswagen’s second most important luxury line after Porsche. While Porsche has successfully broken into the electric vehicle market, Audi’s strength is the continued popularity of its internal combustion engine vehicles.

Now the company is facing stiff competition from the leading electric vehicle manufacturers such as Tesla and Chinese automakers. Mr Blume has said he expects the company to maintain 14 per cent growth and that he wants Audi to better coordinate its production with both VW and Porsche.

That will be easier with Mr. Döllner as head of the company, having spent many years with Mr. Blume worked when both were top executives at Porsche, which, like Audi, is owned by the Volkswagen group.

Mr. Döllner has been with Volkswagen since 1993, while still pursuing his doctorate. He served as head of Porsche’s 4-door Panamera saloon series, which he helped develop.

What’s Next: A focus on North America and China.

Mr. Döllner’s main focus will be on continuing discussions to open a factory in North America. Audi’s main competitors, BMW and Mercedes, both have production facilities in the United States, enabling them to produce almost twice as many vehicles for that market. Audi’s SUVs are popular with American motorists, and the company is considering developing electric versions of several of its leading models.

In China, Audi’s internal combustion engine vehicles remain popular, but the company needs to accelerate production of electric vehicles if the brand wants to remain competitive with popular local manufacturers, including BYD and Chery.