Automotive transformation: billions for VW subsidiary Cariad
The German automotive industry is under a lot of pressure - that's nothing new. But the individual manufacturers are taking different paths. VW has had an independent business unit, Cariad, since 2020. Now VW Group CEO Herbert Diess tells Handelsblatt that VW will invest 2.5 billion euros in Cariad. Per year.
The challenge is not the electrification of the car, but digitalization. In the In an interview with Handelsblatt, Diess saidthat VW currently only develops around 10% of the software itself, but is aiming for a share of 60% in four years.
Diess sees autonomous driving as one of the main drivers, which he sees as a dominant element of comfort. This certainly explains why Cariad is based in Ingolstadt (Audi) and not in Wolfsburg. In order to implement the vision, Cariad is developing an operating system for cars (VW.OS), which is to be used in all vehicles in the medium term.
Programmers at Cariad in open-plan offices?
I think it was a smart decision to move software development to a separate subsidiary instead of keeping it within the parent company. Software development is difficult. An environment with long-standing vehicle technicians could quickly lead to conflicts and politics. From this point of view, I even wonder whether a location further away from Audi would not have made more sense. VW's path at least seems more sensible to me than that of Daimler, which transformed the Group itself into a software company want to transform.
Managing the developers will certainly be a major challenge. The Cover picture at heise Autos shows developers in an open-plan office. That alone will put off many good programmers, because the most talented prospects will be put off by such an environment.
Perhaps this is just bad PR, because Diess is basing his statements on Apple, even more so than on Tesla. However, in order to keep up with Apple, Cariad must also act like Apple. That also means appropriate structures and working conditions. I am curious.
Investment in German automotive innovations urgently needed
However, the movement in the German automotive environment is fundamentally welcome and urgently needed. In a Investor round three years ago (2018), a few figures were quoted in the automotive sector. In the seven years from 2011 to 2018, the USA invested US$ 56 billion in automotive, China over US$ 30 billion. Germany, on the other hand, invested just one billion. Whether these figures are reliable remains to be seen, but the core message is clear: If Germany wants to be the world leader in automotive, it needs to invest in a completely different way.
Fortunately, a lot has changed here in the last few years. According to the VDA, investment in research and development in the Automotive in Germany at €45 billion per year in 2018. That's a different number.
Image by Tayeb MEZAHDIA from Pixabay
