In an exclusive interview with the Chosun Ilbo on Wednesday during an international motor show in Tokyo, the Volkswagen CEO said that because diesel models are more environmentally friendly than fuel cell or electric cars, and their gas mileage is usually higher, they are certain to attract more customers in the future.

Global auto production plants will move to Eastern Europe or China, as these regions have low labor cost, while the head offices of the car firms will run technical development centers, Pischetsrieder said.

Korean car makers, including Hyundai and Kia, have been able to rapidly improve their technical prowess, but their production will be spread around the globe because the firm's production costs, including labor costs, have been rising sharply, he added.

The Volkswagen chairman is regarded as the most influential manager in the European auto industry. He worked as the chairman of BMW for seven years since 1993 before taking the current post in 2002.

What would be the most important factors in deciding a car firms' competitiveness?

The first is technology. The second is quality and brand value. The third is a global management that best utilizes various resources around the world. To give an example, several years ago in Europe, it was very popular for European firms to outsource software-related technology to India. That was a shortsighted strategy. People in India are not fools. Intelligent engineers in the country do not work for the same wages as other Indians. They fled to Europe or the United States to work for salaries about four to five times higher than in their own country. So firms in India had to pay higher wages to employ top-quality engineers. This observation does not apply to blue-collar workers. In the future, the gap in the production cost between car production plants in China, the Czech Republic and those in the United States and Germany will narrower. The head offices of the car firms will do R&D while sending out their production lines to countries with low labor costs, and no global car producer will be able immune from such a trend. The popular term, globalization, doesn't mean going out to the world. It is a system in which a firm takes advantage of various resources in other countries, so that a company can make the most of its own core technologies.

Korean carmakers have been paying most of their attention to labor relations.

The union-management disputes will disappear once a cooperative system takes root. Assume workers have a 48-hour workweek in Korea and 30 hours in Germany. Working conditions would be the most important factors in raising the corporate competitiveness in both workweek systems. Volkswagen, however, doesn't worry. When the staff at the firm's head office in charge of technological development quit work in Germany, those in Brazil take over the same job and afterwards, those in China will do the same. These global staff members will do their job until their colleagues in Germany comes back to work the next day. Under this working system, Volkswagen's research centers or production plants are operation 24 hours a day, 365 days a year.

What is the future of the auto industry?

Keep in mind that the consumers are always right. A company survives when it provides cheap and convenient products to consumers. The same is true for the auto industry. What's important for automobiles is that they should give high gas mileage, and be efficient and safe. In this sense, diesel-powered cars will dominate the world's car markets in the next 10 years.

What are the key factors for successful managers of car firms?

Do not follow in others' footsteps. Start with the same general facts, but arrive at different ideas and conclusions. (Kim Young-soo, yskim2@chosun.com )