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‘There is uncertainty, and that is why it is time to invest’: Steffen Rei

Between the impact of the pandemic and more than 40 months of continuous decline in sales of new cars in Mexico, the recovery of the auto market will not be as fast. Faced with this scenario, the lever of development and Volkswagen’s commitment in the country will be the Mexico, United States and Canada (T-MEC) treaty, anticipated Steffen Reiche, president of the Executive Council of Volkswagen of Mexico and head of North American Region Production .

In an interview with MILENIO, Reiche explained that the T-MEC will represent many changes within Volkswagen, but also a great opportunity to grow in the three countries with new suppliers that will contribute to comply with regional content.

Volkswagen is the fourth largest producer and exporter of vehicles in Mexico and the third highest-selling brand. With two plants in the country, Puebla and Silao, which generate around 13,000 jobs, this year the German firm will celebrate its 65th anniversary in the country.

What is VW’s strategy to recover the market?

For us it is very important to continue with the very long tradition that we have here in Mexico; the brand will be 65 years old and we have always proven to be competitive. We always want to convince customers with our products. The latest new product is the Taos and we want to start producing in the last year in Puebla, and I think this product is a very strong indication of the skills we have.

What are the challenges facing the market this year?

With the health emergency we have registered that the market has dropped a lot, for all 30 percent, so it is very difficult to find clients who have the stability to buy a car.

We do not see a recovery very soon. Compared to other markets, it is very special here in Mexico, that is why we need to adapt with very detailed offers to our clients. We need to review our portfolios to deliver cars that are reliable for customers, reliable for the price, but also for the technical needs, for us it is very important; with Taos we deliver a very modern car, with all the technology that we have these days.

Are there new investment plans for Mexico, what can we see in 2021?

We celebrate here in Silao the first new engine that we are going to deliver in our Jetta, in Taos. It is a 1.5 liter machine with good performance and this is the last investment, we have also invested in Puebla, in Taos, and we continue to invest and modernize our plants to the needs we have. These days I think that is a great commitment to continue, to invest, because there is uncertainty and that is why I think it is a great moment for VW to continue working here in Mexico with effort and speed.

With this new engine, what market are you planning to conquer, what are you betting on?

In recent years we have managed to produce 450,000 cars each year, now it is less due to contingency, so it is very clear that we have clients all over the world.

We deliver in Mexico and throughout Latin America, a very large market in the United States and Canada, but we also export to Europe and to the entire world with our Tiguan, for example, it is a product that we deliver to all customers.

We have a tendency to reduce carbon, that engines are going to be more efficient, we have to take care of the CO2 that we emit, that is why this engine is the most modern that we have to comply with all environmental laws. That is why we think that we are capable of exactly complying with the laws that come, with the challenges that come, due to environmental issues and I think it is a good opportunity to close the phase that we now have between fuel cars and new cars. of batteries. We have to take care that fuel consumption goes down to comply with the laws.

When will we see the first electric vehicle from Volkswagen in the country?

At Volkswagen as a large company we now have the Audi ETron and Porsche Taycan.

The difficulties in introducing electric cars at the moment are two or so. One is the price of cars because they contain the battery, which is a very important part and the prices for these are still very high; We have strategies to meet customer expectations here in Mexico, it is one reason, and the second reason is connectivity, for our modern cars we need to have a very intense connectivity, a very stable network is necessary to deliver all the skills of these cars to our customers. It is an infrastructure that we do not have in Mexico and this is the greatest challenge. That is why we have decided not to and we are working very hard to deliver these cars here as well in the coming years.

Have you talked with the authorities about the measures to reactivate the internal market?

It is a very difficult question, everyone has their feelings of how we receive support from the government in the markets. These days it is very important for us to have very stable rules, we have many emission rules in Mexico City.

We have a need to have stable rules, we are very concerned about what is happening now in Mexico City, that you need to have a double zero sticker, that will change and here stability is the most important thing.

In my opinion, we need to stabilize to have or to gain growth for all of Mexico. I think we have many opportunities, for example with the T-MEC. Many of the companies need to provide new suppliers and that is why I think it is a good opportunity for Mexico to grow in the industrial sector and to create more jobs and create a market that grows and develops.

What is the strategy to comply with the T-MEC?

Volkswagen is very clear to comply with the laws, weeks ago we have complied with them, we have delivered our plans, we have now agreed with the three governments (Mexico, the United States and Canada), I think each of the brands has done something similar. It is a great challenge for us because we have to change a lot, but as always we will have the laws, the rules that exist and, on the other hand, with all the changes that we make as a large company.