Moving Forward
Mobility in Flux

When the Covid-19 pan­dem­ic got under­way, most air­planes were ground­ed and cruise ships were docked. Trains, trams, and buses often kept run­ning, although with con­sid­er­ably fewer pas­sen­gers and com­pre­hen­sive social dis­tanc­ing mea­sures. Car mak­ers and sup­pli­ers were com­pelled to sus­pend pro­duc­tion because of dis­rup­tions to their sup­ply chains. In this edi­tion of the Porsche Con­sult­ing mag­a­zine, com­pa­ny lead­ers describe how they respond­ed to the dif­fi­cult sit­u­a­tion and what they expect for the future.

“Since we have indus­tri­al oper­a­tions in eight coun­tries and export to about forty coun­tries, the biggest chal­lenge of the pan­dem­ic was to adjust our busi­ness strat­e­gy to con­front the new sce­nario. The peak of the pan­dem­ic occurred at dif­fer­ent times in these coun­tries, and we were forced to tem­porar­i­ly sus­pend the oper­a­tion of most plants in Brazil and abroad. We had envi­sioned 2020 to become the most suc­cess­ful year ever in the his­to­ry of the com­pa­ny and had hir­ing plans. Instead, we need­ed to fur­lough some of our staff and to reduce jour­neys and salaries. Per­son­al­ly, anoth­er great chal­lenge was to mobi­lize lead­er­ship to face this new sce­nario and, for­tu­nate­ly, we were successful.

In response to the adverse sce­nario caused by the Covid-19 pan­dem­ic, Mar­copo­lo extend­ed the dura­tion of the order book and quick­ly focused efforts on two major fronts: cost ade­qua­cy and cash preser­va­tion, as well as devel­op­ing alter­na­tives to enable our clients to oper­ate safe­ly again, with the launch of the Mar­copo­lo BioSafe plat­form. This is a series of biosafe­ty solu­tions devel­oped to make pub­lic trans­porta­tion safer against virus and bac­te­ria con­t­a­m­i­na­tion and to regain pas­sen­gers’ con­fi­dence that they will have ade­quate san­i­tary con­di­tions when travelling.

Glob­al mobil­i­ty is under­go­ing pro­found changes, regard­less of the pan­dem­ic. Pub­lic trans­porta­tion sys­tems in large cities are on the verge of col­lapse, so it is nec­es­sary to rethink the sys­tem and find new ways of plan­ning cities and peo­ple’s loco­mo­tion. There­fore, last year we cre­at­ed Mar­copo­lo Next, an inno­va­tion divi­sion focused on devel­op­ing solu­tions for the future of mobil­i­ty, aligned with our 2025 strate­gic plan. That’s because we think of mobil­i­ty as a sys­tem encom­pass­ing urban plan­ning, modals, and var­i­ous means of transportation—not just the bus, which is our core busi­ness. We believe that in this way, we can imple­ment the trans­for­ma­tion for our sec­tor that we strive for—by rais­ing the lev­els of com­pet­i­tive­ness and sus­tain­abil­i­ty of the var­i­ous play­ers, while adding to the com­fort, safe­ty, speed, and con­ve­nience of pub­lic transportation.”

“The pan­dem­ic is hit­ting the econ­o­my hard, and the mobil­i­ty sec­tor espe­cial­ly so. As a pub­lic trans­porta­tion com­pa­ny, we saw demand for our ser­vices drop dra­mat­i­cal­ly, by 75 per­cent. But we lived up to our respon­si­bil­i­ties. We adapt­ed our ser­vices to keep trans­porta­tion run­ning for peo­ple doing essen­tial work. And we had to take the right steps to pro­tect our employ­ees. At the same time, our pas­sen­gers showed a high degree of sol­i­dar­i­ty, which I per­son­al­ly found very heart­en­ing. Like all com­pa­nies, we are now fac­ing the chal­lenge of find­ing our bear­ings in this new reality.

Our goal is to take this as an oppor­tu­ni­ty. That includes adjust­ing our ser­vices to meet demand and work­ing to regain the con­fi­dence of our cus­tomers. The mobil­i­ty sec­tor has there­fore launched a cam­paign called #Besser­Weit­er (“Bet­ter­Fur­ther”). It focus­es on the employ­ees, because with­out their com­mit­ment and con­fi­dence we would not have been able to han­dle the cri­sis. And our work remains the same for the future—we want to bring about a shift to sus­tain­able trans­porta­tion in Ger­many. Pub­lic trans­porta­tion is one of the answers and solu­tions need­ed to ensure envi­ron­men­tal­ly friend­ly mobil­i­ty and favor­able liv­ing con­di­tions in Germany.”

“The corona­virus pan­dem­ic has had a huge impact on our oper­a­tions. Pas­sen­ger num­bers were way down for a while. They’re now back to an aver­age of 50 to 60 per­cent of where they were, and some­what high­er on a few lines, but we’re still far from nor­mal. It was a huge chal­lenge for all our employ­ees to deal with this extra­or­di­nary sit­u­a­tion, but we suc­ceed­ed in keep­ing Cologne in motion dur­ing that crit­i­cal time.

Along with keep­ing our ser­vices run­ning, our high­est pri­or­i­ty was and con­tin­ues to be pro­tect­ing the health of our employ­ees and our pas­sen­gers to the great­est degree pos­si­ble. For exam­ple, we’ve installed pro­tec­tive screens for our bus dri­vers, dis­trib­uted dis­in­fec­tants and masks to our employ­ees, done addi­tion­al clean­ing and dis­in­fect­ing of our vehi­cles, pro­vid­ed masks to our pas­sen­gers, made sure the masks are worn, and much more. We can say that the vast major­i­ty of our pas­sen­gers are respond­ing to this dif­fi­cult sit­u­a­tion in a very respon­si­ble way.

The big chal­lenge will be to regain people’s con­fi­dence such that they take buses and trains again with­out hes­i­ta­tion. Var­i­ous stud­ies have shown that pub­lic trans­porta­tion  is safe, and it’s now a mat­ter of get­ting this mes­sage out. One step in that direc­tion is the exten­sive coun­try-wide pub­lic­i­ty cam­paign called #Besser­Weit­er (“Bet­ter­Fur­ther”), launched joint­ly by the fed­er­al and state gov­ern­ments, local umbrel­la orga­ni­za­tions, and mem­bers of the Asso­ci­a­tion of Ger­man Trans­port Com­pa­nies (VDV) like us. But of course it’s also a mat­ter of over­com­ing the enor­mous eco­nom­ic reper­cus­sions of the pan­dem­ic, which affect the entire sec­tor. And we have to refo­cus pub­lic atten­tion on the impor­tant role of pub­lic trans­porta­tion in reduc­ing air pol­lu­tion and pro­tect­ing the cli­mate, in order to achieve the urgent­ly need­ed goal of trans­form­ing transportation.”

“We at DB are pleased to see that more peo­ple are now tak­ing trains again. In order for all our pas­sen­gers to feel safe and at ease at our sta­tions, we’re focus­ing on hygiene, clean­li­ness, and social dis­tanc­ing. We were quick to short­en our clean­ing inter­vals. Mon­i­tors, announce­ments, and posters remind every­one of the new rules. And we’ve installed plex­i­glass screens to pro­tect both our staff and cus­tomers. We’re also test­ing inno­v­a­tive process­es like using UV‑A light to dis­in­fect the hand rails on esca­la­tors. All our employ­ees who have con­tact with cus­tomers wear masks. Our Group-wide cam­paign enti­tled “Safe trav­el. We’ll get there togeth­er.” is show­ing pas­sen­gers that rail trav­el is safe dur­ing this dif­fi­cult peri­od if every­one pulls togeth­er. We’re work­ing togeth­er to increase the per­cent­age of train trav­el, as part of a con­cert­ed effort to trans­form the trans­porta­tion sec­tor.” 

“We saw a dra­mat­ic drop in sales, espe­cial­ly in April and May, by as much as 80 per­cent in some areas. But when the auto­mo­tive sup­ply chain got mov­ing again in June, that had a pos­i­tive effect on us too. Speak­ing for myself, at our daily task force meet­ings I’ve wit­nessed a strong focus on essen­tials, a whole­heart­ed desire to work togeth­er, and rapid advances in the use of dig­i­tal com­mu­ni­ca­tions and collaboration.

We start­ed by get­ting a han­dle on the big pic­ture, and then took spe­cif­ic steps for each site. The focus was on ensur­ing liq­uid­i­ty and reduc­ing costs, but we also reeval­u­at­ed our strate­gies and adapt­ed them where need­ed. One dif­fi­cul­ty had to do with the dif­fer­ing respons­es of indi­vid­ual coun­tries to the pan­dem­ic. While gov­ern­ments in the U.S. and Europe pro­vid­ed funds to cover wages and salaries and pro­duc­tion was able to con­tin­ue, in coun­tries like Mex­i­co pro­duc­tion was sus­pend­ed but wages still had to be paid.

I don’t expect orders in the auto­mo­tive indus­try to reach the level of pre­vi­ous years all that quick­ly, in part due to pol­i­cy-relat­ed devel­op­ments . But I do think there will be a resur­gence in indi­vid­ual trans­port as the most flexible—and safest—way of get­ting around. This is also reflect­ed in devel­op­ments in self-dri­ving vehi­cles. When broad sup­port for our high­ly inno­v­a­tive sec­tor returns, the Ger­man auto­mo­tive indus­try and its core areas of exper­tise will remain a leader on the world mar­ket. It will not only gain ground in soft­ware devel­op­ment but maybe become a leader there too. What’s impor­tant, how­ev­er, is that we as a soci­ety do not become our own great­est obsta­cle by bur­den­ing the auto­mo­tive indus­try with too many reg­u­la­tions and interventions.”

“We’re in an extreme sit­u­a­tion right now—not only with respect to the econ­o­my but also to human safe­ty. Our two pri­or­i­ties are to pro­vide the best pos­si­ble pro­tec­tion against the virus for our employ­ees at around 180 Mahle loca­tions around the world, and to guide Mahle as a com­pa­ny safe­ly through this cri­sis. I’m very happy about the way our employ­ees are deal­ing with the sit­u­a­tion. Despite the strain, we’re see­ing high lev­els of com­mit­ment and respon­si­bil­i­ty, also out­side of work. That gives me con­fi­dence and energy.

The spe­cial chal­lenge of this pan­dem­ic is that it moves through dif­fer­ent regions at dif­fer­ent points in time and with dif­fer­ent inten­si­ties. This means we have to keep adapt­ing our strate­gies and adjust­ing the capac­i­ties at our sites in flex­i­ble ways. Thus far that has worked very well. We’ve been able to sup­ply our cus­tomers the entire time.

We’re assum­ing it will take many years for our busi­ness­es to reach pre-Covid lev­els again, and we’re adapt­ing to that right now. At the same time, we’re also work­ing hard on remain­ing the strong part­ner with the right tech­no­log­i­cal prod­ucts for our cus­tomers in the future. Our sec­tor will change even faster in the wake of the virus. But despite the chal­lenges I’m con­vinced it will suc­ceed in this trans­for­ma­tion, and will pro­vide viable solu­tions for sus­tain­able mobil­i­ty and do its part to meet our cli­mate pro­tec­tion targets.”

“When the pan­dem­ic broke out, most of our cus­tomers‘ fac­to­ries essen­tial­ly closed down overnight which also meant our con­tacts were no longer avail­able to han­dle the order-pro­cess­ing sit­u­a­tions. Some of the trucks had to turn around because no one was there to receive deliv­er­ies. I’ve never expe­ri­enced any­thing like that. We imme­di­ate­ly had to define ways of deal­ing with the sit­u­a­tion. We quick­ly launched emer­gency oper­a­tions where­by we only pro­duced goods for which we were sure of deliv­ery. Thanks to our out­stand­ing cus­tomer rela­tions and with the help of online meet­ings, we were able to put all the nec­es­sary mea­sures prompt­ly into place, both here and in other regions and countries.

The first pri­or­i­ty has always been to pro­tect the health of our employ­ees. As soon as signs of the epi­dem­ic appeared, we intro­duced the AHA rules (Abstand, Hygiene,
Alltagsmasken—“distance, hygiene, every­day masks”). We mod­i­fied shifts at the fac­to­ries, split teams in the over­head areas, and took many other steps, includ­ing dis­in­fect­ing impor­tant areas mul­ti­ple times a day. That helped us achieve a com­pre­hen­sive level of protection.

I hope the eco­nom­ic slow­down will only be tem­po­rary, so that impor­tant future-ori­ent­ed projects like elec­tro­mo­bil­i­ty and autonomous dri­ving will not suf­fer too much in the process. I also hope we can retain our col­lab­o­ra­tive mod­els to a healthy degree, such as vir­tu­al and mobile modes of work, which have now proved them­selves in a cri­sis. And of course I’m hop­ing to meet our cus­tomers in per­son again soon.”

“In light of the pan­dem­ic, the Würth Group is very sat­is­fied with its sta­ble devel­op­ment over the first half of the year. Total sales for the Würth Group declined by 3.1 per­cent com­pared to the same peri­od of last year, and remained at near­ly the same level for Ger­many. Because skilled crafts and trades are essen­tial activ­i­ties, and because we had suc­cess­ful­ly estab­lished a dig­i­tal infra­struc­ture for our order and sup­ply process­es in pre­vi­ous years, we did not expe­ri­ence any bot­tle­necks and remained capa­ble of mak­ing deliv­er­ies at all times.

My per­son­al insight from the early days of the Covid-19 pan­dem­ic is that the media—in the words of Peter Weibel, who heads the Cen­ter for Art and Media in Karlsruhe—are like echo cham­bers that ampli­fy actu­al events. That affects people’s moods, and fear is not a good com­pan­ion in crises. I there­fore tried to remain opti­mistic, and to rely on the strength of our com­pa­ny. Con­fi­dence in the power of com­mu­ni­ca­tion is anoth­er impor­tant fac­tor that has proved effec­tive over recent months.

Work­ing with many sec­tors and busi­ness fields gives us a high degree of agency and agili­ty, which in turn enables us to respond prompt­ly to any mar­ket trends or changes such as those brought by the corona­virus. Our low share of the mar­ket means we have enor­mous poten­tial for growth, so I’m con­fi­dent that we will grow and gain fur­ther shares of the mar­ket over the next decade. With our cor­po­rate strat­e­gy and the expe­ri­ence we’ve gained from this pan­dem­ic, I’m also con­vinced we can han­dle any crises in the future.”

“COVID-19 has impact­ed every Amer­i­can busi­ness, includ­ing Sil­ver­car by Audi and Deal­er­ware. While demand at our air­port rental loca­tions is sig­nif­i­cant­ly lower, our city loca­tions have never been stronger. On the Deal­er­ware side, the market’s need for dig­i­tal expe­ri­ences is stronger than ever. The com­bi­na­tion of strength­en­ing car rental demand in cities (from dis­placed mass trans­porta­tion demand) and the accel­er­at­ed need for con­tact­less expe­ri­ences rep­re­sents a huge oppor­tu­ni­ty for our company.

Our focus has always been on new oppor­tu­ni­ties. We have lever­aged our Sil­ver­car and Deal­er­ware assets to pre­pare for a new go-to-mar­ket strat­e­gy that has allowed us to shift Silvercar’s rental expe­ri­ence into the deal­er­ship. Our aim is to cre­ate a sin­gle screen for our deal­er part­ners to man­age all of their fleet needs. A vehi­cle at the deal­er­ship can be a cour­tesy vehi­cle, a rental car, an extend­ed test-drive, or even part of a sub­scrip­tion pro­gram. We’re con­fi­dent in this new strat­e­gy and our abil­i­ty to deliver.

Across the entire indus­try, OEMs and deal­ers are look­ing at the mar­ket­place dif­fer­ent­ly. We have seen more accel­er­a­tion in the past six months on strate­gic road maps and man­age­ment mind­sets than we had expect­ed over the next few years. I see the market’s mobil­i­ty needs increas­ing but vehi­cle own­er­ship decreas­ing. The next decade will be won by the con­nect­ed fleet and the mobil­i­ty prod­ucts and ser­vices enabled by fleet oper­a­tors. We believe that OEMs have every right to build and scale daily, week­ly, and month­ly mobil­i­ty for con­sumers. Deal­er­ships across the indus­try have all of the oper­a­tional require­ments to enable mobil­i­ty at scale, includ­ing fleets, oper­a­tional hubs, and staff trained to deliv­er a great cus­tomer expe­ri­ence. I hope that the indus­try finds the con­fi­dence to pur­sue new go-to-mar­ket strate­gies in the inter­est of new cus­tomer demand.”

“Our goal is to get through this crit­i­cal peri­od in a sys­tem­at­ic and respon­si­ble way. That includes how we respond­ed very early on. As soon as we saw what the virus was doing in China, we con­vened a coun­cil of experts at Porsche. This coun­cil is mon­i­tor­ing the sit­u­a­tion around the clock, and has been mak­ing quite a few deci­sions. Our high­est pri­or­i­ty is always on pro­tect­ing the health of our employ­ees. We make no com­pro­mis­es in this regard. The health of our com­mu­ni­ty is of para­mount importance.

At first we planned to stop pro­duc­tion for only two weeks. But it ended up being six weeks. One of the rea­sons had to do with bot­tle­necks in the glob­al sup­ply chains. That was very painful. But we won’t be deterred: we’re look­ing ahead and want to get back up to speed as soon as the cri­sis is over. I see major oppor­tu­ni­ties for Porsche in the future. Over the last few years we’ve launched a huge prod­uct cam­paign, includ­ing the Tay­can at the end of 2019. It gives us a superb foun­da­tion to build on.

The opti­mism I see in so many peo­ple as they go about their work makes me con­fi­dent about the future. Every­one is focus­ing on the essen­tials, and sup­port­ing each other. And it’s times like this that pro­duce dreams and needs. There might even be a greater need for sports cars when the cri­sis is over—that at least would be my wish.”

Porsche Con­sult­ing con­duct­ed a rep­re­sen­ta­tive sur­vey of Ger­man air-trav­el­ers in May 2020. The results show that the days of pri­or­i­tiz­ing price are gone.