Here we go! That is the message that runs through Christian Senger’s speech on this day. In less than two weeks, the Car.Software organization within the Volkswagen Group switches from the start-up phase to operational mode. Starting in July, it will use its own budget and staff to develop a powerful digital platform for all Group brands and markets. “We are moving from planning to doing,” says Senger, CEO of the Car.Software organization.
During a presentation in Ingolstadt, Senger defines ambitious goals: “By 2025, we want to increase our own share of our cars’ software to 60 percent.” Today the proportion is less than 10 percent. Senger admits that there are certainly other ways of doing things in the automotive industry: Some car manufacturers enter into close development partnerships with large IT groups, while others concentrate on pure vehicle construction and buy additional software. “It’s out of the question for us. We can and we want to develop our software platform ourselves,” emphasizes Senger. He gives three reasons for this strategic decision.
Experience: “We are familiar with the complexity of the automobile – this distinguishes us from competitors outside the industry,” says Senger. Volkswagen has decades of experience in vehicle development and production. In the coming years, the Car.Software organization will invest more than seven billion euros in its activities. “This is a strong undertaking,” says Senger.
Control: “Volkswagen wants to retain control of the entire vehicle architecture – that includes the electronics,” emphasizes the CEO of the Car.Software organization. This is the only way to ensure long-term competitiveness. “For this reason alone, we cannot give third parties complete access to data in our vehicles.” Future digital value creation should remain within the company.
Economies of Scale: “Software develops its potential with the increasing number of vehicles. This applies to cost advantages, but also to learning from data. We have this scaling advantage on our side,” says Senger. With around 11 million vehicles sold in 2019 alone, the Group has excellent prerequisites in terms of size. “Volkswagen is in the best position to develop its own software platform.”
In order to make optimum use of economies of scale, VW.OS will in future provide a standardized operating system for the Group’s car brands – with the Volkswagen Automotive Cloud as the technical backbone. “The Automotive Cloud is technically ready to go. We are expanding its range of functions and preparing to connect the first vehicle models,” says Senger.
Hardware, operating system and applications will be separated from each other in the future. The new software architecture will, for example, enable software updates and services “over-the-air”, so that customers can download new products at any time and keep their vehicles digitally up to date. “Innovation cycles are getting shorter. We will bring new applications to market much faster,” says Senger.
Many software experts already work at Volkswagen – their expertise is now to be bundled in the Car.Software organization. Over the next few months, the new unit aims to recruit further specialists from Group brands and companies, so that by the end of 2020, 5,000 specialists could already be working under one roof.
The number of skilled workers is then to be further increased, also outside of Germany. About half of them will work in Europe, the majority in Germany. About one third of the experts will program in China. There will be further units in North America, Israel and India. “Our goal is a culture for doers. The brightest minds will find working models with us that are consistently oriented to the requirements of modern software development,” says Senger.
On the one hand, the software unit is intended to develop digital high-tech products – and on the other hand, it is intended to help the transformation of the entire company to move forward at a fast pace. Senger: “We want to develop Volkswagen into a software-driven automotive group.”