The Volkswagen Group is increasing its capability in the digitization of its vehicles: the share of the car software development is to rise to at least 60 percent by 2025. The new “Car.Software” unit will be responsible for essential parts of software development for vehicles and cloud platforms in all brands and regions. Christian Senger, member of the Brand Board of Management of Volkswagen and responsible for Digital Car & Services, explains the new software strategy.
Mr Senger, you are a member of the Board of Management for a department that didn’t exist at Volkswagen before: Digital Car and Services. What was your first official act?
Firstly, it is very important to me to tell everyone what we want and how we do it. Volkswagen develops, produces and sells superb cars all over the world. But when it comes to software, we’re not yet one of the big players. Of course, there are many questions. Where do we want to go with this? How can this work out? And sometimes also: Can we manage it? I am positive that we can! Together with my team, I want to show that Volkswagen can also achieve excellence in this area.
Why is digitization so important to a car company?
A Volkswagen becomes part of the digital world of our customers: fully networked and always online. Our customers expect that from us, so we see it as our duty. We can’t convince our customers with retro charm. Our in-vehicle software must be efficient, stable, secure and updated quickly via cloud connectivity.
Software is already considered a major complexity driver today. When will Volkswagen reach its limits with this?
The crosslinking of electrics and electronics is extremely complex and costly. And the required input continues to rise because the demands on the digital performance of our cars are also increasing. That’s why we need to manage complexity better and become more efficient. It also means developing much more software ourselves in the future and thus reducing the cost.
That sounds like a contradiction. You want to develop more software yourself, but reduce the effort …
It’s not a contradiction. It’s the solution. The main burden today is the interconnectedness of hardware and software in the car. Just one example: currently, up to 70 control units operating with software from 200 different suppliers must be networked in vehicles of the Volkswagen brand. We devote a large part of our energy to technical integration and rely very much on the developments of third parties. This is not a good model for the future. We need to be the ones who develop the software, set the standards and make them available to all brands and suppliers.
What is the share of self-developed software today?
Today, our share is less than 10 percent. That is clearly too small. In the Volkswagen Group, we want to achieve a share in software development of more than 60 percent by 2025.
“Currently, we have to network up to 70 control units in Volkswagen brand vehicles”
How do you plan to achieve this?
Volkswagen has already taken an important step. We have separated organisationally the development of hardware and software in the company, and incidentally we’re the first car manufacturer to do this. This is important because software follows much faster development cycles. We’re continuing on this path. We want to form an agile “Car.Software” unit and bring together more than 5,000 experts and top talent by 2025. The experts will focus completely on vehicle digitization and development of vehicle-related services.
What is the goal behind it?
To transfer the platform expertise that Volkswagen has in hardware to software. We are developing a software platform that is used by all Group brands and in all regions. Specifically, it’s about a unified vehicle operating system and the associated cloud platform, the Volkswagen Automotive Cloud.
How do you build this new unit?
We go step by step. We will bring together experts from brands and companies within the Group, but we want to focus much more on attracting top professionals from the IT and tech industry. Strategic investments and acquisitions are also an option.
What do you see as a future priority for software development?
A clear answer: safeguarding the timely production start of our cars. In general, we will be measured by our ability to always deliver reliably.
Will the major brands in the Volkswagen Group still retain their own software expertise?
Yes. This makes sense, because software and all digital functions that can be experienced by our customers will contribute even more to brand positioning in the future. The division of labour is simple: in our responsibility to the Group, we will define the software platform with basic functions for all and in this way fill a virtual shelf which the brands can then take from. The brands then have the opportunity to individualize certain basic functions. And, unaffected by this, the technical development departments of the brands retain their responsibility for hardware-related development.
What do Volkswagen customers gain from this reorganization of software development at Volkswagen?
Our customers profit substantially from this. In the future, you’ll experience cars from Volkswagen that are even more dynamic, exciting and individual. The key to this is the unified software platform with its standards. This is how we can rethink software development, shifting the focus to creation. We’ll provide vehicle updates, useful services and exciting new features quickly and reliably.
Mr. Senger, one final question: What is your vision for the software “Made by Volkswagen” in 2025?
Many developments from the Volkswagen Group are today regarded as a seal of quality for the technical progress of the automotive industry. An example: For many millions of people, Audi’s famous “Quattro” label is the measure of things in terms of all-wheel drive. That's exactly what we want. If people look at our cars in a car dealership or virtual showroom in a few years, they should see our software logo at the vehicle. That will be a quality seal.