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Interview: Seat boss Luca de Meo on the future of the brand

Interview with Seat boss Luca de Meo
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Z ur person: The Italian Luca de Meo (51) has been working in the automotive industry for over 25 years. After positions at Renault, Toyota and the Fiat Group, he moved to Volkswagen in 2009. There he was first Head of Marketing before joining Audi three years later as Board Member for Marketing and Sales. He has been CEO of Seat since November 1, 2015 and is also a member of the supervisory boards of Ducati and Lamborghini.

Mr de Meo, the Seat Minimó celebrated its world premiere at the Mobile World Congress and will also be at the Geneva Motor Show shown. When will we see the vehicle on the road?

If we decided that tomorrow, we might need two or three years to bring the car onto the market. A good sign is that a lot of people are asking me this question. People are really waiting for us to bring it to market. In fact, this is our first attempt to see how this concept works. And people seem to make sense of it. Not just the media, but also the customers and, above all, the mobility and car sharing platforms. This confirms what we set out to do six months to a year ago when we came up with this concept.

Mobility platforms such as car sharing providers must pay particular attention to low costs. You talk about reducing both production and maintenance costs by 50 percent with the Minimó. How is that supposed to work?

First you have to understand that the cost calculation works differently here. You have to put them in relation to other electric cars that are used for mobility platforms today. Compared to them, we can cut the costs in half. But it's not so much about the 50 percent value. This is about the cost per kilometer. With this car, you are on par with public transport. At this point you get individual mobility at the price of public transport. If we can do that, the whole thing will go through the roof. And we know we can do it.

What role does the replaceable battery play in the bill?

A big one. There are three cost blocks for mobility platforms. First: parking fees. Second: personnel costs. Because people are still needed today who drive the cars from right to left or to the charging station - where, by the way, they have to fill up with electricity for hours and don't earn any money during that time. And third: the pure onesProduction costs must be amortized. So if the material costs are only half as high as a normal car, because it does not have the same performance and functionality, because it is reduced to the minimum, then we can offer really inexpensive mobility.

You are often asked about the similarity to the Renault Twizy. What do you think about it?

Of course, the shape is similar, after all, the Twizy is the only available concept of this type so far. But the similarities between the Minimó and the Twizy, for example, are really limited to these four wheels, the electric drive and the 1 + 1 seat arrangement one behind the other. But then our pages are closed, the battery is replaceable, the car has 5G connectivity and you sit about as high as in the Seat Arona, i.e. at SUV level. So it's a different package. And don't forget: The Minimó is prepared for autonomous driving.

Seat will take on the leading role in the group in the field of micromobility. How exactly is this role designed?

There is a great variety of brands in the Volkswagen Group. That is why it makes sense to give everyone their own task so that each brand can focus. We decided to take on this part. We will concentrate on ideas that cover mobility over short distances of up to five or six kilometers. These make up the majority of mobility within cities. Other ideas, such as our eXS powered by Segway electric scooter, which we presented last year and which is now coming onto the German market, aim in this direction. Then everyone in the group can take advantage of the things we have thought up and developed. We can also fall back on all of the Volkswagen Group's technologies at any time. Be it infotainment systems, platforms or components. I think this gives us a chance to position ourselves in this internal VW market.

Are we dealing with an internal open source concept here?

Exactly. Our digital boss Fabian Simmer has already presented our ideas to his colleagues from the other VW brands and some of them were surprised how quickly we grew into this role. Ultimately, it's about ideas. And I'm glad that Seat now provides more ideas, suggestions and products than problems. (laughs)

What freedoms does the corporate headquarters in Wolfsburg give you? Can you think and develop freely?

We are relatively free when it comes to ideas. But of course at some point we come to a point where tough decisions have to be made about investments and budgets. But that's a normal process in the group that everyone goes through - regardless of whether it's a small or a large brand. And whether we can investdepends in large part on whether it can be profitable. If that's the case, there's no need to stop.

How will Seat's mobility service differ from others? What makes it unique?

It could be that the mobility services are similar to the airlines. Today, all airlines fly almost exclusively models from two aircraft manufacturers. They are just painted differently and the services on board differ. In the airline business you can still create a completely different brand experience, even though all airlines use the same Airbus. That depends on whether you operate a cheap or premium line and is regulated by the different price. We have to learn from this type of branding.

And are there any ideas in which area Seat wants to establish itself?

With the Minimo we can do one Be an alternative to local public transport when we get to its price level. And we want to encourage people to switch from two-wheelers, especially here in southern Europe - because two-wheelers have a safety disadvantage. That is our focus within the Volkswagen Group. We have to be the brand for young people. The brand that gives you access to mobility. That is our role in the VW Group. After that, they might switch to Volkswagen, Audi or Porsche if they are lucky in life.

The often cited cultural change in the auto industry now seems to be taking place. How would you describe it?

I now see the understanding in the automotive industry that we need new concepts if we want to make mobility platforms work and make them profitable. You need something like the minimó. Something like the Sedric from Volkswagen , where you can distribute the costs per kilometer between five or six people. Likewise premium cars. They will always be in demand because there will always be people who want better service and want to drive around in an Audi, for example. And then you have vertical mobility (meaning air taxis and the like; d. Ed.) And city delivery vans.

What makes the mobility change so difficult for car companies?

I do think that the auto industry has to handle the most difficult part of the mobility change. In the near future, we will for the most part still be dealing with our traditional business. And we have to both develop and produce the new things. In addition, many do business related to the auto industry. But now we have the opportunity to integrate new revenue fields into our value creation. We have to use that!

How exactly?

When new mobility platforms are used, you can limit yourself to only providing them with the vehicles they need. Probably less than today because fewer vehicles will be needed overall. Or you can decide to operate the platform in addition to the vehicle. In addition, the vehicles provide data that can be the basis for further business.

The profit can come from three pots. Is every pot equally interesting for you or would you prioritize?

The auto business is the easiest for us; we know its logic and know how it works. With the mobility platform, it depends on whether you have the right product available. If so, and the Minimó could be that product, then that's interesting. In terms of data, it is still difficult for me to grasp exactly where the money is.

Why that?

First of all, you have to between the customer data and them of the car. I would choose the latter, because with customer data you have to observe a lot of rules and pay attention to data protection. Nevertheless, it is still questionable whether the car data can be interesting at all. For example, if I have a connected car and am able to improve its performance or functionality, then I know that it is of value to customers and they are willing to spend more or less money on it. I realize that this is a potential business. But I'm not yet one hundred percent sure how to operationalize that. I know how to create a connection between our product and the user's smartphone, the other cars and the infrastructure. But I still don't know which business is more valuable than the other. And I don't know what business can be monetized by the OEM or by other companies that are part of the game.

The tech and telecommunications companies are very interested in the data.

If you ask the people at these companies, what we're doing right now is Mickey Mouse-like compared to downloading a Netflix episode. That is why we ask ourselves what exactly a business field offers us. Only when we know this can we prepare the car for it and develop functions that are actually relevant for the customer. And so for us as well as for our telecommunications partner. It has to go together. But this discussion is only just opening up.

What is the aim of the open innovation platform that you presented at the Mobile World Congress?

Some are working there large companies from the telecommunications, energy supply, infrastructure or banking sectors. There are a lot of smart people, a lot of ideas and a lot of money within the digital transformation. But they work in some areasindividual companies on the same things. So we agreed that we would share our developments with the others - without going into too much detail, of course. Why should we do this in parallel? Let's use synergies!

What role do start-ups play in this?

We offer domestic and international start-ups three or four times a year, to provide us with ideas on how to approach these challenges. Usually everyone just has tunnel vision. You're so busy with your own stuff that you don't look left or right. But challenges such as digitization or improvements in the environmental sector cut the industry horizontally. So if you don't have a mechanism to look right or left, you don't see the whole picture. So this is a good thing. But of course we have to see if it delivers results.

One more question about your everyday work: How firmly are you still stuck in the old world and have to decide, for example, which engine goes into which model or not? And how often does one look into the future?

At this point in time it is still 70 to 30. I would like to look more into the future, but of course the normal business for it is still clear too dominant. We have practical problems of all kinds to solve: in production, in procurement, in development. I have been working in this industry for over 25 years. And I initially thought that at the age I am now, I would be bored. It's just not my character to be responsible for car model number 60 or 65. But the truth is, the whole topic has changed completely in the last few years and I'm learning a lot more every day.

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