Volkswagen MotorSport Has A Plan – /SHAKEDOWN

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Volkswagen MotorSport Has A Plan – /SHAKEDOWN

LEO PARENTE: Major auto brands in auto racing In America, I think sometimes we take for granted the Volkswagen brand, but they are a major global player Next year, WRC with the Polo, but they do a lot more than that For example, single-make series around the globe; the Scirocco Cup, which I’d love to see in America; the F3 engine program F3, as we all know, is a stepping stone for a lot of young racers, and Volkswagen is in there with their engine program competing against the likes of Mercedes Benz, Nissan, and Honda And it’s no coincidence we’re looking at a Red Bull branded F3 car because this is a stepping stone to the big leagues Beyond that, Dakar Volkswagen has been a mainstay They have multiple wins, again proving production technology, like diesel here And they’ve done psycho things like build a fleet of Golf four wheel drive cars to compete at the Nurburgring 24 But now it all comes back to WRC and the other support programs And when we come back, we’ll talk to Jost about the Volkswagen brand in racing, and how they play among the Volkswagen group of the other brands in racing– Porsche, Audi, Bentley, Ducati, SKODA, SEAT, whatever [CAR ENGINES] LEO PARENTE: So joining us through the magic of Skype is Jost Capito He’s the director of Motorsport over at Volkswagen How are you, Jost? Thank you JOST CAPITO: I’m good Thank you, Leo How are you in the US? LEO PARENTE: The US is wonderful And where are you exactly right now? JOST CAPITO: In the moment, I am at the headquarters of Volkswagen Motorsport that is in Germany, and it is in Hannover, quite in the north of Germany It’s about one hour drive to the Volkswagen headquarters in Wolfsburg LEO PARENTE: I don’t want this to be a big formal interview, but to give some context, you’re back there at Volkswagen, and let’s start by defining, frankly, your role at Volkswagen Motorsport and how it fits with Group Volkswagen and their Motorsport involvement JOST CAPITO: I am in charge of the Motorsport for the Volkswagen brand And as the Volkswagen Group, we have quite a lot of companies who are very big in motorsports It’s Porsche, it’s Audi, it’s SEAT, it’s SKODA But since recently, it is Bentley as well, who just announced they’re going GT3 And it’s MAN with truck racing, and it’s even Ducati with MotoGP and Superbike So it’s a very wide range, and we have Mr. Wolfgang Durheimer, who is in charge in the board of Group Motorsport So we have quarterly meetings with all Motorsport directors of all brands, so we discuss our strategies and also we find synergies But also, as you see at Porsche and Audi, there’s also healthy competition where some of the brands are in the same events So that works also pretty well LEO PARENTE: So to that point, not to put you on the spot, but when I went to the group Volkswagen site, I noticed a lot of brands that were there, the ones you mentioned Bugatti, for example, they don’t race But Porsche was not What’s the connection? How is Porsche working within this new group entity, please? JOST CAPITO: Porsche is just from first of August, they are part of the group So maybe when you looked before, maybe the website is not on the actual status right now But since August, Porsche is completely integrated into the group, like Audi, Bentley, Bugatti, Lamborghini are as well And they are the latest member of the team And therefore, the integration takes a little time LEO PARENTE: I get a sense that there’s an element of the mechanicals, the engineering that matters to Volkswagen Motorsport– I don’t want to put words in your mouth– and very production-based it seems Help me Tell me whether I’m right or wrong, quite frankly JOST CAPITO: I think you’re very right that for Volkswagen, it’s very important what kind of technology is in the Motorsport activities and in Motorsport in the competition vehicles And you see that group-wide Yeah, I think the Porsche, the 911, is no question about it Audi with TDI is also no question about it And with Volkswagen, the Touareg and the Dakar was also clear, that this technology that was in that race Touaregs has made it mostly into production diesel engines And now you know that Volkswagen will go with the Polo in the World Rally Championship from beginning of ’13 And this is downsized direct injection engines turbocharged This is where the industry is going on the cars you can buy in the shops, in the dealerships, and this is also

where the WRC goes with the regulations So we show the highest engine technology, for example, in the World Rally car, and this is technology our customers can buy LEO PARENTE: The type R, the WRC program, seems to be the focal point of Volkswagen Motorsport going forward, but you do other things Like, I’m always fascinated with the F3 engines that you race against brands like Mercedes and Nissan and Honda Tell me a little bit about, for every one, the full breadth of what you’re running over there at Volkswagen Motorsport JOST CAPITO: You know that Volkswagen is a global brand, and that’s why the Motorsport is global as well The World Rally program, as you rightly said, is the key program for Volkswagen Motorsport in the upcoming years This is a world championship, and I think that is the oldest world championship besides Formula 1 So Formula 1 and Rally are the two main world championships that the FIA runs and guides Therefore, it needs very high attention It needs a very highly sophisticated engineering team, and also the marketing side will be very strong on that program But as you mentioned, as well, the Formula 3 engine is quite an important program for a couple of reasons First is the teams need engines, and it’s also engine technology And we develop these engines, but we also see Formula 3 as the upcoming championship formula for young drivers And Volkswagen is not in Formula 1 and there’s no intention to get into Formula 1, but the Formula 3 drivers go up the ladder, not necessarily in Formula 1 You see at Audi, LMP1, Le Mans, Porsche, in GT , there are a lot of opportunities for people who come through And also these guys, the majority, come through Formula 3 That’s why Formula 3 is quite important for us, seen as a group activity, not just a Volkswagen brand activity On the other side, as we are global, and I think you see, say, the target that Volkswagen has to be the largest car manufacturer by sales in 2018 That means that we have to have aggressive and huge gross rates in the developing and increasing areas These are the BRIC nations, and it is North America, and the BRIC, China, of course, is very important So we have activities in China that are coordinated through Volkswagen Motorsport, but also activities that are run by the joint ventures Volkswagen has there as Motorsport is quite, I’d say, very popular within the Volkswagen company, as in what they have with the joint ventures So we run the Scirocco Cup in China And the one-make cups for Volkswagen have a very long history And you know that also in the US with the Jetta Cup, it has been there So now we have a Scirocco Cup in Germany that is run with gas So that Scirocco Cup in Germany is about 80% less CO2 then a normal car has, because we run with natural gas In China we run with the petrol engine, the gas engine, and this is a very prominent cup in China that’s run very well And it’s quite like an entry level It’s not highly sophisticated But then also in China, you have the Carrera Cup and they have Lamborghini Trophy, and you have an Audi cup, so that the teams in these countries like China can develop from an entry level of the Scirocco Cup up to really high sophisticated sports cars Also in China, we support the team that runs the Polo in the Chinese Touring Cup Championship, and we won the driver’s championship in the Chinese Touring Car Championship And in India we run a Polo Cup So as the Polo is the main car for India, with Volkswagen India, we developed the cup version of the Polo And this is run very successfully in a one-make cup in India And then we have other activities, like very much engine activities We support the Swedish Touring Car Championship We support the National Rally Championship in South Africa With Super 2000, they run with the Polo And as you see, that’s very much global And as you can see, that there is a lack in the US So that’s what we are thinking of and developing in the moment, a strategy, and say how can Motorsport support the car sales of the Volkswagen brand in the US

LEO PARENTE: Jost, not to turn this into a business meeting, but just curious, how do those national decisions get made? Are you managing that from the lead in the headquarters, or is it happening with the decision process in each country? Like, when I see the Jetta’s running here in the US in various series, was that a US decision or a collaborative-type call to action? JOST CAPITO: No In the past, it was very much regional- or country-driven And we are in the process to align the activities more, so that we also have more synergies, so that we support the regions and countries in their interests, but also align them that they use technology that’s already developed so that we don’t develop a special racing or competition vehicle for each country So that we have a base technology with the various cars and that we focus also on where the cars are on the market, where are they built, not going too specific per country but using the cars that are available in most of the countries, and then do the sports activities with those vehicles And next year in 2013, we celebrate 50 years of Volkswagen Motorsport, or Motorsport with Volkswagen, and it actually started with the Formula Vee in the US So you might see some nice activities in 2013 that is based around 50 years Formula Vee and Volkswagen Motorsport in the US LEO PARENTE: Let’s talk about WRC for a minute Obviously, those who have been following know that you’ve been testing, or pre-running, if you will, this year in a SKODA, in S-2000 getting ready for the Type-R’s debut And there’s no truth to the rumor, correct, that you paid Sebastien Loeb to retire and Ford to go away for next year, right? You’re really focused on your program You’re not paying off the competition JOST CAPITO: No We would love to have competition Yeah, I think we would nothing like more than beat Loeb in the Citroen If you get into WRC and you beat the guy who won the nine consecutive championships with the same brand, then it is nothing better to beat them But we are sure that for ’13, this is our learning year and our entry year We think for sure in ’13, it would be, I would say, nearly impossible It would be a miracle if you can do that, as the team at Volkswagen has run the Dakar So the whole team has to change WRC is completely new for the team It’s a completely new car The team had to change these activities, and they are widely different It’s like to doing a marathon and then doing a 100 meter Yeah? You need a lot of changes, and you need one season to get through all these changes and get them implemented LEO PARENTE: So not to take anything away from the stoutness of the competition We know it will be tough next year Without breaching confidentiality, what did you learn from running these WRC events with the SKODA and [INAUDIBLE] and your team? What type of things did they learn that made it say, yes, this is what we need to do better to be in this different venue, versus our experience at Dakar, as you mentioned? JOST CAPITO: You see, before the beginning of 2012, the team had never done a rally event And the rally event has its own rules, and there are things allowed, they are not allowed, and they are not naturally given They are all according to the regulations And when you are in the rally, it is very stressful If you have to service, you have to exactly know who has to do what, and it’s very much defined Every single work someone is doing at the car is defined and has to be trained over and over again And you can train that at home in a workshop, but this is an artificial environment So there is nothing better, and I think it’s crucial that the team learn the processes, learn what they are allowed to do with the SKODA and Super 2000 As SKODA is a very well and really proper-engineered rally car, that it’s very reliable, you have no issues with them all year, that allowed the team to focus on the processes in WRC without focusing on developing and fixing a vehicle And as this was the case, that allowed us, in parallel, doing the testing with the Polo So focusing the development engineering on the Polo through testing and getting the experience and running at the WRC event with a reliable and easy-to-go car without engineering in the WRC events LEO PARENTE: If I forced you to pick one or two things that the Polo does really, really well– I know it’s a well-rounded race car, but if I forced you to pick one or two things that’s really a focus point of why that Polo is going to perform, what one or two features would you pick? JOST CAPITO: One, I would pick it’s a very solidly engineered car, the rally car, that is conservative and has the

latest technology, but there’s no risk-taking in the technology LEO PARENTE: Refresh my memory on WRC rules Can you update the car as you wish through the season, or are there are limitations to what you can or cannot do in terms of update? JOST CAPITO: They have very much limitations If you have an issue, you can use a choker, and you have a limited number of chokers, but the car is homologated, and from that homologation you can’t do a lot What is specific for this year is that they have always three years homologation period, so homologation is valid for three years And this three years’ period ends end of ’13 So that means end of ’13, for ’14, there is a new opportunity to develop a new car So that puts us in this situation that we could have quite a conservative-engineered WRC car, and focus this year on the engineering, see where we are competitive-wise, and then for sure it will be hard work to homologate the right vehicle and the right Polo for WRC for the ’14 season and then ’15 and ’16 LEO PARENTE: So last question on WRC We all know Motorsport is performance-driven, objective-driven Would you be comfortable sharing what is the goal for 2014? Have you set any benchmarks of what we want to accomplish? I mean, is a win in the plan, or is it something less specific? JOST CAPITO: The target for ’13 [INAUDIBLE] the next season and our first season in WRC is that, towards the end of the season, that we are in the position that we can get podium results, not based on lack or not lack of us or others So that in t he real competition, we can get a top-three result Then for ’14 is that, under the same conditions, we can achieve one or the other win, so that to bring us in the position that in ’15, we can run for the championship LEO PARENTE: Let’s move on to the Group Motorsport structure You mentioned earlier how the brands work through some type of committee or consensus Again, without breaching the secrecy of that, take me through a little bit of how you, as the head of Volkswagen Motorsport, enter into that discussion and decision to get programs done I mean, I’d love to believe it’s not a board room, but you all get in race cars and do a race of champions and the winner gets their program But how does it really work? How do you get these decisions made for what brand should do what in Motorsport? JOST CAPITO: I think there are a lot of the brands where they have tradition And in Volkswagen, we believe that one of the successes of the Volkswagen group in general is that the brands keep their identity, and they have their own engineering So Lamborghini is not engineered anywhere else but at Lamborghini They can use the technology and everything that is in the brands, it is the drawers, but they have their own identity, and they have their own engineering And that is very important And the same thing is then valid and is carried over for Motorsport So when you see that Porsche– Porsche is a sports car manufacturer They have been in prototype racing, in GT racing, all the history So that is not changing And when you see that, with Audi, they have now a history in Le Mans, and they are in a touring car like DTM So that is also not changing even when Porsche and Audi are in competition at Le Mans But as they have their own identity and their own freedom, this competition can happen and will not be banned because there is competition within the group LEO PARENTE: In production car world, car product plans are multiple years out, five, maybe sometimes longer, in terms of planning ahead In Motorsport, how far do you plan where you are and where you want to be? For example, do you know a five-year plan for Volkswagen Motorsport right now? JOST CAPITO: Yeah, of course I know a five-year plan for Volkswagen Motorsport, and we are so much aligned with the plans of the production vehicles LEO PARENTE: Let me ask the question this way Hyundai announced that they are going into WRC and pulled back all their American motorsport For Volkswagen in the US, looking forward, should we be expecting maybe more Volkswagen Motorsport programs in the US or more of a centralized plan? JOST CAPITO: No I would say you could expect more motorsport activities

specifically in the US LEO PARENTE: Now the fans are going to hate me, because I’m supposed to ask you exactly what are you talking about, but in that five-year window, we should pay attention? Things could be happening? JOST CAPITO: Yes Yeah I’m pretty sure that in this five-year window, something very exciting is going to happen LEO PARENTE: Well, feel free to add anything you want in terms of fenders or no fenders or production-based or not JOST CAPITO: Well, let’s leave it a surprise LEO PARENTE: What criteria go into the decisions? For example, you mentioned tradition matters Production base matters Is there anything else that goes into the evaluation of the committee in terms of deciding this is a good program or not? JOST CAPITO: No It’s also the opportunities you have The value for money has to be right, and Motorsport is of course in competition to advertising and other ways where you can spend the money So we also work a lot with the FIA, with authorities, to keep the programs for reasonable budget, because the return of investment is important, too, for these programs LEO PARENTE: In our intro, we mentioned that your history and heritage in motorsport is pretty deep and broad, besides the BMW, and Porsche experience, Sauber F1 And were you co-driver at Dakar or Rally? Dakar, right? JOST CAPITO: Yeah I’ve been in Dakar four times One with a motorbike, one with a car, two times with a truck And with the truck, with my father, we won the trucker category in ’85 And it was not a strict co-driver and driver We both enjoyed driving We both enjoyed co-driving, so we shared it LEO PARENTE: Cool If there’s one thing you would change in racing to make racing better, in any definition of better, what is it that you’d look at? JOST CAPITO: I would say that the racing, especially based out of Europe, has to learn lessons from the US motorsport And I think for me, having been based within Ford and being in charge of motorsport business development there in the US, I think I learned a lot, and that’s where the German-based motorsport has to learn a lot to make the motorsport more, let’s say, easy, more accessible, more interesting in the multimedia LEO PARENTE: And I’ll play devil’s advocate, because I can see maybe where we’re going here Talk to me a little bit about your sense of motorsport being entertainment and show versus still being true to sport and technology Talk to me a little bit about your mindset there JOST CAPITO: I think it needs both And I do not think that to have a good entertainment and show necessarily takes away from the sport or from the technology or from the development there I think if you combine both, you can have the perfect sport that is interesting for a wide range of people, because that’s what the manufacturers need They have to sell cars not to just car enthusiasts, but they have to get the message through that motorsport is supporting the development And if you have a successful motorsport program where you get also technology proven and developed, but in the sporting environment where you are in competition with the same brands, where you are competition in the show rooms, that shows you that if the improved safety in motorsports gives you an improved safety in your production car, if you improve emissions and fuel consumption in motorsport cars, because that’s very important, especially on the weight side, if you can run with five liters less than somebody else, you’ve got five kilos less in the car So you have an advantage So efficiency is very important for motorsport, and this efficiency makes it into production vehicles But this is still all developed and pushed in a competitive environment on the racetrack that makes the development so much quicker LEO PARENTE: Well, my commentary is going to go here from that standpoint– racing has always been about efficiency, whether it’s, as you mentioned, lightweight or getting the most power out of an engine, not using all the fuel on the planet Maybe there’s a storytelling that needs to be reminded that racing has it’s roots in the type of things that matter right now to great production cars But I’ve just gone commentary Let’s end with two last questions, if I could Whether it’s Dakar or your Sauber F1 experience, talk to me a little bit about what you learned in those processes to get success that’s applicable to either doing business or just organizing your life Is there something in there that is a good lesson? JOST CAPITO: There are a couple of good lessons I think the biggest lesson I learned was through the Dakar,

and that is its life and motorsport I think if you start from the life experience, is that a human being is very small If you’re in the desert, 600 kilometers around you, nothing than sand, and nobody to help, and you rely on nature, and you face nature, then you know how small you are compared to nature and compared to the world And if you haven’t had an ego before, that ego is then definitely gone And from the motorsport side is, if you do Dakar– and like I did it with, remember, two trucks and four people That was an entire team, and it went through three weeks and 15,000 kilometers, more than 10,000 miles Then you learn every aspect in motorsports So you have to be a driver, a co-pilot, an organizer, you have to be a chef, you have to be the mechanic, you have to be the refueler, you have to be organizer to do the paperwork, the administration You go through every single aspect that you can have in whatever motorsport category And then you know what it needs, what kind of specialties it needs, and that combined with Formula 1, where you need the absolute expert at every single job And I think that this combination is very unique And if you have these two extremes, then I think you have huge experience LEO PARENTE: Here comes my last question You’re late for an airplane Getting to the airport which race car driver do you want to get you there on time? JOST CAPITO: Allan McNish Allan is a long-time friend of mine And I got him after his big accident when he recovered in the ’90s I got him in the Porsche supercar for one weekend And then we got him into the Porsche team And we are still very good friends since then And whenever I have to go to Monte Carlo and land in Nice, he is my chauffeur He comes from Monte Carlo, his home, picks me up from the airport, gets me home And he does that on the way back, too He takes me to the airport, and it’s always very safe and very entertaining, too And on the coming Saturday, we have the presentation of our WRC team in Monte Carlo So he can’t pick me up at the airport because he is at the FIA celebration in Istanbul on Friday night But he already said on Sunday, he would take me back to the airport So I’m very much looking forward to that LEO PARENTE: I’m not playing can you top this We’ve been lucky enough to meet Allan, and he is a hell of a personality But I’m convinced he’s not Scottish He’s really Italian at heart Tell him that See you later JOST CAPITO: I will tell him that And he will love it, Leo, especially from you LEO PARENTE: You take care Thank you, again, for the time JOST CAPITO: Thank you very much I appreciate it, and thanks for your time, too LEO PARENTE: Ciao Ciao JOST CAPITO: Thank you LEO PARENTE: Thank you Bye bye JOST CAPITO: Bye bye Bye bye, Leo [MUSIC PLAYS]