It is urgent to make up for the shortcomings of intelligence The public "hand-picked" Chinese suppliers

In the past, the localization of joint venture car companies was more reflected in non-key components such as interiors and vehicles. Today, due to the increasing demand for automotive intelligence, Chinese suppliers are beginning to play a more important role.

Recently, Volkswagen Group China announced that it is adopting a procurement strategy that focuses more on China, inviting Chinese technology companies to participate in the group's global procurement, and further promoting the strategic transformation with software as the core.

This is the first time that a Chinese supplier partner has been invited to participate in the global procurement of the first production phase of the Group's models, providing hardware for pure electric models based on the SSP platform (Scalable System Platform) and equipped with the CARIAD E 2.0 software platform, which will be launched in Europe and North America in 2025. About 20 local Chinese suppliers participated in the recent CARIAD E 2.0 hardware procurement online kick-off meeting in Beijing.

For the industry, this actually releases a signal that Chinese local suppliers in the intelligent track have the possibility of competing with foreign first-tier suppliers.

The public urgently needs to make up for the shortcomings of intelligence

I have to say that from the current point of view, in terms of intelligence, Volkswagen Group has a more obvious shortcoming in the Chinese market.

Although, Herbert Diess, CEO of Volkswagen Group, has said: "Intelligent (self-driving) cars are the real 'game changers' in the automotive industry, not electric vehicles." "However, we see that Volkswagen's latest ID series is still mainly labeled with driving control, rather than intelligent.

PwC once said in a research report that the ID series is an excellent electric vehicle, but it is not smart enough. Driven by Tesla, Weilai, Xiaopeng and Ideal, the Chinese market has entered the second stage of electric vehicles: electric vehicles + smart cars. Europe is still in the first stage, so the ID series can sell well in Europe, but in China, the response is mediocre.

The most typical place in the analysis is the intelligent driving domain controller. Even Volkswagen's latest ID series of pure electric vehicles has only achieved the landing of two major domain controllers in the cockpit and body server.

The performance of Volkswagen in terms of intelligence at this stage may be determined by its own development rhythm.

Earlier, Volkswagen established cariad, an automotive software company that plans to develop an industry-leading vehicle-grade software platform in 2025 that will be used on all Volkswagen models. The CARIAD software platform will undergo three versions of the change.

The first version is E 1.1, which enables vehicles built on the MEB platform (such as volkswagen ID.4, Skoda Enyaq, and CUPRA Born) to receive software updates via OTAs.

The second version, E 1.2, offers new AV systems and OTA upgrades for Audi and Porsche models (e.g., Audi A6 e-tron, Porsche Macan, and OTA upgrades) based on the PPE platform.

The third version is E 2.0, which will serve as a common software platform for all Volkswagen Group models and support the operation of L4 level autonomous driving software.

Today, Volkswagen has held the CARIAD E 2.0 hardware procurement online kick-off meeting, which clearly shows that Volkswagen has entered the third stage.

Volkswagen plans to launch E 2.0 in 2025, which will be combined with the Mass Operating System (VW. OS) and Volkswagen Cloud (VW.AC), adapted to all volkswagen group models, equipped with L3 level autonomous driving technology, and ready for L4 level automatic driving, mobile travel data is interconnected in the background. E 2.0 will be applied to the Artemis project in 2025 and mass production at the Volkswagen Trinity project in 2026.

Volkswagen Cloud is the infrastructure that solves the problem of vehicle online, Volkswagen and Microsoft, including data for each vehicle sold by the Volkswagen Group, and support online services and updates, vehicle data can be uploaded to the cloud, can process the road data collected by autonomous vehicles and the exchange of information between vehicles.

By 2030, CARIAD aims to connect up to 40 million cars worldwide to the Volkswagen Group's automotive cloud. Volkswagen's operating system VW. The OS will be available for all Brands in the Group and will be tightly integrated with the Volkswagen Cloud. Volkswagen plans to create a new software ecosystem where brands, consumers, and developers can participate directly in building a software ecosystem to meet individual customer needs.

Volkswagen wants to choose a Chinese supplier?

About 20 local Chinese suppliers participated in the CARIAD E 2.0 hardware procurement online kick-off meeting, focusing on digital interconnection, smart cockpit, autonomous driving and shared mobility.

It is worth mentioning that before that, the cockpit and body domain of the Volkswagen electric vehicle ID. series adopted the scheme of overseas suppliers such as LG and Continental.

Why does Volkswagen want to include Chinese suppliers in its procurement system?

First of all, China is the most important market base for the masses. The data shows that the Chinese market accounts for about 40% of the total mass global market. In the era of vehicle electrification, Volkswagen can still stabilize the European base camp, but if it wants to continue its previous position in the era of fuel vehicles, Volkswagen must make a breakthrough in the Chinese market.

Mr. Mingjie Pei, Executive Vice President and Head of Purchasing Department of Volkswagen Group China, said: "China's automotive industry has developed rapidly in the past few years, especially in the fields of electronic technology and cutting-edge technology. The shift of our procurement strategy to China will allow us to better leverage cutting-edge technologies and innovations to help and accelerate the Group's electrification transformation. We will work with Chinese suppliers to create future-oriented digital solutions and reshape the mobility ecosystem. ”

The Volkswagen Group expects its supplier partners to provide innovative and flexible technical solutions to meet complex procurement needs, with superior industrial production advantages, excellent work efficiency and the ability to coordinate supply chains. The supplier's technical solution will be evaluated by a team of engineers at group headquarters.

In addition, the Group expects its supplier partners to uphold the vision of building a sustainable supply chain and to recognize and support the Group's strategic goal of achieving carbon neutrality by 2050. Under the carbon neutrality strategy, the Group has worked with partners and suppliers in China and around the world to develop a roadmap for the use of renewable electricity – by 2030, the Group's suppliers will use 100% renewable electricity.

Suppliers that meet the Group's business needs and sustainability requirements are expected to apply their technical solutions to SSP-based models that will be put into production in Europe and North America in 2025.

Nowadays, Volkswagen "hand-picks" Chinese suppliers, on the one hand, because the requirements of the European market for intelligent configuration are not urgent enough, and the domestic market has formed a considerable demand and market foundation, and the huge number of users can also provide considerable data and information support for its intelligent development; on the other hand, it also shows that China's local Suppliers have considerable strength in the intelligent track.

Earlier, foreign media reported that Germany's Volkswagen Group was negotiating with Huawei to acquire its autonomous driving division for billions of euros. The group's top brass has been negotiating the deal for months, which also involves a technical system that Volkswagen is not good at.

Some insiders said that if Huawei's automatic driving department can be acquired, it will not only help the public to better make up for the shortcomings of intelligent cockpits and automatic driving, but also achieve localization innovation relatively well. If it can occupy a place in the Chinese market, it will also have a strong competitiveness in the global market.

In addition, Volkswagen Group's software company CARIAD will also set up a branch in China and release a lot of localization R&D authority, changing the classical automobile R&D process in which the development rights were previously concentrated in the German headquarters.

Che Yun Summary:

In the previous era, the localization of the whole value chain of foreign brands emphasized more cost advantages brought about by the localization of parts and components, so that consumers could enjoy the value of joint venture products at lower prices.

In the new era, in this China-led automobile revolution, the transformation of traditional foreign-funded car manufacturers has ushered in challenges, and how to deeply carry out localization and upgrading is a problem that every enterprise needs to think about. Compared with the transformation of multinational large car companies in any other industry, the difficulty coefficient is even greater, and even the internal obstacles are greater than the external environment.

From a positive point of view, the current industry to achieve fully autonomous driving cycle is very long, such as Volkswagen such as traditional car companies can slow work out of the work; on the other hand, car companies can rely on Tie1 or Tie2 suppliers, for the domestic supply chain is an opportunity.