This is an epoch-making milestone.
More than 30 years ago, the Volkswagen Group, the first to enter China to establish a joint venture automobile company, made a new layout after the opening of the automotive industry share ratio in 2022.
This move will have a bearing on the core competitiveness of the Volkswagen Group in the Chinese market for the next 30 years.
On April 28, CARIAD China announced the establishment of cariad software companies outside of Europe, highlighting the uniqueness of the Chinese market as the largest single market in the world for the Volkswagen Group. More importantly, it reflects the new thinking and layout of Volkswagen Group's China strategy in the post-joint venture era.
Evergreen, CEO of CARIAD's China subsidiary
Dirk Hilgenberg, CEO of CARIAD, said: "China is one of the most dynamic and promising mobility markets in the world, and the establishment of the China subsidiary is another important milestone for CARIAD and demonstrates CARIAD's strong commitment to the Chinese market and local consumers. Together with the Chinese team, we will work towards the same goal and use software to 'weave' the future of mobility." ”
THE CHINESE FACE OF CARIAD
CarIAD was formerly known as car.software organisation, the software division of the Volkswagen Group, which was established in 2020. Later, as the software's priorities were raised, the division became an independent subsidiary and was named CARIAD, currently led by Volkswagen Group CEO Herbert Diess himself.
CARIAD brings together developers, engineers and designers from several software divisions of the Volkswagen Group to work together with a common goal of developing a unified software platform and technology stack that will enable volkswagen, Audi, Porsche and other beloved car brands to always engage customers with fresh digital experiences.
Currently, CARIAD has a team of around 5,000 software developers, engineers and designers worldwide, whose mission is to transform the Volkswagen Group into a true software-driven automotive company. CARIAD aims to increase the proportion of in-house developed software to 60% by 2025.
However, CARIAD does not rule out improving its software capabilities through cooperation. For example, CARIAD partnered with Microsoft to build the Volkswagen Cloud and is collaborating on an autonomous driving platform that provides a development framework for complex autonomous driving functions.
CARIAD is based in Germany, but is about to establish subsidiaries in different parts of the world. There are currently nearly 5,000 employees from more than 70 countries in software centers in Wolfsburg, Ingolstadt, Stuttgart, Berlin and Munich. China is CARIAD's first subsidiary outside of Europe.
CARIAD China is led by two Chinese faces. The CEO in charge of the strategy is named Changqing, and he is a veteran Volkswagen person. Evergreen has more than 30 years of experience in the Volkswagen Group, holding key positions in the group's development department and product management department, and has led the development of modular platforms such as MQB and MEB, which Volkswagen is proud of. When Volkswagen executives decided to set up a CARIAD branch in China, Evergreen became the perfect candidate to lead CARIAD China.
Changqing said that CARIAD China's mission is "to develop in China, to innovate for China; to develop in China, to innovate for the world." CarIAD currently employs more than 600 people in China and expects to double by the end of 2023, with more than 90 percent of them being local software talent. At the same time, CARIAD is building R&D forces in Beijing, Shanghai, Chengdu and Hefei to gradually build a national distributed R&D network.
The technical leader at CARIAD China is Dr. Wei Sun, who joined the Volkswagen Group in 2017. He is the highest-ranking software engineer in the Volkswagen Group in China. Although his resume at volkswagen group was only 5 years, his years of experience at IBM Research institutes and years of experience in automotive-related software development made him immediately a talent he wanted under the Volkswagen Group's software-first strategy. Appointing him as CTO of CARIAD China is a recognition of Sun Wei's ability by the Volkswagen Group and an important embodiment of its emphasis on software talents.
Sun Wei, Chief Technology Officer of CARIAD's China subsidiary
"By accelerating the speed of R&D iteration, creating innovative software development concepts, and introducing a new technology system for Chinese consumers, we will more efficiently meet the diverse needs of local consumers, continue to provide them with a fresh, intelligent, interesting and safe travel experience, and ultimately achieve the goal of 'R&D in China and innovation for China'," Sun Wei said. ”
It is reported that the Chinese team will promote the development of software products for Chinese consumers, including advanced driver assistance systems and autonomous driving, next-generation intelligent interconnection functions, intelligent cockpit and body design, big data and software operating systems. In addition, CARIAD's China subsidiary will work with its European headquarters to develop a unified and scalable software platform for all Of the Group's brands to meet the specific needs of different markets. The entire technology stack will be launched around 2025 and will be pre-equipped with L4 level autonomous driving technology.
Change the R&D process of traditional joint venture car companies
CARIAD China will disrupt the R&D process of both Chinese and foreign parties in the era of joint ventures, and further highlight the localization of R&D based on localization needs.
Changqing said that the establishment of CARIAD China will change the development process of launching abroad first, then localizing and then going online. "For the products and functions that Chinese consumers need, we will first cooperate with the headquarters to develop them to shorten the time to market and better meet the needs of Chinese users."
The establishment of CARIAD China is also a testing ground for Volkswagen to try to be more agile in its R&D process. "Our goal is to cut in half the product planning time that used to take half a year to a year, so that the development start-up time can be significantly ahead of schedule." Sun Wei said. This will test the public's reform of the lengthy approval process.
Sun Wei also said that CARIAD China's primary philosophy in research and development is to become more agile. Because the Chinese market and the needs of Chinese users are changeable, enterprises must always be at the forefront of user demand.
Based on this, CARIAD China has summarized and formulated its own concept of measuring new product development - "OIC". The "O" stands for originality, because only through originality can Volkswagen take a place on a new track. Insisting on originality is still the basis for Volkswagen to achieve industry leadership.
The "I" stands for attraction. At present, the main force of domestic automobile consumption is young users, who have a special love for digital products. When they favor a digital product, they share it with their friends. CARIAD China's goal is to deepen the understanding of users so that their products have the ability to arouse users' desire to spread.
"C" stands for car continuity. CARIAD China's goal is to let the users in the car completely say goodbye to the mobile phone holder, and the products made are both loved by young people and related to all aspects of the vehicle, rather than the vehicle functions based on mobile phone usage habits. "We're going to make a real 'car native' app." Sun Wei said.
Inspired by the new R&D concept, all CARIAD Employees in China immediately took action and launched a new project in the second month of the company's existence, "Forward". The project iterates on a quarterly basis. The team first conceived several innovative applications that Chinese users liked, and then selected the applications that had the potential for mass production, with the ultimate goal of mass production on the car.
In the first "Forward" campaign in the first quarter of 2022, the team came up with more than 80 innovative ideas, of which 6 were the most promising in the market. CARIAD China showcased to the media one of the applications known as the "Rainbow" project.
The app allows users to enter the car, all the digital elements in the car will be intelligently matched with the clothes worn, forming an integrated "wear" smart cockpit experience. Digital elements such as desktop themes, ambient light band colors, greetings and music in infotainment systems can be intelligently adjusted to the user's outfit.
The application that creates the digital atmosphere in the car into a consistent outfit with the user is CARIAD China's self-developed user experience application design and development software - "Rainbow Composer". CARIAD China also said that in the future, "Rainbow Arrangers" will be open to experienced designers and encourage the creation of new innovative applications, and possibly even further open to consumers, allowing car owners to personalize their cabin environment.
It can be seen that under the inspiration of the "OIC" research and development concept, CARIAD China has begun to act and has begun to produce.
Sun Wei summarized the R&D characteristics of CARIAD China into 4 keywords - more agile, more innovative, more autonomous and more local. "These are four dimensions that are very important in our daily R&D work." He said.
Local R&D feeds back to the world
Unlike many joint ventures in the past, which set up local R&D teams in China to only develop functions for Chinese users, CARIAD China does not only develop software functions for China.
"We have completed our calculations and planning, and the R&D participation of the Chinese team will account for 70% of the next generation of scalable software platforms, including development entirely in China and collaborative development with the German team." Evergreen said. The next generation of scalable software platforms will be used in all Volkswagen Group products.
It can be seen that CARIAD China will have greater authority and more decision-making power.
This year, for the first time ever, the development of Volkswagen's HMI (Human-Computer Interaction System) was transferred from Germany to China, with CARIAD's Chinese subsidiary in charge of research and development.
"Chinese users have very different needs for HMI, so the Group decided to transfer HMI research and development from Germany to China. In the near future, we will see the user experience of the new Volkswagen HMI. Evergreen said.
This is the embodiment of the more localized research and development of CARIAD China, and it is also a symbol of CARIAD China's greater authority. Because the new HMI will not only be delivered to Chinese users, but also may be pushed to global users in the future. Among them, Volkswagen sees that the needs of Chinese users lead the global trend.
Sun Wei also revealed that CARIAD China has independent decision-making power in more aspects. For example, they have made a comprehensive transformation of the talent acquisition process to achieve the goal of quickly recruiting the right talent. "CARIAD China has promoted a new talent incentive mechanism, and we have received all-round support from CARIAD headquarters around the training, recruitment and compensation of talents."
Che Yun summary
The establishment of CARIAD China makes us feel strongly that the Volkswagen Group has changed its approach to software development.
Previously, the software teams of some multinational companies in China mainly recruited project management personnel who were responsible for docking suppliers. And now, CARIAD China is recruiting people who can actually write code.
In the world of software and the Internet, China and the world are basically two separate existences. In the era of software-led smart cars, the past car-making experience also needs to change dramatically.
Chinese users no longer value only laser welding and leather durability, the human-computer interaction experience and open software application ecology in the car are becoming the focus of users' car purchase and car use. Setting up a software team in China became a must.
Volkswagen sees the future clearly, but also sees China, and the Volkswagen Group, which has been deeply involved in the Chinese market for more than 30 years, is planting the first new seeds for the future.