At Mercedes-Benz’s stand, the automaker had a mocked-up electric version of its experimental C111 supercar from 1970.
BMW’s Neue Klasse deliberately recalls its groundbreaking line of cars from the 1960s, and VW displayed the GTI electric-car concept, evoking the sporty version of the Golf.
With Blume now in the job for a year, the contours of his response to the alarm bells from last October are taking shape. The effort involves a host of new partners, a third try at a competitive electric-car platform and overhauling management at Cariad — VW’s in-house software developer that has failed to keep pace with Tesla and other rivals.
“Every company has to start with itself — to innovate, to develop and at the end to perform,” Blume said at the auto show in Munich. “It’s up to us.”
The most aggressive move was paying $700 million for almost 5 percent of Chinese automaker Xpeng.
The stake in the money-losing company, which is not in the top 10 for EV sales in its home country, was the price VW was willing to pay for access to a technology platform to help fast-track its mainstream electric-car offerings. It was widely taken as a last-ditch attempt at a turnaround.
Already with three joint ventures in China, the Xpeng deal was preceded by new cooperation agreements with a battery maker, an autonomous driving specialist and an infotainment developer.
The expanded roster of Chinese partners piles on complexity and deepens entanglements in a country increasingly antagonistic toward the West.
For the 55-year-old Blume, who has been at VW since joining a trainee program in 1994, the approach sticks to a familiar playbook: When in doubt, expand. It’s a common strategy for a group that operates 10 brands and counting.
VW is structurally skewed toward expansion, with the main power players keen to protect their turf and agreements often requiring time-consuming horse trading.
There are the descendants of Ferdinand Porsche, who created the concept for the iconic Beetle and are keen to keep dividends flowing; VW’s home state of Lower Saxony, which has a special blocking minority; and the company’s powerful works council.
“VW is like a big tanker ship that needs time to make a turn,” said Mathias Miedreich, CEO of Belgian manufacturer Umicore, which has a deal to supply the automaker with battery materials. “Once the tanker ship starts to turn, you cannot stop it.”
The inclination to grow to fix a problem is also evident in VW’s efforts in the U.S. The German automaker has struggled to play a major role in the market ever since Beetle mania faded in the late 1970s.
The latest push includes a new $2 billion factory in South Carolina to revive the off-road Scout brand, which has been dormant for four decades.
Beginning in 2026, the plan is to make battery-powered SUVs and pickups as a retro-themed answer to Tesla’s Cybertruck and models from U.S. EV startup Rivian.
VW’s messy transition to EVs has its roots in the diesel-emissions cheating scandal. For years, the company had pushed “clean diesel” as a fuel-efficient alternative to plug-hybrids, only to eventually acknowledge that those claims were bogus and millions of its vehicles had emitted illegal amounts of pollution.
The revelations tarnished Germany’s reputation for engineering prowess and triggered a catch-up strategy under Blume’s predecessor, Herbert Diess.
The former BMW executive, who joined just before the diesel-cheating revelations, vowed to carry out historic change, but he ruffled feathers, especially at VW’s works council, while software issues caused new models to flop and others to get delayed.
In early 2022, as pressure on Diess grew, VW hired McKinsey to help figure out a plan to fix Cariad.
Developers from Audi, Porsche and the software unit struggled with infighting due to brand allegiances and were overwhelmed by the task of building out two new platforms — one for Audi and Porsche and another for other VW Group brands.
Ineffective top-down decision-making and managers with no experience overseeing software development made the situation worse.
Diess wanted to disrupt VW’s culture — zipping over the water of the Wolfsburg factory canal on a hydrofoil and donning a Batman mask to promote new models — but by last summer, his shock-and-awe approach had outlasted its welcome.
