[INTERVIEW] Volkswagen Group Korea focuses on EVs and infrastructure

Volkswagen Group Korea Managing Director Till Scheer [VOLKSWAGEN GROUP KOREA]

Volkswagen may be arriving late to Korea's burgeoning electric vehicle (EV) market, but now that it's ready to join the competition, the German brand is determined to do it right.

Doing it right, according to Volkswagen Group Korea Managing Director Till Scheer, means ensuring the correct infrastructure and training is in place before cars hit the road.

Scheer, who oversees management of Audi, Volkswagen, Bentley and Lamborghini in Korea, was appointed to the position last October.

While imported carmakers have been rushing to launch new EV models in Korea for more than a year now, Volkswagen is only just getting ready to launch its first all-electric model, the ID. 4, here in the latter half of this year. Audi had launched its first all-electric e-tron two years ago in Korea.

“We are introducing EV models to the Korean market at the right time,” said Scheer in a recent interview with the Korea JoongAng Daily.

“Infrastructure will also make things happen. Training specialists and setting up service centers that can repair EVs is part of the initiative to be 'EV-ready'.”

Setting up infrastructure is a key part of Volkswagen Group Korea’s EV strategy here.

The group will focus on installing EV chargers across the brands’ dealer network instead of setting them up in public spaces such as shopping mall parking lots or gas stations.

“Korea is way ahead of other countries in terms of public charging,” Scheer said.

“At the moment, we are focusing on installing chargers and rapid chargers at dealer network. Our goal is to have 23 percent of chargers at dealers as 150 kilowatt rapid chargers. Currently, we have 49.”

According to data from the International Energy Agency, Korea tops the list of countries ranked by the number of public charger per EV, at 0.47.

Training EV and high-voltage battery specialists to handle rising sales of EVs is another way Volkswagen Group Korea is preparing for the electric future. It plans to train 587 EV specialists and 122 high-voltage battery technicians to improve after sales services.

Scheer also said it is looking into the possibility of sharing chargers among its four brands.

When asked about the delay in the launch schedule of the ID.4 and Audi's Q4 e-tron, both of which started their marketing last year, Scheer blamed the semiconductor shortage, the pandemic and the recent conflict between Ukraine and Russia.

"We are still suffering quite significantly," Scheer said. "[The delay] started in early 2021. Volkswagen Group has formed a task force that is working in order to support partners and to improve the situation."

Nonetheless, Scheer said priority is given to the production of EVs which require more parts, such as semiconductors and batteries, compared to internal combustion engine vehicles, to better cope with the rising demand for electric mobility.

EVs have lead Volkswagen Group Korea to tighten its business partnerships with Korean suppliers, including battery makers such as LG Energy Solution and Samsung SDI.

"As a group, we have 70 partners in Korea, mainly for purchasing items," Scheer said. "Last year, the group's purchasing volume from Korean suppliers recorded 103 million euros ($114 million)."

When asked about the recent talks between the Volkswagen headquarters and Korean battery makers on collaborating on the production of prismatic batteries, Scheer said "discussion is certainly underway," but didn't give further details.

Volkswagen Group last year announced it would produce its own prismatic batteries to reduce reliance on battery suppliers. The news came as a shock to Korea's battery makers — especially LG Energy Solution and SK On — both of which mainly produce pouch-type batteries for Volkswagen. The two companies recently announced that they are considering manufacturing prismatic batteries for EVs.

Scheer has a lot on his hands at the moment as sales of Volkswagen and Audi, two of the group's biggest brands in Korea, are showing slower-than-expected sales recovery.

Volkswagen and Audi used to easily rank in the top five imported carmakers, selling more than 30,000 units per year in 2015 before the so-called dieselgate. Their sales have been gradually improving for the past couple of years, but have not returned to the same level.

Volkswagen sold 14,364 units last year, down 18.5 percent from a year earlier.

Audi sold 25,615 units, up 0.4 percent.

"It is true that sales numbers were higher in 2014 and 2015 due to reason we all know why," Scheer said.

"We had some sales stop that didn't allow us to perform fully in this market. We are improving the homologation process to launch models that we need to bring at the right time.

"We want to introduce more models and cover more segments in Korea."

Volkswagen Group Korea plans to launch 22 new models from its four brands this year, five of which will be all-electric.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]