Here’s an example of an important new product opportunity.
Volkswagen has a turbo diesel engine called the TDI. It’s available in the US and Canada in their Golf, Beetle, Jetta, Passat, and Tourag cars. It runs on diesel fuel, and depending on the model gets up to 50 mpg. It’s also really fun to drive; diesel creates very high torque at low RPMs, so it’s quick off the line and sporty. The best part is this: Without modification, it can run on biodiesel fuel. (official industry trade group, Hawaiian producer, Veggie Van, make your own) For instance, you can run used McDonald’s fryer grease, or vegetable oil. These are extreme examples – biodiesel is a term that can mean a lot of different types of fuel, but they’re all renewable, in the sense that they’re grown, or recycled, or whatever. They’re not fossil fuels.
Another piece to the puzzle: Volkswagen is having a rough time right now. Profits are down, and they’re stretched thin between making “people’s cars” and reaching into the high-end $70,000 luxury car market. They have a difficult labor-cost structure, and they’ve had some quality problems. They need an image change, representing not just a new slogan, but a new focus.
What VW should do is hire me to lead an effort that would introduce VW-branded biodiesel into the market. This might take the form of VW filling stations, a co-branding effort with an existing fuel marketer, or simply “greasing the skids” and moving this idea forward in the industry. This would be a complex product development project. A fuel supply must be ramped up, a distribution chain must be created or tapped into, a brand created, advertising, word-of-mouth, etc.
And the results: Volkswagen would own the mindshare of “locally grown fuel.” Or, “normal cars, renewable fuels.” Or, “German cars, fueled by American corn.” Etc. You get the idea. This could spark a major interest in VW TDI cars. The only other mass-produced consumer diesel is the Mercedes.
VW is in the perfect position to capitalize on the immediate need for new fuels. In Europe, the TDI engine is the best-selling engine, and is available in five configurations. They’ve got the production capacity to ramp up and own this market. Further, these new fueling stations can be the link to all sorts of other services. Think “Apple Store for your VW.”
This would be a positive development in the world, and I’d be happy to contribute my talents.
November 8, 2004