Executive Meeting with Alberto Teichman

Spain needs to be put on electric wheels

• As Alberto Teichman points out, the automotive sector has changed more in the last five years than in the last three decades.
• The industry accounts for 10% of Spain's GDP and employs 2 million people.
• "Developing a high-powered charging infrastructure, with sufficient capillarity and capacity for buyers to lose their fear of purchasing an electric car model is essential".

In this fifth and final interview of the 2023 Executive Meetings series, Dr. Casilda Güell, the dean of the school, has engaged in a dialogue with Alberto Teichman, General Manager of Volkswagen Commercial Vehicles, regarding the current state of the automotive industry and future challenges, undoubtedly shaped by electrification and digitization. Teichman believes that in the last five years, the sector has undergone more changes than in the past three decades, considering himself fortunate to lead this transformation. "We are shaping the mobility of the future," he asserts.

The automotive sector accounts for 10% of the Spanish GDP (1.5% for Volkswagen) and employs 2 million people, exerting a significant influence on the economy. It serves as a clear indicator of the country's status, given that 80% of commercial vehicle purchases are made by companies. It's not surprising that many companies closely monitor the automotive sector's evolution when formulating their strategies.

Before the COVID-19 pandemic, sales were nearing 200,000 units annually. However, between 2020 and 2022, this figure dropped to 140,000. Alberto Teichman anticipates a substantial recovery, reaching 190,000 vehicles per year by 2025. Specifically, he believes Volkswagen will emerge strengthened, as the company strives to become a leading brand in sustainable mobility for both passenger and freight transport. Teichman explains that the Commercial Vehicles division is currently experiencing its most expansive product cycle in the brand's history.

Spain is the ninth-largest car manufacturer globally, the second in Europe behind Germany, and the leading van manufacturer. However, to remain competitive, Teichman deems it essential to put "Spain on electric wheels," meaning electrifying it to attract investors. Developing a high-power charging infrastructure with sufficient coverage is crucial for dispelling buyer concerns about electric vehicles. Currently lagging behind Europe in this regard, Teichman emphasizes the importance of collaboration between the public and private sectors, as well as energy and automotive companies. He believes that without ready infrastructure, attracting investors is challenging, and any effort will be in vain.

The sector's commitment to sustainability

When asked about low-emission zones increasingly present in cities, Teichman believes that automotive companies are committed to improving air quality, and these zones can be helpful. However, he urges for coherent, understandable, and accessible guidelines for citizens.

He also emphasizes that the main cause of pollution is the aging vehicle fleet, averaging 14 years in Spain, putting it at the bottom in Europe. In this context, rejuvenating the fleet becomes crucial, incentivizing buyers and implementing tax benefits for companies renewing their fleets, especially as e-commerce boosts cargo distribution.

How will these changes affect users?

The ongoing changes in the automotive industry will bring new purchasing formulas. Electrification, as mentioned earlier, will be one aspect, but there will also be a shift from vehicle ownership to pay-per-use models. Digitalization will play an increasingly significant role, with software differentiating between various vehicles. Teichman believes that it will eventually become more important than the propulsion itself.

Furthermore, there will be an increase in multimodal mobility, with private cars and public transport complementing each other, along with the rise of micro-options for sustainable mobility. Teichman particularly highlights the evolution of autonomous vehicles, which will allow pedestrians to reclaim a significant part of the city. "Autonomous mobility will bring the real change, even more than the transition to electric cars," he concludes, affirming that Volkswagen will play an active role in developing technology for autonomous freight transport.

After two decades in the industry, Alberto Teichman has learned three fundamental things: firstly, managers must acknowledge that the formulas leading to past success may no longer be effective in the future. "We have shifted from being car manufacturers to mobility providers," he states, recognizing that today's customers want and have the right to enjoy individual mobility, extending beyond purchasing a vehicle every eight years. Secondly, companies are no longer merely profit generators but also have a social role that young people demand; not everything is acceptable for profit. Lastly, in an unknown transformation context, it is crucial to embrace tolerance for error. Teichman believes in experimenting, measuring, modifying, retesting, making mistakes again until achieving something that works, and then scaling it. He stresses the importance of being democratic in decision-making but disciplined in execution.