Oliver Blume: the Porsche CEO on the electric car revolution
Can the carmaker compete with Tesla?
Oliver Blume became chief executive of Porsche two years ago. It all happened so fast that when he went home to tell his family, they thought he was joking.
It was September 2015, and the prestige sports car maker’s parent, Volkswagen, was mired in the biggest crisis of its 80-year history. Martin Winterkorn, the chief executive, had just resigned after admitting the company had cheated on emissions tests on up to 11m diesel-engine cars worldwide.
Within days, Matthias Müller, head of Porsche, was appointed to succeed Mr Winterkorn. Before news broke, Mr Müller summoned Mr Blume, then Porsche’s head of production, and took him by the hand: “Tomorrow I will be in Wolfsburg” — VW’s headquarters — “and now it’s up to you,” Mr Müller said.
The 49-year-old German effects an “aw-shucks” attitude as he describes his surprise at being offered one of the most glamorous jobs in the industry: “I never thought aboutplanning one day to be CEO,” he says. “I think it’s impossible to plan.”
He mentions this approach to his career four times during his interview with the Financial Times at the UK’s Goodwood Festival of Speed, where Porsche is exhibiting cars. Mr Blume says he sees little value in mapping out a future; rather, he prizes daily competence that finds its rewards later. That competence was tested during his first weeks at the helm, which were “crazy”. Overnight, the number of people he was responsible for tripled to nearly 30,000.
His chief task is to lead the luxury brand into a new era of electric, autonomous and web-connected cars. So far, so good: Porsche deliveries rose 7 per cent to 126,497 in the first half of 2017; operating profits accelerated 16 per cent to €2.1bn, and profit margins increased to more than 18 per cent. An average Porsche, if there is such a thing, sells for $99,000, and generates $17,250 in profit.
For all the talk of new tech rivals such as Tesla upending traditional brands, Porsche has been thriving since it was acquired by VW in 2012, with double-digit growth in China leading the way.
“The industry isn’t changing from one day to the other,” he says. “Therefore you have to be very clear how to construct this period of transition. We will continue with our combustion engines; it’s very clear that’s our core business — very purist sports cars.”
Sales have nearly doubled in the past five years thanks in part to Porsche’s sport utility vehicles: its Cayenne and Macan SUVs made up nearly 70 per cent of sales last year.
The typical Porsche driver in Germany is a man over the age of 50, but in China — home to 27 per cent of its sales last year — typical buyers are under 40 and, increasingly, female, according to the company.
Despite strong sales, the challenges are enormous. “Ten or 20 years ago, it was obvious that when you thought about a new product, you were thinking about design,” he says. Now, instead of perfecting one iteration to the next, Porsche faces wholesale disruption and must balance “staying close to our roots with doing something very innovative”.
Analysts have criticised the German car industry for being late to the electric revolution, but Porsche was ahead of most when it unveiled the Mission E, the brand’s first electric car introduced as a concept two years ago at the Frankfurt Motor Show. The four-door sedan, expected to cost about $85,000 — roughly similar to Tesla’s high-end Model S 100D — claims a range of 500km and can be charged to 80 per cent capacity in 15 minutes.
Porsche has invested €1bn in the project and this month in Frankfurt Mr Blume said his “big priority” was to bring the car to production in 2019.
He beams when asked about its features, which include menus navigated by eye-tracking and images projected on to the windshield instead of rear-view mirrors. “The human-machine interface will be totally different and will show how Porsche thinks about the future,” he says.
The Mission E has been called “the Tesla-killer” by some journalists, but Mr Blume insists Elon Musk’s US electric vehicle company is not a rival. “What Porsche is doing is to follow our own way. We did it in the past and we’ll do so in the future. Therefore it’s not so important what Tesla does.”
Mr Blume credits Mr Musk, Tesla’s co-founder and chief executive, with introducing innovations that have “moved the whole industry”, such as iPad-like displays, but he considers Tesla only “the first step” in the evolution of electric cars.
Porsche, like other traditional carmakers, he says, must always generate profits — something Tesla has not yet achieved for a full year. The US company is listed, but behaves more like a start-up, with its emphasis on spending on research and development. “For us, [generating profits] is the main topic, and for Tesla it’s not,” he says.
Mr Blume has spent his entire career at the Volkswagen Group. After studying mechanical engineering at Braunschweig university — the town is a hub for VW employees commuting to Wolfsburg — he landed an internship with Audi in 1994.
As he climbed the ladder to executive roles, he received a doctorate in engineering from Tongji University in Shanghai, then spent five years in Barcelona as head of planning for Seat.
In 2009, he was appointed head of production planning for the VW brand, before he joined Porsche’s board in 2013.
If the Mission E is a success, and Mr Blume can then build an electric SUV while managing to increase sales, the executive would be in a strong position to again succeed Mr Müller — whose contract expires in 2020 — this time as head of the VW Group.
But Mr Blume, who speaks carefully and methodically, sometimes even numbering his paragraph-sized responses, is coy about his ambition.
“I just think about the job I’m doing now,” he says.