Exclusive: How Volkswagen CEO will rebuild brand

A German walks into a bar in County Wicklow. Barman says: “You new in town?” The German says: “Yes, I’m Thomas, and this is my wife, Wendy, and we just moved to the stables down the road.” The bar goes quiet. The barman rings a bell and shouts over the music: “Everyone, this is Thomas and Wendy and they’ve just moved into the stables down the road. Say hello!” The CEO of Europe’s biggest car brand has just met his new neighbours. Who is Thomas Schäfer? Although he has been the boss at Volkswagen for just a year, Marburg-born Thomas Schäfer was already well known as the charismatic and personable ex-CEO of sibling brand Skoda, where for two years he played a core role in cementing a wide-reaching reform of the Czech brand’s line-up and positioning, centred on the people-pleasing attributes of utility, charm and affordability. He took the VW brand top job as part of a corporate shuffle caused by the departure of the rather more enigmatic ex-VW Group CEO Herbert Diess – whose forced exit from the Wolfsburg company last year is widely attributed to spiralling delays and shortcomings at the Cariad software division he founded, and whose legacy will never quite be detached from the criticisms of inutility and charisma deficiency directed at cars launched under his supervision. Incongruous though it may seem that the CEO of a global automotive powerhouse based in Lower Saxony should have settled in the wilds of eastern Ireland, Schäfer explains that he’s well used to the commute and has achieved an idealistic work-life balance that ensures he’s able to enjoy every moment he’s not cooped up in a boardroom, poring over sales figures and product cycle plans. “It grounds me,” he says, speaking of life at home on the ranch. “Here [in Wolfsburg], you are in the system. You’re 24/7 online. The system sucks you in in the morning and spits you out at night, and that’s fine. But when I come home, it’s me and my family. It’s normal.” More than normal, in fact: “nobody cares” about his job title when he’s drinking a couple of pints of Guinness at the local (never anywhere else, mind – “I love it, but it doesn’t travel”). “I’m talking to the farmer from next door and the baker from the village, and it doesn’t matter,” he says. “They don’t care, you know. I’m just Thomas from next door.” The local life is “good for the soul”, adds Schäfer, shocking with the revelation that “I really try not to work on weekends. I do all my emails on the trip – working to the last minute, then I’m done. And on Monday, it starts again.” This from a man who oversees a company selling vehicles in more than 150 countries worldwide, with 23 model lines on sale in Europe alone and with 200,000 employees under his command around the globe. Schäfer, rounding up a “whirlwind” first year in the job, knows he faces a battle to steer the brand back into the public’s affection, but he is a firm believer in the enduring power of Volkswagen’s historic mass appeal. “When I first came in,” he says, “my absolute passion was for the brand, and to get the brand back to where it belongs – to the hearts of the people. Real Volkswagen again. A love brand. What do we need to do to get back to that status again?” He felt that ‘love’ most strongly from 2015-2020, when he was managing director of Volkswagen Group South Africa: “Whenever I’ve travelled anywhere in the world, specifically in Africa, I’ve always had people say to me with a smile: ‘Oh, you work for Volkswagen. Great! I had a Volkswagen…’ People love it. So I said: ‘Okay, how do we get back to that? What do we need to do? How do we sharpen our design? How do we get the user experience back in charge? How do we get advertising back?’” In just the 12 months since he arrived in Wolfsburg, Volkswagen has revealed the ID 7 saloon, long-wheelbase ID Buzz, acclaimed ID 2all supermini concept, updated Touareg and T-Cross, and near-finished prototypes for the crucial next-generation Tiguan and Passat. Plus, he has already made the headlines for slamming the counterintuitive and near-unusable touch controls introduced in some of the brand’s cars over the past few years, publicly rallied against the onset of costly Euro 7 emissions legislations, branded talk of using synthetic fuels in passenger cars “unnecessary noise” and hinted at plans to overhaul Volkswagen’s model naming strategy. There’s no doubt that Schäfer’s been a busy man, and perhaps understandably his near total upheaval of everything Volkswagen was doing until 2022 was met with some trepidation from his colleagues. “It was difficult at first,” he says, “because the team was like: ‘Shit, this guy’s criticising. What’s going on here?’ But I’m not looking backwards. That’s not my point. My point is: move on. What do we need to do now to get, in the next two or three years, back to where we should be? And they could see that I actually mean what I say after a couple of interactions.” While acknowledging that the brand has done itself a disservice in some areas in recent years, Schäfer is not here to play the blame game. “It’s not about finding who did something wrong. I’m not like that,” he says. “But you’ve got to move on, and we had to move on.” What’s on his to-do list? First and foremost, says Schäfer, Volkswagen must realign itself with those connotations of freedom, cheerfulness and universal accessibility cultivated by the Beetle, Type 2, Polo and Golf. From an enthusiast perspective, Volkswagen will no doubt be an easier brand to ‘love’ by virtue of its commitment to traditional hatchbacks, saloons and estates in an era when it seems these segments are being starved to death by the global car-buying public’s insatiable desire for SUVs. The company will continue to field competitors in the crossover sphere – it has to, of course – but much-loved models like the Golf, Passat and Polo will be replaced (at least in spirit) by slick, low-riding EVs. “Not everything is an SUV,” says Schäfer, hinting at the shape of Volkswagen’s future line-up. “SUVs are obviously a trendy segment, but the flatter, more aerodynamic vehicle with enough space is still a very interesting segment that you cannot leave open from our point of view.” Schäfer will also strive to ensure these models – and their SUV stablemates – are easier to live with, by fixing the reputational “damage” wrought by the introduction of tricky interior control faces and buggy software in Volkswagen cars in recent years. “We had frustrated customers who shouldn’t be frustrated,” he says of the reaction to unlit temperature control sliders and unresponsive haptic touch buttons. “We’ve spent a lot of time now – working through really systematically – on what all the functions are that a customer usually touches when using a vehicle.” The new Tiguan, with analogue switches on the steering wheel and a centrally mounted rotary dial for drive mode selection, embodies Schäfer’s commitment to ensuring his firm’s cars don’t irritate their owners, and he promises that the upcoming ID 2 and its future range-mates will be “top-notch” in this regard. “Buttons on the steering wheel – crazy, right?” he jokes. “You hear it and you hear it, and eventually you have to act on it. You cannot just leave it and say: ‘Oh, well. They’ll get used to it.’ No.” But more crucial to Volkswagen’s ongoing viability is deciding how exactly these cars will be propelled in the short to medium term, because the implementation of strict Euro 7 emissions regulations in 2025 will make it all but impossible to profitably sell cheap petrol and diesel cars. While Volkswagen has already committed to going all-electric in Europe from 2033, and will launch its final combustion car – the next Volkswagen T-Roc – in 2026, combustion cars still have a huge role to play (not least because Volkswagen recently cut back EV production, citing “strong customer reluctance”). Electrifying the brand’s entire line-up is a mammoth task, and one that must be achieved in what is actually quite a tight time frame. But Schäfer is convinced that a comprehensive ICE offering, for now, is crucial for maintaining mass appeal. “We believe that the transition is not going to happen overnight, and these vehicles [new Tiguan, Passat and T-Roc] will go well into the 2030s,” he says. Whether that means the Polo can survive is unclear at the moment. “I don’t want to switch it off prematurely, because of customer demand,” says Schäfer of the supermini’s potential demise – which he previously hinted would be an inevitability if Euro 7 drives the price of combustion cars up by as much as €5000 (about £4300), as he has forecast. “Ideally, the Polo is still good to go into 2026 or 2027 – and it’s the same for T-Cross.” But in any case, similarly positioned and competitively priced electric replacements for these cars are in the pipeline because Volkswagen remains committed to building ‘people’s cars’ (it’s in the name, after all…) even if a revival of the Beetle is categorically off the table. “Volkswagen has always been defined by coming up with new technology and making that technology affordable,” says Schäfer. “We’re not always the first in inventing technology, but we made it available to the masses, with good quality, in the volume segments. And we’ve got to keep pushing this.” Why is he the man for the job? “Good question,” replies Schäfer, unfalteringly humble and somewhat taken aback. “I guess, in my life, I was always able to bring good teams together, and I’m a very brand-focused person. Brand is everything. That’s what the customer experiences and sees. “I had a similar situation when I came to South Africa: the brand was a historic brand, super well loved, and it had lost its shine in 2015. And we had to build it up again and get the excitement back. Apparently, I did quite well.” Which is why he then found himself heading Skoda, where his cool, calm and collected approach to brand building helped to bring cohesion to confusion – “we were a little bit all over the place” – and promote the Czech brand’s cars as a fashionable (not just affordable) alternative to the historical mainstream stalwarts. “Focus, bring the team together, and bring the brand up” is his mission statement at Volkswagen. “I love the brand,” he says. “I know what it can do. I have experienced it all over the world, and I’m very convinced that this brand can be brought to shine again very quickly. It’s just a matter of focus, of working on the right issues and getting the team activated to work on it.” I ask him what the Volkswagen of 2030 will look like. He laughs. “We will be electric. We will have buttons…” But more seriously, he theorises, that is the point at which the company is “basically through this transformation” and the “double stress” it is enduring at the moment will be over. But for now, it is all systems go to get the brand ready for the electric era. “I think the world is turning quicker than we all thought,” says Schäfer, “so in the next three, four or five years, we’ll see enormous speeding up of the transition into 2030. I hope and believe that.”