TOPLINE Volkswagen, one of the <a href="https://www.carlogos.org/reviews/largest-car-companies.html" target="_blank" rel="noreferrer noopener">world’s largest carmakers</a>, plans to accelerate its transition to electric vehicle production in Europe by 2030, joining an array of other global automakers seeking to move deeper into the electric vehicle market in the coming years to help meet EU emissions targets.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<ul class="wp-block-list"><li><a href="https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-accelerating-transformation-into-software-driven-mobility-provider-6878" target="_blank" rel="noreferrer noopener">Volkswagen said Friday</a> that it expects all-electric vehicles to account for at least 70% of sales in Europe by 2030 — double its previous target of 35%.</li></ul>



<ul class="wp-block-list"><li>The automaker’s electric vehicle sales in the U.S. and China are targeted to reach 50% by 2030.</li></ul>



<ul class="wp-block-list"><li>Volkswagen also said it will invest about $19.1 billion in its electric vehicle programs by 2025.</li></ul>



<h3 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h3>



“We are stepping up the pace. In the coming years, we will change Volkswagen as never before,”&nbsp;<a href="https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-accelerating-transformation-into-software-driven-mobility-provider-6878" target="_blank" rel="noreferrer noopener">said Ralf Brandstätter</a>, CEO of Volkswagen.



<h3 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h3>



The goal to increase electric vehicle production by 2030 matches the mandate by the&nbsp;<a href="https://www.reuters.com/article/us-climate-change-eu-transport/eu-to-target-30-million-electric-cars-by-2030-draft-idUSKBN28E2KM" target="_blank" rel="noreferrer noopener">European Commission</a>, the executive branch of the European Union, to have at least 30 million zero-emission vehicles on European roads by that year as part of its overall campaign to achieve carbon-neutrality in the EU by 2050.&nbsp;<a href="https://www.eea.europa.eu/data-and-maps/indicators/transport-emissions-of-greenhouse-gases/transport-emissions-of-greenhouse-gases-12#:~:text=In%202017%2C%20transport%20(including%20aviation,increased%20by%200.7%20%25%20in%202018." target="_blank" rel="noreferrer noopener">About 27% of EU greenhouse gas emissions</a>&nbsp;come from the transport sector, the Commission estimates, adding “The EU’s goal of climate neutrality by 2050 cannot be reached without introducing very ambitious measures to reduce transport’s reliance on fossil fuels.”&nbsp;



<h3 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h3>



To achieve its own electric vehicle sales goals, Volkswagen said it will release at least one new electric model car every year. Volkswagen joins a list of global automakers seeking to accelerate their own electric vehicle production goals.&nbsp;<a href="https://pressroom.toyota.com/toyota-to-debut-three-new-electrified-vehicles-for-u-s-market/" target="_blank" rel="noreferrer noopener">Japan’s Toyota</a>, is planning to have 40% of new global vehicle sales be electrified models by 2025 and raise that proportion to 70% by 2030. Last month,&nbsp;<a href="https://www.forbes.com/sites/palashghosh/2021/02/17/ford-motor-vows-to-sell-only-electric-cars-in-europe-by-2030/?sh=4fecdc08650c">Ford Motor said</a>&nbsp;it plans to invest $1 billion in an electric vehicle manufacturing facility in Germany, as part of its goal to sell electric cars exclusively in Europe and the U.K. by 2030.&nbsp;<a href="https://www.forbes.com/sites/michaeltaylor/2020/12/03/volvo-cars-to-be-all-electric-by-2030/?sh=6ce030ac33cb">Sweden’s Volvo</a>&nbsp;said last December that it will exclusively make electric vehicles by 2030.&nbsp;<a href="https://www.nytimes.com/2021/01/28/business/gm-zero-emission-vehicles.html" target="_blank" rel="noreferrer noopener">General Motors</a>&nbsp;said in late January that it will sell only emission-free vehicles by 2035. IHS Markit, a London-based data provider, said recently that<a href="https://ihsmarkit.com/research-analysis/ihs-markit-forecasts-global-ev-sales-to-rise-by-70-percent.html" target="_blank" rel="noreferrer noopener">&nbsp;global sales of electric vehicles</a>&nbsp;are estimated to have reached 2.5 million in 2020 and then projected to rise by 70% in 2021. This year, China and Europe will account for 44% and 28%, respectively, of global sales, followed by North America at 16%. In 2025, global sales will exceed 12.2 million, IHS Markit forecast.



<h3 class="wp-block-heading" id="h-big-number">BIG NUMBER</h3>



<a href="https://www.bloomberg.com/news/articles/2021-01-22/volkswagen-posts-12-2-billion-profit-in-resilient-pandemic-year" target="_blank" rel="noreferrer noopener">$12.2 billion</a>. That’s the profit recorded by Volkwagen in 2020, well ahead of analysts’ expectation of about $5.7 billion, but far below the $23 billion posted in pre-pandemic 2019. Volkswagen’s 2020 performance was boosted by soaring demand for luxury vehicles in China.



<h3 class="wp-block-heading" id="h-tangent">TANGENT</h3>



Volkswagen faces a fine of more than $119 million this year for<a href="https://www.cnbc.com/2021/01/23/volkswagen-profits-fell-automaker-missed-co2-emission-targets-in-2020.html" target="_blank" rel="noreferrer noopener">&nbsp;failing to meet</a>&nbsp;the European Union’s carbon dioxide emissions targets from its passenger car fleet last year.&nbsp;



<h3 class="wp-block-heading" id="h-further-reading">FURTHER READING</h3>



<a href="https://www.forbes.com/wheels/best/electric-cars/">Best Electric Cars For 2021</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/enriquedans/2020/12/06/the-moment-of-the-electric-vehicle-hasarrived/">The Moment Of The Electric Vehicle Has Arrived</a> (Forbes)



By Palash Ghosh, Forbes Staff

Volkswagen AG Headquarters Ahead of 2020 Earnings Announcement

Volkswagen Is The Latest Carmaker To Accelerate Its Electric Vehicle Ambitions

Thomas Schaefer, the 49-year-old CEO of Volkswagen Group South Africa, loves golf, running and wine, and says he would put his money into waste-to-energy projects, and horses. 



What has your focus been for business recently? 



Volkswagen in South Africa started over 65 years ago and has
been a part of South African history with iconic models like the Beetle, Citi
Golf and Kombi. Volkswagen has been the passenger car market leader for the
past eight years and had 23% market share in 2019. The factory in Uitenhage
will produce 162,000 Polos and Polo Vivos as well as 97,000 engines. 



In the rest of sub-Saharan Africa, we have unfortunately not
been as successful. But then again, no other manufacturer was really
successful, as 95% of all vehicles sold are used vehicles and not new. 



In 2016, Volkswagen decided to change that by reaching out
to those African countries that have the political will to make the required
changes that will bring industrialization and jobs. We have started assembly
operations in Rwanda, Kenya and Nigeria. Ghana is next and then hopefully,
Ethiopia. 



Those are small beginnings, but when Volkswagen started in
China in 1984, nobody expected it would be producing more than four million
vehicles per year in 22 factories today. 



If you had to invest capital into any venture, what would it be and why? 



I would invest in waste-to-energy projects. Apart from being
feasible, they tick some more boxes like job creation, conserving the
environment, reducing the need to dump waste in landfills and providing a
source of carbon neutral energy. 



Your biggest investment blunder yet? 



It My biggest was buying German Telekom shares after
privatization. 



What is your most prized investment, and why?



My house in Stuttgart [Germany]. It is rented out to an
American couple. 



When we were about to move to Hannover with my change over
to Volkswagen, the American Army decided to increase its presence in the
Stuttgart region and build up the Africa Corps. Since then, rental has gone
through the roof. 



What do you spend your money on mostly? 



My wife’s passion is horses. We own a smallholding and I can
say without a doubt that this has taken number one spending position. Other
than that, mainly food and wine. I can’t really spend much on cars. 



Your most recent expensive acquisition?



Our smallholding for the horses, plus all the equipment that
one needs such as quad bikes for the riding arena.&nbsp; 



What is your dream car? 



A Porsche 356.



Which is your favorite Volkswagen vehicle, and why? 



The Polo GTI. It is an unbelievable car that ticks all the
boxes – looks, feel, finish, power, handling and of course, value for money.



You cannot travel without your…? 



German wax earplugs. I need them to sleep on the plane. The
normal earplugs you get are all useless and hurt your ears.&nbsp; 



– Interviewed by Gypseenia Lion

VWSA Chairman & MD Thomas Schaefer

‘I Can’t Really Spend Much On Cars’

German carmaker Volkswagen’s South African unit expects to produce a record number of vehicles this year despite a sluggish domestic economy, power outages and looming talks with union members, its managing director said.



Volkswagen Group South Africa manufactured 126,463 vehicles in 2018, but expects to ramp up output to 161,900 vehicles this year with 108,000 destined for export, Thomas Schaefer told journalists.

RC14E5E6FBE0

VW South Africa Targets Record Production In 2019: Official

If Volkswagen realizes its ambition of becoming the global leader in electric cars, it will be thanks to a radical and risky bet born out of the biggest calamity in its history. 



The German giant has staked its future, to the tune of 80 billion euros ($91 billion), on being able to profitably mass-produce electric vehicles &#8211; a feat no carmaker has come close to achieving.



So far mainstream automakers’ electric plans have had one main goal: to protect profits gleaned from high-margin conventional cars by adding enough zero-emission vehicles to their fleet to meet clean-air rules.



Customers have meanwhile largely shunned electric vehicles because they are too expensive, can be inconvenient to charge and lack range.



The biggest strategy shift in Volkswagen’s 80 years has its roots in a weekend crisis meeting at the Rothehof guesthouse in Wolfsburg on October 10, 2015, senior executives told Reuters.



At the meeting hosted by then VW brand chief Herbert Diess, nine top managers gathered on a cloudy Saturday afternoon to discuss the way forward after regulators blew the whistle on the company’s emissions cheating, a scandal that cost it more than 27 billion euros in fines and tainted its name.



“It was an intense discussion, so was the realization that this could be an opportunity, if we jump far enough,” said Juergen Stackmann, VW brand’s board member for sales.



“It was an initial planning session to do more than just play with the idea of electric cars,” he told Reuters. “We asked ourselves: what is our vision for the future of the brand? Everything that you see today is connected to this.”



Just three days after the Rothehof meeting of the VW brand’s management board, Volkswagen announced plans to develop an electric vehicle platform, codenamed MEB, paving the way for mass production of an affordable electric car.



For months after the Volkswagen scandal blew up in 2015, rival carmakers treated diesel-cheating as a “VW issue”, according to industry experts. But regulators have since uncovered excessive emissions across the sector and unleashed a clampdown that undermines the business case for combustion engines, forcing a sector-wide rethink.



Now the “villain” of dieselgate is likely to become the largest producer of electric cars in the world in coming years, analysts say, putting it in pole position to flood the market &#8211; should the demand materialize.



“Decisions to convert the Emden factory (in Lower Saxony) to build electric cars, would never have happened without this Saturday meeting,” said Stackmann, one of five senior VW executives who spoke to Reuters.



However the full scale of VW’s ambitions were only revealed two months ago when it took the industry by surprise by pledging to spend 80 billion euros to develop electric vehicles and buy batteries, dwarfing the investment of rivals.



It plans to raise annual production of electric cars to 3 million by 2025, from 40,000 in 2018.



<h4 class="wp-block-heading">STRATEGIC PERILS</h4>



It’s a risky bet.



With regulators and lawmakers, rather than customers, dictating what kind of vehicles can hit the road, analysts at Deloitte say the industry could produce 14 million electric cars for which there is no consumer demand.



It’s also an all-or-nothing bet in the long run.



VW, whose ID electric car will hit showrooms in 2020, has set a deadline for ending mass production of combustion engines. The final generation of gasoline and diesel engines will be developed by 2026.



Arndt Ellinghorst, analyst at Evercore ISI, said betting on electric vehicles (EVs) could be risky because customers did not want to own cars dependent on street-charging facilities.



“What if people are still not ready to own EVs? Will adoption be the same in the U.S., Europe and China?” he said.



But he added that EU and Chinese emissions regulations made electric vehicle adoption inevitable and that being an early industry mover in that direction offered a “positive risk-reward”.



Another by-product of dieselgate that quickened VW’s electric drive, according to the senior executives, was a purge of the company’s old guard, who became the focus of public and political anger.



This empowered Diess, a newcomer who had joined as VW brand boss shortly before U.S. regulators exposed the carmaker’s emission test cheating.



Diess, who joined from BMW where he helped pioneer a ground-breaking electric vehicle, has since been appointed CEO of Volkswagen Group, a multi-brand empire that includes Audi, Porsche, Bentley, Seat, Skoda, Lamborghini and Ducati.Slideshow&nbsp;(3 Images)



Carmakers have failed to mass-produce electric cars profitably largely because of the prohibitive cost of battery packs which make up between 30 percent and 50 percent of the cost of an electric vehicle.



A 500 km-range battery costs around $20,000, compared with a gasoline engine that costs around $5,000. Add to that another $2,000 for the electric motor and inverter, and the gap is even wider.



Even electric start-up Tesla’s cheapest car, the Model 3, is on sale in Germany at 55,400 euros, priced just below a base model Porsche Macan, a compact SUV. In the United States, Model 3 prices start at $35,950.



VW believes its scale will give it an edge to build an electric vehicle costing no more than its current Golf model, about 20,000 euros, using its procurement clout as the world’s largest car and truck maker to drive down the cost.



“We are Volkswagen, a brand for the people. For electric cars we need economies of scale. And VW, more than any other carmaker, can take advantage of this,” a senior Volkswagen executive told Reuters, declining to be named.



The carmaker’s electric-vehicle budget outstrips that of its closest competitor, Germany’s Daimler, which has committed $42 billion. General Motors, the No.1 U.S. automaker, has said it plans to spend a combined $8 billion on electric and self-driving vehicles.



Renault-Nissan-Mitsubishi said in late 2017 they would spend 10 billion euros by 2022 on developing electric and autonomous cars.



“On a 2025 view, we expect Volkswagen to be the number one electric vehicles producer globally,” UBS analyst Patrick Hummel said. “Tesla is likely to remain a niche player.”



U.S. shale boosts BP profits to five year high



<h4 class="wp-block-heading">STRICTER TESTING</h4>



VW’s test cheating using engine management software &#8211; “defeat devices” &#8211; resulted in the introduction of tougher pollution tests which revealed in 2016 and 2017 that emissions readings across the industry were up to 20 percent higher under real-world driving conditions compared with lab conditions.



This has raised the bar on the auto sector’s efforts to cut emissions of carbon dioxide, blamed for causing global warming.



EU lawmakers in December agreed a cut in carbon dioxide emissions from cars of 37.5 percent by 2030 compared with 2021 levels. This was after the European Union forced a 40 percent cut in emissions between 2007 and 2021.



“This goal is no longer reachable using combustion engines alone,” Volkmar Denner, chief executive of Bosch, the world’s biggest auto supplier, said about the 2030 proposals.



Every gram of excessive carbon dioxide pollution will be penalized with a 95 euros fine from this year onwards.



Strategy firm PA Consulting forecasts VW will face a 1.4-billion-euro penalty for overstepping average limits in Europe by 2021, while Ford and Fiat-Chrysler face fines of 430 million euros and 700 million euros respectively.



Daimler, BMW, PSA, Mazda and Hyundai will miss their 2021 average emissions targets, PA Consulting forecasts. Toyota, Renault-Nissan-Mitsubishi, Volvo, Honda and Jaguar Land Rover are on track to meet their goals.



PA Consulting’s forecasts were extrapolated using 2017 registration data for each powertrain type and consumer buying trends, but do not include more recent sales trends.



Ford, VW and BMW said they would meet their targets because of a push to sell more hybrid and electric cars in 2018. Daimler said it aimed to meet the targets, PSA said it would respect the targets while Fiat-Chrysler declined to comment. Mazda had no immediate comment, while Hyundai did not respond to a request for comment.



Carmakers have struggled to lower their average fleet emissions because of a shift in customer taste toward heavier, bigger SUVs (sports utility vehicles), which make it harder to maintain the same levels of acceleration and comfort without increasing fuel consumption and pollution.



SUVs are now the most popular vehicle category in Europe, commanding a market share of 34.6 percent, according to JATO Dynamics. Even Porsche, which makes lightweight sportscars, relies on sports utility vehicles for 61 percent of sales.



As the industry-wide scale of excessive emissions prompted Brussels to push through tougher laws late last year, VW executives concluded that purely electric cars were the most efficient way to meet carbon dioxide goals across its fleet.



This was the point of no return, according to executives, when the company made the final electric investment decisions and committed to staying the course it had plotted after dieselgate.



“After evaluating alternatives, we opted for electromobility,” chief operating officer Ralf Brandstaetter told Reuters about VW’s deliberations in November. -Reuters



-Ilona Wissenbach and Agnieszka Flak

gettyimages-950606096-594×594

Bet Everything on Electric: Inside Volkswagen’s Radical Strategy Shift

Volkswagen Group has held on to its position as the world’s top-selling automaker for the fifth year in a row, although the German group was edged out again by the Renault-Nissan-Mitsubishi alliance in the light-duty vehicles segment.



Renault SA, Nissan Motor Co Ltd and Mitsubishi Motors Corp together sold 10.76 million passenger cars and light commercial vehicles in 2018, according to Reuters’ calculations after new data released on Wednesday. The group doesn’t sell heavy trucks.



Nissan said on Wednesday it sold 5.65 million vehicles last year, down 2.8 percent on the year. Mitsubishi reported an 18 percent rise in sales to 1.22 million units while Renault sold 3.88 million units, up 3.2 percent on the year.



Volkswagen’s deliveries rose 0.9 percent to a record 10.83 million last year, including its MAN and Scania heavy trucks, the German company said earlier this month. Excluding heavy trucks, it sold 10.6 million units.



Toyota Motor Corp retained its third spot, announcing on Wednesday that it had sold 10.59 million vehicles last year including its Toyota and Lexus brands, along with minicars made by subsidiary Daihatsu and light and heavy trucks produced by its truck division Hino Motors Ltd.



Excluding Hino trucks, Toyota sold 10.39 million units last year. The automaker has said it expects to sell a total of 10.76 million vehicles in 2019.



Many automakers are trying to boost sales volumes to achieve economies of scale and reduce costs amid soaring investments needed to develop next-generation technologies, including self-driving cars and electric vehicles.



This has been a focus of the Renault-Nissan-Mitsubishi Motors group, which is looking to share more vehicle parts and consolidate production platforms to trim R&amp;D and manufacturing costs, while raising profitability.



The alliance, which brought Mitsubishi Motors into its fold in 2016, is currently in crisis with its former Chairman Carlos Ghosn arrested and indicted on charges of misconduct. Nissan has also been indicted, and Renault appointed new top management last week. -Reuters



&#8211;Naomi Tajitsu

gettyimages-451680930-594×594

Renault-Nissan Group Sold Most Cars Last Year, but VW’s No.1 Including Trucks

Volkswagen will manufacture electric car batteries and charging stations in its home region in Germany, as it prepares to mass produce electric vehicles and overhaul its components division, which makes engines and steering parts. 



 Volkswagen (VW) said on Friday it would invest 870 million euros ($985 million) by 2020 to developing e-vehicle components, adding the batteries business would manufacture battery cells and packs as well as overseeing recycling of old cells. 



The German carmaker, which is headquartered in Wolfsburg, Lower Saxony, also said it would start producing mobile electric car charging stations at its nearby plant in Hannover, which currently makes engines and castings.



VW will bundle cells from electric car batteries into storage powerbanks that can be used to recharge up to 15 electric cars at a time and be transported to locations where power is needed, such as a stadium during a rock concert.



Customers can find the mobile charging stations using an app on their smartphone, it said.



“It can be set up flexibly and independent of the power supply wherever it is needed: for example, in public parking lots in the city, on company premises, or as a temporary charging point at large-scale events,” VW said.



A depleted charging point could be exchanged for a new one, or the station could be permanently attached to the power supply to recharge itself, VW added.



China&#8217;s Huawei eyes smartphone supremacy after record 2018 sales



The battery charging station would allow VW to store solar and wind energy, and could recharge itself during off-peak hours, helping to ease strain on the power grid, the carmaker said.



The first mobile charging stations will be set up this year in VW’s hometown of Wolfsburg and rolled out to other cities in 2020. -Reuters



-Jan Schwartz and Edward Taylor

gettyimages-959809518-594×594

Volkswagen to Manufacture Mobile Electric Car Recharging Stations

The tiny country of Rwanda is now producing factory-fresh Volkswagen cars from its rolling hills. Next up are ride-hailing and public car-sharing services by the German carmaker.

“Africa doesn’t need to be the dumping ground for second-hand cars or second-hand anything, because in the long run, you end up paying a higher price anyway. So if you can pay a high price for second-hand, why not pay a high price for something new?”
These powerful words were by Rwanda’s president Paul Kagame in a speech delivered at the launch of the Volkswagen (VW) assembly plant late June in the country.
The German carmaker, which now has a presence on the rolling hills of the Kigali Special Economic Zone, is the first international automobile giant to invest in Rwanda.
It will have a capacity to produce up to 5,000 cars with a starting price of $23,000.
President Kagame observed that Africans deserve better and this is one way of showing how they can afford it.
“In the medium-term, the only way for us in East Africa to move up the industrial value chain from assembly to manufacturing is to build an integrated regional manufacturing base.”
For this to be achieved, he underscored the need to shift from the logic of competition to one of cooperation but also fuse the two “because when they are put together, everyone gains”.
<a href="http://www.forbesafrica.com/focus/2018/03/27/african-car-no/" target="_blank" rel="noopener">READ MORE: The African Car That Is No More</a>
Thomas Schaefer, the Chairman of VW Group South Africa, revealed that opening an assembly plant in Rwanda aligns with the firm’s strategy to strengthen regions, focusing on new and upcoming markets.
Schaefer admitted there are challenges but emphasized the project is bound to succeed.
“Having worked with emerging markets for a large part of my career, I can categorically say that Rwanda stands out as a country where it is about what we can do to make a project work rather than listing all the obstacles as to why something would not work,” he said in an interview to CNBC Africa.
VW joins Rwanda’s market at a time when the country is conducting the ‘Made in Rwanda’ program to support local industries and promote consumption of locally-made products.
Economic analyst Kenneth Agutamba believes VW’s entry into Rwanda lays the groundwork for other brands to tap into the market.
“It’s a big win. Every time a major international brand gets into a country, it boosts the confidence of other potential investors,” he tells FORBES AFRICA.
He adds that the investment is an opportunity for job creation in the country.
<a href="http://www.forbesafrica.com/life/2018/01/11/worlds-popular-cars-2017-included-fewer-cars-suvs/" target="_blank" rel="noopener">READ MORE: The World’s Most Popular Cars In 2017 Included Fewer Cars, More SUVs</a>
“A single car has 30,000 parts and putting them together requires a minimum of 20 people. So it’s a very labor-intensive job.”
He explains that although Rwanda is a smaller market and landlocked, it has security, and political and economic stability, among other factors rare on the rest of the continent.
“It can be a base where major brands can build their headquarters but targeting the markets around it,” he says.
Clare Akamanzi, CEO of the Rwanda Development Board, hailed the development as a very important step and a new chapter.
“The fact that Volkswagen took time to study Rwanda and found it a good business case we can invest in here, means a lot for us. It’s something that shows feasibility of such business that can thrive in Rwanda and we expect other companies to emulate,” she told CNBC Africa.
Starting next year, the company will also offer ride-hailing and public car-sharing services under the Mobility Solutions program.
Lionel Mpfizi, CEO of AwesomityLab, a local company hired to provide a mobility solution platform commended VW for its openness to local companies in an interview with CNBC Africa.
“We are very happy that VW is open to work with local companies to achieve what they want to achieve. There’s something we are bringing to the table if we are local: we have the understanding, we know the clients and we are the clients,” said Mpfizi.
&#8211; By Steven Muvunyi

IMG_6097

A Country On A Roll

He is two hours late for the interview. As we contemplate calling it quits, he speeds in with his Volkswagen Scirocco. Dressed in black pants and camouflage coat, he dashes into the changing room to prepare for the photoshoot. King. Genius. Irritating. Self-obsessed. Arrogant. Jerk. All words that have been used to describe the self-proclaimed South African “prince” of hip hop, Kiernan Jordan Forbes, alternatively known as AKA.
<img loading="lazy" decoding="async" class="size-medium wp-image-4271" src="/wp-content/uploads/2017/04/CTP5196-200x300.jpg" alt="" width="200" height="300" />
“A publication wrote an article about me with a headline ‘SA’s crowned prince’ and I thought it has a nice ring to it. What I learned in this industry is that you are what you say you are. If you say something enough times, eventually people pick up on it. So I started calling myself the prince of hip hop and now a lot of people do too,” he says.
In July, he had just become a father; his eyes are slightly puffy from sleepless nights yet he shrugs it off for the shoot and interview. He doesn’t come across as the self-obsessed, arrogant jerk some fans make him out to be. Showing his humble side he adds that he doesn’t call himself the king of hip hop, out of respect for more experienced artists.
“Wait until I get another two albums and more wins under my belt, then I might start calling myself the King.”
“Competition dead and buried in the dust I’m like the legendary Brenda Fassie…” The lyrics to his hit All Eyes On Me is a salvo full of intent.
AKA has the confidence of a superstar and success to match. His personal life, just like every other celebrity, is daily bread for South African tabloid newspapers. The buzz is more than justified. He did not break the internet, but, five years into his career, he has awards from Channel O, Metro FM, MTV African Music Awards (MAMA) and South African Music Awards (SAMA); including a coveted Black Entertainment Television (BET) nomination for the Best International Act: Africa category, and many more.
“I don’t belong exclusively to South Africa anymore. I am making a transition to belonging to the continent. I was so excited about the BET nomination because we have been working hard. Yes, we have won the SAMAs, yes we have won Metro FM awards, yes, we have won the Channel O awards, but the one thing we hadn’t done was get a nomination for a BET. We have done a lot of good work on the continent and it was great to get recognition for it.”
The rapper has more than 777,000 followers on Twitter.
“We are excited about AKA’s growth prospects in Africa and beyond. His unique approach to producing hits sets him apart from the average rap artist; this is an artist with not only innovative creative sense but with the ambition for international stardom,” Zakes Bantwini, Executive Head of A&amp;R for Sound African recordings, reportedly said when AKA signed the deal with Sony.
Born in Cape Town, he moved to Johannesburg when he was six. As a child, he developed a love for music while listening to records with his father, whom he says gave him a broad appreciation.
He started out in a teenage hip hop crew called Entity in 2002 which was nominated in 2005 for Best African Hip Hop in the KORA Awards. As Entity disbanded in 2006; AKA went off to study sound engineering only to drop out so he could brand himself as a legend. He ventured into a solo career with early hits like Mistakes, In My Walk and Do It; the latter making it to number one on the South African 5FM Top 40.
<img loading="lazy" decoding="async" class="size-medium wp-image-4272" src="/wp-content/uploads/2017/04/CTP5259-200x300.jpg" alt="" width="200" height="300" />
“I love AKA. He is the king of rap. His style is international, making it easy for him to collaborate with any international artist if he ever wishes to. His flaws are also massive but he has mega talent,” says South African fan, Mthokozisi Dumani.
Public relations company owner, Allegro Dinkwanyane, says, “AKA is a very talented artist that&#8217;s contributing to the growth of South African hip hop internationally. Personally, I think Kiernan is a much nicer person than AKA. I guess it&#8217;s a persona that works well for him as a rapper. Arrogance aside, I&#8217;d definitely rank him in my top three South African hip hop artists, but still an album or two away from being ‘the prince of South African hip hop’.”
“I like his music but I don’t understand the guy. His character is weird. Sometimes you would think he has some sort of disorder because he never lets things go. When something happens, he always wants to have a say. He needs to learn to be humble and let things go,” says Zimbabwean fan, Mercy Sibanda.
“I think AKA is the prince of African rap but his arrogance takes away from his talent. Yes, he’s good at what he does but he doesn’t need to constantly toot his own horn,” adds hip hop fan, Lebogang Mathebula.
Little has changed in his character. The 27-year-old says he has always been a show-off who speaks his mind. Fans scolded him for his Twitter rants and controversial views. At the coveted annual Durban July horse racing event, AKA kicked a fan off stage; on a separate occasion he said he will not take a photo with anyone who calls themselves a fan, yet don’t own his album; he does not open for international acts in South Africa and the list goes on.
“I don’t like it when people call it a rant. It’s not a rant, I am just expressing myself. If I wasn’t me and my personality wasn’t what it is, my music wouldn’t be what it is. You can’t separate my music from my personality. Without the personality my music wouldn’t exist,” he says.
He claims he has never tried to be controversial, as the truth is controversial enough.
“I have always been like this, before the fame and money; I have always been someone who speaks the truth. I told myself that when I make it, I will do things on my own terms. I try to be myself as much as possible. Most of the time it works for me and sometimes it doesn’t.”
“If you don’t own my album, how can you be a fan? You can afford a smartphone to take a photo with but you can’t afford R100 ($7.50) for my album? Real fans support the artists. If you come to me, you want a piece of me or my time, so why can’t you buy my album?” he says.
“The country has never seen anything like me; someone as expressive, as blunt, as honest and dedicated as I am. Everything with me is intense,” he says.
According to AKA, thinking success is easy can be dangerous.
“When you start out, you work hard and say you can’t wait for the day when you are successful. When you finally get there, you realize getting there is not hard, staying there is.”
African hip hop and Afrobeats are everywhere on the radio these days. Much of that is attributed to African artists touring the world and making their presence known. AKA has toured some parts of Europe and has worked with Nigerian stars Ice Prince and Burna Boy, from whom he has learned a thing or two.
“Nigerians work much harder than the average South African artist. They are much more unapologetic, that’s why sometimes I feel like I belong there. [In] Nigeria, artists are encouraged to be superstars, yet in South Africa being a superstar is frowned upon.”
“We love to be humble people, and there is nothing wrong with being humble. Humility is the greatest source of our strength, but also, the great source of our weakness. In Nigeria and the US they are told to be great and in South Africa we are told to be humble which makes us meek, subservient and easily taken advantage of,” he says.
Although he has opened for Kanye West, Snoop Lion, Rick Ross, 2 Chainz, Big Sean and Kendrick Lamar on tour, AKA swears he will never open for an international artist in South Africa.
“Promoters treat us differently from Kanye West and all these other artists. They get better sound, better money and better treatment, yet we would be performing in our own cities. Promoters say we should do it for exposure but exposure to whom? These are our people who know us, so why should we tolerate being ill-treated?”
According to AKA, South Africa needs to redress legacies of apartheid. He believes African artists should be respected like international artists.
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“We still have that mentality of saying ‘how can AKA and Drake be on the same stage?’ We need to address our own self-worth. Apartheid left in us the idea that we are not worth more and we need to change that,” he says.
AKA is not a hugely sentimental man, but a glimpse of his softer side shines on social media when he talks of his daughter Kairo.
“It took a while for me to figure out how to change a nappy as Kiernan insisted on doing it himself all the time. He would wake up at night during our stay at the hospital and get up to change the baby’s nappy. I remember thinking that I really needed to learn, but it felt good knowing that he was so hands on,” says Kairo’s mother, DJ Zinhle, on her blog.
When Zinhle had her baby shower she says AKA “popped in to say hi to the ladies, he walked in carrying the most adorable Melissa and Doug Giraffe, with a big pink satin bow tied around her neck”.
Since the baby, AKA says he only sleeps for three to four hours a day; instead of six.
“There is no balance in my life. I still need to find it. I am mentally tired, physically tired, I need a holiday, I need a break but there is just no time. My life is exploding, I am having a baby; I’m on tour and have interviews.”
Although reluctant to share his net worth, the 27-year-old divulges that he makes more than R100,000 ($7,500) from performing each month. He also has income from TV shows, and various business ventures. He designed a range of headphones, Bluetooth speakers and clothing items which are sold nationwide.
“I want to make sure my future is secure. By the time I hang the mic I should be able to provide a great life for my children and their children and children’s children.”
As the saying goes, “the man who moves a mountain begins by carrying away small stones”. You could argue AKA is doing this. You can also argue he has had more than his fair share of stones thrown at him. No matter, AKA wants to be the king of African hip hop.

‘Why Should We Tolerate Being Ill-Treated?’

It’s mid-September, and Volkswagen of America has a problem: It won’t have any new models coming out until the spring. Keeping VW front and ­center in consumers’ minds has drawn a group of marketing folks from the automaker and two of its ad agencies to Google’s BrandLab at its YouTube headquarters south of San Francisco. Dedicated to “evangelizing the art and science of brand-building,” the richly appointed meeting space is basically a man cave for ad creatives, complete with overstuffed couches, booze and the mother of all big screens, an assemblage of 32 flat-panel displays massed into 300 square feet of video overload.
In one corner of the BrandLab, Google’s Jeff Rozic goes to work running VW’s folks through a rapid-fire succession of video ad campaigns the BrandLab feels have worked. His earnest delivery is well-honed, courtesy of 100-plus similar “private workshops” held for potential advertisers from Coca-Cola to Toyota over the past year. VW has some catching up to do, a point Rozic makes intentionally or not by highlighting 13 travel vignettes produced by a rival, Nissan Mexico. His larger point: Don’t clutter a story with too blatant a call to action. “We shouldn’t apologize for trying to sell cars,” one VW exec protests. “Sure,” Rozic shoots back, “but you have to be careful to distinguish when you’re telling a story and when you’re selling.”
Fair point. Rozic is clearly selling—and it’s a product intended to change Google’s path. The king of the click is now lecturing one of the world’s most accomplished advertisers to forget those clicks and amp up the image ads. CEO Larry Page can go on as much as he wants about self-driving cars, wearable computers or any of the company’s other “moon shots.” But Google fundamentally remains the most disruptive advertising company of the past half-century. As its total advertising-revenue growth rate has halved in the past two years, from 29% to 15% (thanks in part to Facebook and Twitter), it’s now charging full-bore toward the biggest pot of advertising gold it doesn’t own: brand advertising, the image ads you see in glossy magazines and on television.
Most online ads—the banners that litter nearly every commercial website and, most notably, Google’s search ads—have failed to help marketers move the needle on classic advertising measures like brand awareness and intent to purchase. ­Instead, they mainly drive people to a product page to click the buy button. ­Direct marketing is lucrative: Search is still upwards of 60% of Google’s ad revenue, helping it earn an estimated 15.8% net margin in 2013—but image ads will come to dominate digital advertising in this decade.
Look at the numbers: Digital brand advertising is an $18 billion market this year, according to eMarketer. Its forecast implies that number will double by 2018, at which point it will have passed search and direct marketing, with plenty of room to grow.
Television advertising, comprising almost entirely image ads, is currently a $200 billion global market. And it’s a vulnerable one, as the medium’s iron grip on the bulk of ad spending looks a little less firm as younger people scatter to YouTube and Netflix when they aren’t Snapchatting or Instagramming on iPhones or skipping ads entirely on their DVRs. Some 75% of respondents to an Interactive Advertising Bureau poll of 5,000 ad execs expect to see some spending move from TV to digital video in the next year.
This explains the man cave. YouTube remains one of the greatest acquisitions of the Internet era. Larry and Sergey paid $1.65 billion in 2006 for a business that today would conservatively be worth $20 billion as a stand-alone. So what’s another $400 million or so to build out a brand ad business?
The return has been fairly quick: In October Publicis’ MediaVest, the ad agency for Coca-Cola, Honda and other big advertisers, inked a deal to spend tens of millions of dollars over the next year on Google video, display and mobile ads. It was Google’s first agreement with such an online partner to buy ads in advance, as agencies and marketers do on television. In November Publicis agencies DigitasLBi and Razorfish went bigger, committing to spend $100 million on YouTube and Google’s banner and mobile ad networks this year. “Google is one of the few players with a platform big and wide enough to attract these dollars,” says Razorfish CEO Pete Stein.
And Google sources insist that more of these “upfront” deals will be announced shortly, which has investors—who have driven the stock to a recent alltime high of over $1,150—feeling bullish. Tim Ghriskey, chief investment officer at the asset management firm Solaris Group, a Google investor, figures the company could capture about 6% of TV ad spending by 2020, or $20 billion a year. Given that Google’s total revenue this year will come in at around $60 billion, this is the growth the company needs to continue its dominance.
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Susan Wojcicki was Google’s 16th hire. Marissa Mayer came a few hires later, yet it was Mayer, now Yahoo’s CEO, who became the flashy female face of Google. No matter. Wojcicki (pronounced wo-JIT-ski), the senior vice president in charge of all Google ad products, plays the anti-Marissa. She favors jeans and hoodies around the office, displaying a self-deprecating plainness that one former employee says is reminiscent of Chance the gardener from the movie Being There. “She never felt she needed to be the smartest person in the room,” says another ex-colleague.
Instead, she’s become the most powerful person—male or female—in advertising. She manages effectively without drama and thus has been Page’s go-to exec for wins such as the introduction of AdSense, which pays other sites to run Google ads (now a $13 billion business), and the acquisitions of DoubleClick, an ad-serving pioneer, and YouTube. “She only works on big problems, not small ones,” says ShareThis CEO Kurt Abrahamson, who worked for her a decade ago.
Her vision of the future of advertising (and hence Google)? Since content is flowing across so many digital devices—a trend Google is trying to accelerate with such initiatives as its Chromecast device for streaming online video to TVs and its flurry of Android smartphones and tablets—she sees nearly all advertising eventually going digital, too, putting it squarely in Google’s wheelhouse.
“Advertisers will have to go where the users go,” says Wojcicki, sitting outside her office at the Googleplex, sipping a “detox” lemonade with maple syrup and a dash of cayenne. “A big chunk of dollars will follow.”
Wojcicki envisions an operating system for advertising that can connect search, display, YouTube and branded content, and bundle it all up into campaigns that span computers, smartphones, tablets, connected TVs and—who knows?—maybe Google Glass. Some marketers are moving quickly in that direction. For the recent launch of its D Rose 4 sneakers, Adidas ran ads on YouTube and the Google Display Network, a partnership of some 2 million sites, backed up by mobile ads for a second-screen experience and search ads to catch those who want to buy them right away.
For some time Wojcicki has talked about the “perfect ad,” the one that people see at precisely the time they want to know about a product or are ready to buy it. Search ads now approach that ideal for direct sales, but Wojcicki pictures image ads, supplemented by data on personal preferences and behavior, that can plant the seed for brand or product preference just as well. It’s an advertising axiom that people are more receptive to messages when they’re leaning back on the couch watching TV than when engaged in online activities. Wojcicki contends the potential is for just the opposite. “If users are engaging with something, they’re choosing to see it,” she says, and Google can use that overt choice to serve even more relevant ads.
So how would a Web display ad—largely, the vilified banner—engage?
Upstairs at Google’s display-ad headquarters off the main campus in Mountain View, Calif. scrawled equations blanket a wall-size whiteboard. The equations are a scrap of the impossibly complex mathematical formulas that power its $12.5 billion display network business. “They turn into beautiful rich-media ads,” Neal Mohan, Google’s vice president of display advertising, explains dreamily as we walk by.
When Larry Page took over as CEO in 2011, he told Mohan to “revolutionize” display ads so they’re just as useful as Google’s obscenely profitable search ads. Mohan, a veteran of pre-Google DoubleClick, is a true believer. (With a reported $100 million in stock grants to keep the likes of Facebook and Twitter at bay, he isn’t driven by the need for more money.) He has bought or built what even rivals concede is the broadest set of software needed by advertisers and publishers to sell and place ads, including a state-of-the-art ad exchange that sells space as fluidly as the Nasdaq sells stock.
Mohan, who likes to decry the 40% of “spray and pray” TV advertising he says is wasted on indifferent audiences, offers a vision of the future in which Google can marry its data about individual consumers with the reach of TV and measure the results, too.
Google can generate that reach with its display network, which ­ranges from tiny outfits to the New York Times and USA Today. It serves ads on those websites for a cut of revenue. (Tellingly, even NBC partakes, though Google has put a big, fat target on its back.) The network ­reaches 90% of the Web’s population and serves impressions to a billion people worldwide a month. It was tough sledding early on, as ads began showing up on dodgy niche sites, but an ongoing cleanup campaign has big brand advertisers increasingly interested. The number of advertisers booking space months ahead—an option chiefly used by big marketers looking to influence brand consideration—has quadrupled from a year ago, but Google isn’t offering specifics.
Still, the banner ads have been losing out to “native” ads, which use content rather than a boring banner to attract people’s attention. “Facebook is a bigger bet for us right now than YouTube,” says Laurent Fa­racci, the U.S. chief marketing officer for Reckitt Benckiser, owner of brands such as Lysol and Clearasil. Instead, Mohan has bet on rich “engagement ads” for the display network. For instance, one might expand to play videos, games or apps when hovered over for two seconds. Samsung recently ran millions of them to play a live video stream of a new smartphone and smartwatch. In June Burberry ran display and mobile ads through Google that prompted people to snap a photo of their own puckered-up lips and send the digital imprint of the kiss to a loved one.
They’re starting to work. Now used in about 1,000 campaigns daily, engagement ads command around double the price of standard banners, which vary wildly but average around $3 per thousand viewers reached. That’s partly because advertisers can choose not to pay unless someone actually views those ads—like those who pay for clicks rather than views in the banner world—so they’re more valuable. Still, branding remains a challenge for a company whose success so far derives from cold mathematics. Back at the BrandLab, there’s an elegant arrangement of two dozen digital photo frames mounted on a pedestal, all playing videos of flames. “Great stories are told around the campfire,” a Google project manager explains. Cute. Except this campfire gives off no heat. For that, Google needs some of the sizzle of Hollywood.
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The warren of studios and soundstages southwest of Hollywood is strewn with cameras, lights, toolboxes and half-empty coffee cups. One stage features stock horror-movie sets, like the hotel hall from The Shining. In another studio, three women, one of them with scissors in hand, are preparing to film a video on how to cut your own bangs. Once a hangar where Hughes Aircraft built the Spruce Goose in the 1940s, this 41,000-square-foot building is now YouTube Space LA, possibly the world’s largest production facility dedicated to online video.
It’s YouTube’s latest bid to shed its dog-on-a-skateboard-video image and make the site a cleaner, more well-lit place for big TV marketers. That bid began a couple of years ago with YouTube’s $300 million drive to create some 200 TV-like channels from the likes of Shaquille O’Neal and Amy Poehler. While they don’t have TV networks quaking just yet, YouTube has been able to command higher ad prices closer to those of TV than Web display ads. YouTube gross ad revenue jumped 51% in 2013 to $5.6 billion, netting $2 billion after payments to content and ad partners, according to eMarketer.
Here’s the funny thing, though: It turns out that some of the most popular channels are not network wannabes. They’re from producers such as PewDiePie and Jenna Marbles, invisible to those over 30. Likewise, some of the most popular ads on YouTube don’t even look like the TV ads that Google has hoped to capture. It’s dawning on big marketers from American Express to General Electric that to take advantage of the social and interactive nature of online they need to forge a new sensibility, not simply rerun TV commercials.
In a new take on its long-running Campaign for Real Beauty, for instance, Dove launched a video on YouTube in April that featured an FBI-trained forensic artist sketching two portraits of women. One was based on their own descriptions and another on a stranger’s, which produced more attractive images. By May the Unilever brand’s touching three-minute video had drawn more than 114 million views worldwide, becoming the most-viewed online video ad ever. “It’s not just 30-second ads,” says Jamie Byrne, YouTube’s director of content strategy. “It’s creating something that people want to engage with and share with friends.”
So now it’s up to Byrne, whose previous job was head of YouTube’s original programming push, to make it easy for big brands to reach YouTube’s 1 billion monthly viewers.
Similar to Rozic’s ad-campaign boot camps in the BrandLab, Byrne brings companies such as PepsiCo and Johnson &amp; Johnson to YouTube LA for a four-day workshop on creating compelling stories, videos and YouTube channels. He’s aiming to get more than 100 advertisers into the program this year, both at YouTube LA and in a new combo studio and BrandLab being built in New York.
If Byrne has his way, the new world of brand marketing online will look a lot like a shoot at an unassuming neo-eclectic house in Anaheim Hills, 45 minutes southeast of Los Angeles. In the living room a crew of six is filming the sixth episode of Grace’s Faces, on Bobbi Brown Cosmetics’ I love makeup channel on YouTube. It features Grace Helbig, a 28-year-old YouTube star whose own self-produced channel, Daily Grace, draws more than 2 million subscribers to her wacky takes on life. For this new show, Helbig shows up at the doors of fellow YouTube stars to do a makeover.
Her subject this day is Rebecca Black, the 16-year-old who became an instant star in early 2011 for her self-produced monotonous pop hit, “Friday,” that year’s most-watched video on YouTube. Marc Reagan, manager of artistry at Bobbi Brown, is showing Black how to apply various kinds of makeup. Dull barks from a dog banished to the garage only add to the authenticity, apparently. Helbig jumps into the frame, bubbling with a whiff of irony, “You look like an angel!” For a companion show, Touching Your Stuff, Helbig prowls the house rifling through personal effects. “In this medium you can get your Idol moment without paying $20 million,” says Reza Izad, whose Collective Digital Studio produces I love makeup and more than 200 other channels, such as the Annoying Orange—a piece of talking citrus that heckles other fruit until they get sliced with a knife.
It’s all pretty nutty, but there’s nothing amateur about Grace’s Faces. Or even overtly commercial. Bobbi Brown isn’t mentioned anywhere in Grace’s Faces despite the use of its cosmetics. Still, the company says it’s happy with the 300,000 views the channel got the first week and the 70,000 channel subscriptions it drew in the next two weeks. “We felt like comedic programming would be in line with our brand personality and would resonate with a younger audience,” says Bobbi Brown President Maureen Case. Marketers don’t pay YouTube to run the shows, but they do pay to run lots of ads to drive people to watch them.
Google will ultimately win this race for a simple reason: Video ads perform better than TV spots, says David Cohen, Universal McCann’s chief investment officer, based on multiple studies his agency has done. “But TV advertising is a frictionless system,” he adds, “a well-oiled machine.” Google can play around with Larry Page’s moon shots, one of which might eventually land, but what will pay for those flights of fancy? Making digital display just as free of friction, something Google knows how to do. It’s just a matter of time.

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