Volkswagen Replaces Audi Chief Amid Pressure to Electrify

The News

Volkswagen is replacing the chief executive at its luxury brand Audi, naming Gernot Döllner to take over from Markus Duesmann, as the company seeks to accelerate its transition to electric vehicles.

Mr. Döllner, who has served as Volkswagen’s leading strategist, will start his new role on Sept. 1, Audi said in a statement on Thursday. Audi, although profitable, is struggling to convert to battery power and compete with the growing threat from Chinese carmakers.

Herbert Diess, Volkswagen’s chief executive before Oliver Blume took over in September, brought Mr. Duesmann to Audi from BMW three years ago, with the hope that he could help the brand innovate and strengthen sales of its electric models.

The company’s earnings grew 40 percent to 7.6 billion euros, or $8.3 billion, in 2022, thanks to a decision to prioritize its higher-end vehicles over more affordable cars as it worked through a chips shortage caused by the supply chain disruptions linked to the coronavirus pandemic.

Audi is now working on its final generation of combustion engine models and plans to bring 10 new electric models to its lineup, ahead of plans to produce only E.V.s beginning in 2026.

What It Means: Audi faces competition for electric vehicles.

Audi is Volkswagen’s second-most-important luxury line, after Porsche. Although Porsche has successfully broken into the market for electric vehicles, Audi’s strength has been the continued popularity of its combustion engine vehicles.

Now, the company faces stiff competition from the leading producers of electric vehicles, such as Tesla and Chinese automakers. Mr. Blume has said he expects the company to maintain 14 percent growth and wants to see Audi better coordinate its production with both VW and Porsche.

That will be easier with Mr. Döllner as the company’s head, as he worked many years alongside Mr. Blume when both were top-level managers at Porsche, which like Audi is owned by the Volkswagen Group.

Mr. Döllner has been working at Volkswagen since 1993, while still earning his doctorate. He served as head of Porsche’s four-door Panamera sedan series, which he helped develop.

What’s Next: A focus on North America and China.

A main focus for Mr. Döllner will be to push ahead talks on opening a factory in North America. Audi’s main competitors, BMW and Mercedes-Benz, both have production facilities in the United States, allowing them to produce nearly twice as many vehicles for that market. Audi’s S.U.V.s are popular with U.S. drivers, and the company is looking at developing electric versions of several of its leading models.

In China, Audi’s combustion engine vehicles remain popular, but the company needs to speed up production of electric vehicles if the brand is to remain competitive with popular local producers, including BYD and Chery.