Porsche and Volkswagen CEO: Leadership, iconic cars & Chinese competition

Hi, everybody. Today we're going for an exciting drive with the CEO of Porsche and Volkswagen, Oliver Blum. Now, Porsche is one of the most recognized brands on the planet, and we own more than 1% of Porsche and Volkswagen. When Porsche got listed in 2022, we were cornerstone investors, so we are kind of in the race together here. So, herzlich willkommen, Oliver.

Yeah, hello. It's a great pleasure to be together with you and joining your podcast series, Nikolai.

So, Olli, are you a petrolhead?

I am, I am. I'm working in the automotive industry since 30 years. I'm passionate for cars and I love it to drive.

When did you buy your first Porsche?

I bought my first Porsche when I started at Porsche, almost 12 years ago, and it was the 911.

What's the magic with 911?

Yeah, the 911 is our icon. Our first edition, we launched in 1963, and since then, we had numerous successes and victories in motorsport, and the 911 expresses what Porsche stands for. It's a unique design, it's a great performance of the car, and it's the great lifestyle of Porsche. our customers love.

So, you, real professional petrolhead, you basically open the door of a car and you sit down and you start the engine. How do you know it's a good car? So, when you drive, you start to drive, you know, second, third, fourth gear, just how do you know that you love this car? What is it you're looking for?

Yeah, first of all, we have the key on the left-hand side at Porsche, and then I know that I'm at home, and feeling the car. for me is how is the drivability of a car?

What does that mean?

How do you steer the car? If it handles like a go-kart with direct steering, then the handling, how you're taking the curves, how the chassis is reacting, how is your seating position, and all these factors are important for the drivability of a car, and, at the end, at Porsche, to have a real sports car. And for Porsche, it is important having on the one hand side the sportiness, the performance, and on the other side, the abilities as a daily driver.

So, you add all these together, this kind of drivability, how does Porsche differ from other cars?

Yeah, for Porsche, it's not only the acceleration. For us, it's putting into the car a lot of innovations coming from motorsports, because we think that the racetrack is the hardest testing field for our innovations. For example, our PDK, the braking systems, and the hybrid systems, and a lot of innovations coming from motorsports. And that is important to differ from the competition. It's not about acceleration, it's about the driving abilities, and our hardest measure is the time we are achieving on a racetrack.

What about the brand? What is implied in the Porsche brand?

The brand is very important. as Porsche. We were able to develop an iconic brand during the over seven decades, and it's a heritage of our brand, for what our brand stands for.

Who is your target customer?

We haven't got a special target customer. It's important for us to fulfill dreams.

What kind of dreams?

To have a life dream. We have people who stand for success, and, at the end, to fulfill their own dream.

Why do you have a higher penetration in Asia, in terms of female drivers?

Because they love the luxury positioning of Porsche. We have a lot of very successful young ladies in Asia, entrepreneurs, and that describes the customer profile perfectly. They are hardworking, and they are aiming for success, and at the end, they are spending in luxury goods like Porsche, loving the heritage of our iconic brand, and, on the other side, the modern technology.

You have branched out with the likes of Macan, and you mentioned exclusivity, but you do produce a lot of cars. How do you balance exclusivity with the amount of cars you sell?

Porsche is positioned uniquely in the automotive industry. On the one hand side, we are a luxury player by achieving an average sales price of over €100,000.. On the other side, we have the opportunities of scale. We sold over 300,000 units last year, and we are benefiting from the scale effects in between our brands, but we have, on the other side, also the opportunity to benefit from the scale effects in Volkswagen Group, where we are collaborating in terms of modules, parts, purchasing volume, and so on. What is important for us?

We are going to focus mainly on Porsche today, but you are also the CEO of Volkswagen. Just remind us, what is there in the Volkswagen Group, in addition to Porsche?

Volkswagen Group is much bigger. We are over 680,000 people working there, and Porsche is a company with 40,000 people. Each of the brands in Volkswagen Group are different, and for us it is important. We are a very international group, that we have the culture of each brand, where we are positioned like Lamborghini or Bentley. We have the Italian culture, the English culture for Bentley, for example.

Well, I'm a happy driver of an Audi, so that kind of suits my temperament, you know.

Oh yeah, happy to hear it.

Now, if you look at the value of the group, and we will not spend much time on this, but it's fair to say that most of the value in the Volkswagen Group is kind of tied up in the Porsche brand. What do you think that is telling us about the rest of the group?

With Porsche IPO, we have shown the value of the Porsche brand and we were able to unleash the potential of our brand with a very, very successful IPO with very difficult circumstances at this time. And the positive development shows what potential we do have in Porsche, with our robust financial profile. And in the Volkswagen Group, I think there is still a lot to improve in terms of the capital market value. And we have shown a very robust result in 2023, implemented a clear strategy, a clear restructuring plan, and this year we will bring over 30 new products to the market. And I think it has a lot to do with trust.

A big market for you is China. How do you see the Chinese market now?

In China, we see a big development in terms of innovations, a fantastic speed. And so for us, it was a clear decision in Porsche to build more technology and innovations in China. for China. For example, our Porsche Digital, to offer our Chinese customers the Chinese ecosystem, especially in terms of digitalization. We are very well positioned in China in the luxury segment.

What about the electric vehicle market in China? How do you see that? How do you see competition?

A lot of new competitors are entering the market. But most of them are more in the volume and premium segment. The luxury market for electric mobility isn't built yet. We have shown a market share of over 30% for the Taycan in the luxury electric segment. Now we are entering with a new Macan and the new Taycan.

When you drive the Chinese competing cars, what do you think?

They are very good in terms of digitalization. They are very good in terms of voice recognition. Some of them have very good advanced autonomous driving abilities. I think the Chinese have learned during the last decade to build cars. They are advancing very fast.

You mentioned digitalization. How important is the infotainment system in today's car?

More and more important. The customers expect their digital ecosystem. They use their mobile phones, for example. Therefore, in Porsche, we decided to have our own new board driven by Sajjad Khan. We care about all the car IT issues.

How do you see the battery technology moving?

The battery technology has seen a big advancement during the last years. Especially in terms of chemistry.

At the same time, you invest in e-fuels. What is the e-fuel?

We think decarbonization from a global approach. We take over responsibility and we think also to all the combustion engine cars around the world, but also chips and aircraft.

When we last met, you were super excited about the launch program for next year. Tell me about it.

That is the biggest launch program in the history of Porsche. We are now fully in the market with the new Cayenne. We have already had the market premiere for the new Panamera, then the new Macan in January in Singapore and 4 weeks ago we were able to launch the new Taycan and there especially the Taycan GT 4 completely new model lines for Porsche, and at the end of the year we are expecting a new 911. in the first time of the history with hybrids. We are renewing 5 model lines of Porsche of our existing 6, and that is a great ambition for our team, a great challenge we have to handle this year, but a great opportunity for our customers.

Which of these are you going to drive?

I am in a good position to test all of them. I love the 911..

It's good to be the boss.

That's a great advantage. The 911 I love and I own 911s, especially the new 911, and I test them with a hybrid engine, and the tremendous acceleration and still having the 6 cylinder boxer in the rear is fantastic. Today I am driving a Taycan, the new one, with more range in WLTP. we are close to 700 km of range, fantastic charging times, tremendous acceleration, and what you have seen with the Taycan GT is also on the racetrack. a very cool car with records on Nürburgring and Laguna Seca, and so both of these cars are fantastic.

Talking about the Premier League and coming back to motorsport, what are the innovations from motorsport that you are integrating into these new models?

Motorsport is the core of Porsche. we are counting 19 victories in Le Mans, for example. this year we were able to win the 24 Hours of Daytona, the heritage race in the US, and for us motorsport is the toughest testing field for our innovations. for example, the new hybrid for the 911 is a motorsport hybrid which came from the 918, but also the oil cooling we are using for our new battery systems we developed first for motorsport. the 800 volt system is coming from motorsport only three examples of what we are doing there.

Changing tack a bit and moving on to corporate culture. generally speaking, how do you feel it is to do business in Germany?

In Germany. we are in a situation where we are looking back to decades of success, welfare in the community, and that's not given for the future. it's like in sports when you win a cup, you haven't got the guarantee that you will win it the next year. and so that is the situation in Germany, always thinking about to fight for the success in the country. and so we have some circumstances which are not so easy to drive the business in terms of industrial regulations, energy pricing.

If you could change three things with the German industrial policy, what would it be?

First of all, our industry is driven by speed. we have a lot of regulations, not only in Germany, in Europe as well, to reduce regulations and coming to faster decision making in between politics and industry. then what we can change is the support for the industry, especially when you are investing. there are also decision making processes, but also subsidies, especially when you are going in new technologies, and that is important for Europe and for Germany to have a clear master plan on which new technologies we want to focus. then, in terms of electromobility, I think it is important, besides the new products the industry is bringing to the market, also to support in terms of charging infrastructure, in terms of new renewable energies.

You have a long tradition in Germany of very high union and employee engagement at board levels. what are the pros and cons of working in this way?

We are acting as a family, working together, and for me it is always important getting a close feedback, also from the labour side, and we are driving the companies together with an entrepreneurial spirit, and there counts the same as we talked about the politics, we shouldn't increase our regulations and agreement processes. we need the speed for taking decisions. I have a very positive experience working together with worker unions. when you deal fair and with full transparency, you can solve every problem, and that is my working experience of three decades, and that is how I am handling the process together with our partners.

You are CEO of two companies, both Porsche and Volkswagen. How does this work?

For me it was very important, when I have taken the decision to take over the responsibility in Volkswagen Group, to drive at the same time Porsche, because for me it is important to be very closely linked to technology, to processes, with a close contact to the people being able to take the right decisions on the strategic group level. It is a challenge, very clear in terms of organisation, but when you take the right priorities, it works. and now I am driving this for over one and a half year and up to now we haven't got a conflict in between. I think it is very supportive, driving both at the same time, and it is not new in Volkswagen Group that a CEO driving a brand like Ferdinand Piech or Martin Winterkorn have driven also the brand of Volkswagen. so I am driving Porsche and Volkswagen Group and my feedback up to now, after one and a half years, it works perfectly and is supportive.

Do you have to change the way you behave when you go from one company to the other? Do you have a Porsche cap and your Porsche shoes, and then you move room and you put on something else?

Leading both shops is very different. In Porsche I am very deeply involved in the operative processes and Volkswagen Group is more strategic. there I am leading 12 brands and the technical issues are similar, but in the end I have partners, CEOs of all brands, who are responsible for the other brands and we are taking more decisions how we can improve our scale effect in between the brands, how we are driving together the performance programs and taking strategic technology decisions. and there it is very helpful that I am very closely linked to the car business and being able to evaluate technologies and taking these decisions. so both of these jobs are very different one is more operative and the other one is more strategic.

When you are so involved with technicalities and the technology in Porsche, how do you avoid becoming micromanaging the whole thing?

It is all about priorities. I am used since many years to work with a so called top 10 plan what are the most important topics to solve in a year and that helps to focus on the right things, and I implemented this systematic, and that is not important. if you are talking about 10 points, 5 points, 7 points, you need the right priorities and, beside of this, this is embedded in a long, lasting strategy, and I built my strategy in terms of 10 years, so I have a clear focus where to lead the company, but also with the operative program, year by year, with the right priorities.

I know that you are skiing from time to time with Axel Lundsvindal, my fellow Norwegian guy. he is one of the best skiers of all time. so I asked him how your skiing was and he said you were pretty fearless and very fast. so is that the way you run the company as well?

I love it to drive fast, and Axel is a great skier but also a great person. he is the ambassador of Porsche and I love to be together with him, and also on the racetrack. he is a great racer and that combines us. we are coming from sports and I love to drive the company like a sports team focused on performance and speed and, on the other side, on team spirit, working together, helping each other, winning and losing together and taking the right decisions with the same mindset.

I asked him whether you skied faster than a Porsche and he said thankfully not, so I guess that is the good news.

I spend the most time in my professional life in production, so I am still very closely linked to especially people in production and when I am walking around in the factory, there is still a very close contact and people there tell you the honest things and the truth, what is going on in a company, and that is very important for me and I think, as a CEO of a company, it is very important to be touchable for the people.

you have a PhD in mechanical engineering. do you think you would have had the credibility with your colleagues if you didn't have that?

at the end is your input in the company and the impact you have. for me it was a good opportunity when I started working at Audi doing a parallel PhD, and also I did it in China over 20 years ago, and it was a great experience as a young man going to China and feeling the engineering and innovation spirit they started in these times with electric vehicles, where nobody else thought in the success of electric vehicles, and so for me it was a great experience working there in the automotive institute of Tongji University in Shanghai. but in terms of credibility it helps to understand and to deep dive into technologies. but at the end it's more important how you act, how you decide and how you work together with the team.

how much do you work?

a day, around 12-14 hours.

and in addition to skiing, what kind of things do you do?

I used to play soccer and now for me, I prefer to run to jog and then mountain bike. biking is my favorite sport and sometimes I'm going to play tennis.

Olli, we've got tens of thousands of young people on the podcast here, so if you were to give them an advice and that's not to go and save up to buy a Porsche but something else, what kind of advice would you give them?

I'm in the situation as a family father, I have two daughters and they started the last years studies at university and I told them listen to your heart, what you want to do, and, when you love things, your passion for them, and at the end they are coming with the right results. and that was also my spirit in my whole career, and that's my advice to young people when they start a career. for me, it's impossible to plan a career and always focus what you are doing at the moment and at the end the success will pay off.

Olli, it seems like you have certainly listened to your heart and a lot of engines also, I suspect, during the years. big thanks for being on and good luck.

Thank you very much, Nikolai, for the good talk, and thank you very much for the great partnership and the Porsche stocks.