Ludger Fretzen, head of group strategy for new business at the Volkswagen Group, spoke to Arjen Bongard about the role of technology in solving urban transport problems, the complexity of the challenges and the need for cross-industry cooperation.

Screen-Shot-2018-10-08-at-4.31.45-PM-300x242.

VW strategist Fretzen says efficiency is key to finding smart urban solutions (Image: Bongard)

Volkswagen brought its electric premium car-pooling van to the ITS World Congress here last month, providing a live example how the auto will help address growing urban traffic problems. Pollution, traffic congestion and growing urban transport inefficiency were key topics of discussion at the five-day ITS gathering, which was attended by government officials and executives from technology, communications and transportation companies. 

Mr Fretzen, the huge luxury van you’ve brought here seems to underline how Volkswagen is very focused on the new forms of mobility that are emerging, especially in cities. Is everybody in the company on board for this big change away from a traditional hardware focus?

The company is thinking about different ways to build cars and bring them to people. Our electrification strategy is part of this. We’re going to have a big portfolio of different cars and brands, but vehicles will still be the focus. But it’s clear that the mobility market is changing and so are we. We’re thinking about mobility solutions and I think we are in a good position to do well in this market.

As part of your new-business responsibilities, you’re looking at solutions for urban transportation, which is a big focus at the ITS meeting. Can you explain where VW fits into this?

When we look at urban solutions, we have different products that we want to bring to life. We’re engaging in partnerships with other companies and we’re talking to cities about mobility on demand, car sharing and other opportunities. We’re also discussing which incentives can be provided for electric vehicles. There are a lot of different opportunities we are discussing with cities and we are keen to help them solve some of their problems.

At a gathering like the ITS World Congress there are so many problems on the table that you’d be inclined to despair. How do you approach the challenges?

From my point of view, I think there will always be a demand for new products, technologies and services. Cities get bigger and their problems increase and you cannot just react with regulation. I see a shift right now away from merely political reactions to more long-term strategies that involve industry partners. It’s a change that’s going to take a bit of time and some cities in Asia and China may be more technology-oriented than others because they have more financial resources. Europe may change a bit slower, but here, too, politicians have recognized the problems.

Is the auto industry well positioned to lead in the smart-mobility trend?

It’s not a question of leadership. We have to find solutions together with different partners. If we want to find quick and good solutions for people and cities, we have to work together. And different entities have different things to contribute. We, for example, are specialists for special-purpose vehicles for ride-pooling with our MOIA new-mobility company. Others may know a little bit more in other areas. We have to bring people, technologies, cities and industry partners together to create solutions for cities.

What do you spend most of your time on at Volkswagen?

I probably spend most of my time working on strategies for urban solutions. Together with our board we are defining how we will build integrated urban solutions into our strategy. We’re right in the middle of that process. What adds to the complexity is that every city is different and has totally different problems. Just compare a city like Hamburg, a port city, with Atlanta, which has one of the world’s biggest airports.

How do you use high-tech to address urban transportation and infrastructure challenges that are so huge and complex you often don’t know where to start?

There are lots of ideas and technologies that are visionary and long-term oriented, but the reality out there is, indeed, often totally different. You have to look at the overall system. If you have a very sophisticated, visionary application or technology, it won’t do you any good if the system is not able to use it. You have to develop things in an evolutionary way. Cities don’t have billions of euros to invest and cannot renew everything from one day to the next.

Here in Copenhagen, ITS Congress participants are impressed with the city’s advanced bicycle infrastructure. But VW’s home, Germany, is still very much a car country, which seems to work against strategies for alternative modes of transport.

I’m not sure about that. You own a car but also own a bicycle. You’re both a car driver and a cyclist. There are examples – in Italy in particular – where road use has been adapted so that people can ride bikes but still don’t slow down car traffic. It’s an intelligent example and it doesn’t make for an “either-or” solution.

Is the political will there to implement such traffic solutions?

It’s a challenge, but you have to think about these problems from the point of view of efficiency. Problems such as traffic congestion and air pollution are clear, but you have to move from a problem focus to a solution focus. If you do that, there are a lot of different possibilities. Very often it’s a matter of efficiency. How efficiently do you invest the money available, how efficiently are you changing the systems, how efficiently do you work together on technology with partners. Efficiency is a very big part of finding solutions.