Exclusive Interview with Volkswagen's Diesel Maven
The Auto Channel's Mark Fulmer talks with VW's self-professed "Diesel Dork" about the Volkswagen Jetta Diesel and other diesel issues.
Male: Hi, we’re at the media center here at the Mazda Laguna Seca and
we’re sitting with Volkswagens Keith Price who is going to tell us
all about Diesel. So Keith, tell us what is the thing with the
Volkswagen and the clean diesel?
Keith: Thanks so much. I’ve got to tell you. We’ve sold 840,000 Diesel
vehicles in this country since 1977. Thirty years ago, if you bought
a Volkswagen rabbit with a diesel engine, you’re a chip’s gate. It
was all about as many miles per gallon as you could get and it was
all about keeping money in your pocket. Fifteen years ago when
we launched TDI technology combining turbo charging, some
electronic control, and emission controls, we started to see a
different diesel buyer. These were the consumer savvy. They look
at their cars at commodity investment. They read consumer
reports. They knew that they could drive it for a couple of
automotive life times and still have a lot of car left for resale value
at the end of that equation. Now, we can legitimately present this
technology as a green thing. So, the art part in our communications
will be holding onto the chips’ gates and holding on to the savvy
consumers. We’re running the market with a legitimate,
environmentally, clean, and green diesel.
Let me tell you how this connects. First of all, United States is
several years behind Europe in terms of taking the sulfur out of
diesel and we call that ULSD, Ultra Low Sulfur Diesel fuel. It is
now widely available. As of October of ’06, it was mandated in
80% of the stations selling Diesel fuel here in the United States
with the priority on states with California emission rules and those
who have filed suit with Tier 2 Bin 5 regulations.
We’re at an interesting position right now because for Diesel fuel,
we’re in competition with the home heating oil market as well as
commercial trucking and what you’ll find is Diesel people are not
just buying to save money in mileage or to save money at the
pump because frankly, the benefit isn’t there right now although
Diesel does deliver about 35% at their mileage than a comparable
gas motor. What we find is it’s all about resale value. A 10-year
old Jetta TDI is worth two to three times as much as a gas car. That
tells us that there are storng demands out there and what we found
is that people who buy our Diesels tend to keep them longer, drive
them farther, and take better care of them.
Male: And that sounds just like the prescription that Americans will be
want to a digger in the future but we won’t be able to get all of the
new Volkswagen Diesels because some of the T1’s won’t be sold
in America. Explain that.
Keith: Absolutely! We’re going to launch our Diesel Technology in our
traditionally highest value of Diesel vehicle which is the Jetta and
it’s the most popular Volkswagen here in the United States.
Generally speaking, we sell about a hundred thousand a year and
15% of those are Diesel powered. Two things are happening. We
can put the clean Diesel which is 50-state accepted and certified
and does not require urea into the Jeddah less expensively than in
any other car. One could potentially require urea and then it’s over
a weight limit. The passat would require the same urea technology
and we have a real industry first and that we’ll have the only clean
diesel where the customer is not part of the commission’s control
Male: Interesting. Now, is it a similar situation on what happened a few
years back when we saw Diesel kind of disappeared out of
Heath: What happened was that you saw a Diesel’s window and you
missed them in California because they’ve been gone here for a
while. You can still sell a old technology Diesel 42 states here in
United States but seven other states have followed California with
adapting the Tier 2 Bin 5 regulations or essentially holding a
Diesel power vehicle to the very same standards that a gas car is
Male: When I get to the gas pump and I put in the premium and I see the
Diesel is even more expensive, is this a phenomenon just in
California because of some environmental regulations or what are
the reasons for these high prices?
Keith: This is a phenomenon across the United States and it is essentially
because we are in competition with the home-heating oil market
and the commercial trucking industry and because of that we have
what we would call inelastic demand and that it’s a pretty flat
demand curve across the board and it’s always comes down to
demand and supply. And right now, there is more diesel demand
and we anticipate that this will get greater. In a nutshell at
Volkswagen, we believe that clean Diesel can represent a viable
alternative for more and more U.S. drivers so our goal is to get
people to try this technology. With that in mind, as of June 1st of
this year, there will be one Jetta Sedan with a clean diesel engine
and a DSG transmission at every deal or just for sampling in for
test drives and to encourage people to give it a try and that’s a two
prong. And what we found is that people who have bad memories
of a Diesel from the 70’s or 80’s are probably not going to
consider it and yet if they are offered the opportunity and they are
looking at the cost savings in terms of cost of ownership as well as
their miles per gallon, it could represent an opportunity. So, those
who are already in the—are past Diesel customers, they are already
waiting with a positive hand.
Male: What type of promotional or educational materials are you going to
try to disseminate to get the word out about this new Diesel
because it really does have the new look?
Keith: We have two key communication points on that. First, let’s
position Diesel as being good, clean, fun and to that end, this
weekend at Virginia International Raceway, in fact I live form here
and go straight there will be the inaugural race in the Jetta TDI
Cup which is a young driver talent search for drivers 16 to 24 years
old in identical Jetta Diesels and we’ll run that as a companion
series. Now, how do we skew out the old myth that Diesels are
slow? We take them on racing. The second part of our message is
that Diesel has changed both the fuel and the technology. And
finally, that Diesel can represent an alternative. We’re not going to
knock the previous of the environmentalist number one list
anytime soon but if we can enter the conservation with clean
Diesel, it puts us miles ahead.
Male: You know the bottom line to clean technology and to alternative
energy is what it’s going to cost me? Now, there is a price to pay
for the clean or the green. How does the clean Diesel cost savings
compared to others?
Keith: Well, we see as a cost-saving is in the total cost of ownership of
the vehicle. When you add up everything from purchase price to all
the fuel you put in at over 200,000 miles and what you can sell it
for at that odometer reading, that’s where the diesel provides the
win. Diesels are for people who love them and don’t leave them.
One last key point on Diesel which we believe is the next step to
the future. At Volkswagen, we believe clean Diesel provides the
best and most accessible platform for sustainability. We all know
about Biodiesel. Our diesels are certified to run on a B5 mixture.
However, we’re in Volkswagen globally is working with the
company called Corren in Europe to develop a second generation
biomass fuel from plants stalk. You get the CO2 benefit from the
cleaner burn and you get the CO2 benefit from the plant growth
and we believe that clean diesel represents the best move towards a
sustainable platform for the future because personal mobility
especially at a place here like a race track is important to all of us.
And when we talk about sustainability, you’re still going to pay
four or five dollars a gallon but there will be fuel for you and there
will be fuel for your kids.
Male: So, when you look in the future, do you see any electric in the
future beyond clean Diesel?
Keith: Absolutely! I’d say electric and a fuel cell are the end game for just
about everybody and Volkswagen was part of the California fuel
sub-partnership. We have extensive development and have recently
brought innovation into that category with a high temperature fuel
cells pack which is actually the higher temperature raises the
efficiency. So, we’re very excited about that but we all know that
when we talk about hydrogen or a whole electric, we begin to talk
about infrastructure and the beauty of clean diesel today and now
and as a platform for renewability in the immediate future is that it
can leverage our existing infrastructure.
Male: For the consumer, I know I who have driven some alternative
energy in electric vehicles, the experience is really the thing. How
do you describe to someone who has preconceptions about Diesel
or about electric or any alternative fuel the experience of driving
and how do we get them to come out and test drive?
Keith: You know that’s a two stage answer. And the first is let’s take
clean Diesels. Diesels are not about horsepower. Diesels are about
torque. If I had 100 horsepower outboard and I was going to tow
six 15-year-old kids Cypress Gardens, Style, it’s not horsepower
that gets them up out of the water skis, it’s torque and that’s what
diesels are all about. It is that torque and that pulling power so it is
different and you’re absolutely right. I guess our messaging
becomes “try it” but instead of all that potato chips logo and “try it,
you’ll like it”, it’s a little bit more of “try it, you might like it”.
There are lots of different alternative fuel solutions out there. At
Volkswagen, we believe clean diesel is our best bet. Will it work
for everybody? Maybe not, but do we see a huge clean diesel in the
future of United States? We believe it’s at a tipping point right
Male: Keith, thanks very much!
Keith: Thanks guys, have a great day!
Exclusive Interview with Volkswagen's Diesel Maven
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