The new company is temporarily named Yi driving intelligent technology co., LTD.
Author | Tetsu Ta
Edited by | Wenliang
In recent years, it has become a trend for traditional OEMs to set up software subsidiaries. For example, SAIC and Zero Beam, Toyota and Woven, Volkswagen and CARIAD. Among them, CARIAD has ushered in an important move in the near future.
CARIAD means Car. I Am Digital, responsible for building a unified software and technology platform for all Volkswagen Group brands, including a unified operating system, E/E architecture and automotive cloud. Nearly 40 million Volkswagen Group models are expected to be equipped with software systems developed by CARIAD by 2030.
According to its website, CARIAD, which employs more than 5,000 people, has R&D centers in five German cities and regions, while its first subsidiary outside Europe has been officially launched.
On April 28, CARIAD's Chinese subsidiary was officially launched at the Volkswagen Group's "China Strategy Conference". Through a half-hour livestream, volkswagen group elaborated on CARIAD's positioning and local strategy in China.
This is a move by the Volkswagen Group to accelerate its digital transformation, and it is also the beginning of the first time that the Chinese team has deeply influenced the Volkswagen Group.
Mission of the CARIAD China team
Compared with the positioning of the headquarters, the task of the CARIAD China team is more clear and detailed, mainly to develop software platforms, advanced driver assistance systems, autonomous driving and intelligent interconnection functions.
As the Volkswagen Group's software technology innovation center in China, the CARIAD China team is building full-stack software R&D technology. At present, CARIAD is developing a software platform for the group's brand building, which is divided into three platforms.
The first is a mass-produced software platform for MEB platform models, which enables OTAs for specific models. It is said that the Chinese team will dominate the Chinese ID series product OTA, which is expected to be achieved in the second half of 2022.
The second is a high-end software platform for the PPE platform, which is used to create a new generation of pure electric models, supporting infotainment functions based on the Android open source system and advanced driving assistance system, which can be used by some Audi and Porsche models to achieve OTAs, and the platform is expected to be released within the next two years.
The above two platforms are China-specific application products developed by the Chinese team, and the last platform will be applicable to all products of the Volkswagen Group.
It is reported that the platform will be launched in 2025, supporting Volkswagen's self-developed operating system VW.OS, which can connect to the Volkswagen Cloud and is equipped with L4 level autonomous driving technology. The Chinese team will lead and participate in more than 70% of the platform's R&D work, and be responsible for local R&D, adaptation, and development of data backends that meet China's data compliance requirements.
To appeal to Chinese consumers, the CARIAD China team is creating unique car-based experience capabilities.
In terms of intelligent networking, CARIAD China team is developing three intelligent network functions, namely traffic signal information, danger information warning, and danger information prompt:
The traffic light information function will provide the driver with traffic light information on the road that is accurate to the second.
The hazard warning function is based on C-V2X technology and can be applied in 6 different scenarios. For example, when there is a traffic accident in front, the vehicle will broadcast early warning information to the surrounding vehicles in real time, prompting the rear vehicle to prevent rear-end collisions.
The hazard warning system can be applied in cases where the field of view is obstructed. Based on the network connection technology, the Volkswagen cloud control platform notifies vehicles equipped with this function of real-time traffic accidents within a range of 40 kilometers.
According to reports, the traffic light information function has been applied to the latest Audi models in the Chinese market.
In addition, the team is working on a research and development called "Rainbow Project", which features the free combination of vehicle functions and software technology to create a software-defined intelligent cockpit experience.
Inspired by the freedom of young people to wear, the CARIAD China team tried to closely link the smart cockpit with the user's wear. Specifically, the rearview mirror artificial intelligence camera will recognize the user's clothing color and style, and automatically adjust the theme desktop, ambient lighting with color, greetings and music of the entertainment system that fits it.
To support this implementation, the CARIAD China team is developing a unified, scalable electrical and electronic architecture and VW.OS software system operating platform.
By consolidating dozens of electronic control units into several domain controllers, as well as simplifying ECU complexity, they could reduce the current body harness by 55 percent, enabling more flexible software-defined.
CARIAD's Chinese subsidiary, tentatively known as Yichai Intelligent Technology Co., Ltd., already has more than 600 employees and is expected to double by the end of 2023, of which more than 90% will be local software talents. At the same time, CARIAD is forming R&D teams in Beijing, Shanghai, Chengdu and Hefei.
Why is it set in China
In Seattle and Silicon Valley, CARIAD also deployed related teams, and its software research and development personnel concentration is higher than in China, but CARIAD chose to set up its first subsidiary outside Europe in China.
At the press conference, Changqing, CEO of CARIAD's China subsidiary, gave the answer: China is leading the digital transformation of mobility and is also the largest single market for the Volkswagen Group.
Simply put, it is to absorb China's excellent software developers and maintain the largest market. So, is that really all there is to it?
Since China replaced Germany as Volkswagen's largest single market in 2009, Volkswagen's Market share in China has accounted for more than 30% for many years, even in the stage of the transition from fuel vehicles to new energy vehicles. But in this land, there are competitors that deserve the vigilance of the Volkswagen Group.
Recently, Volkswagen Group has exposed its main competitors in the fields of brand, vehicle, technology platform, software, battery and other fields, and Chinese companies such as Xiaopeng Automobile, Weilai, BYD, and CATL are prominently listed. These local Chinese companies are collectively changing the minds of Chinese auto consumers, and Volkswagen does not seem to be fully prepared to deal with the changes. One of the manifestations is that the sales of the Volkswagen ID series are less than expected.
After November 2020, Volkswagen will enter the Chinese market with five electric models of the ID series.
The ID series is the proud work of the Volkswagen Group's transition to electrification, and in the European market, many models of the ID series have long ranked among the top three in European electric vehicle sales since their launch. According to Volkswagen Group's 2021 financial report, its electric vehicle sales in Europe far exceeded the sales of fuel vehicles, taking 25% of the European electric vehicle market share.
The performance of the ID series in the European market has brought confidence to Volkswagen, and the Volkswagen Group has set a target of 80,000 to 100,000 vehicles per year for the ID series in the Chinese market in 2021, but beyond the expectations of the Volkswagen Group, the popularity of the ID series in the European market has not continued to the Chinese market. In 2021, Volkswagen will deliver 77,000 electric vehicles in the Chinese market, falling short of the stated target – a result based on more than 2,000 North and South Volkswagen dealers.
In contrast, some of China's new car brands have achieved flat or even surpassed sales in the case of sales stores far less than Volkswagen, not to mention by bydir and other established new energy vehicle companies such as BYD.
At this press conference, the CEO of CARIAD's Chinese subsidiary explained volkswagen group's preference observations for Chinese car consumers: more than 80% of Chinese consumers believe that autonomous driving and intelligent networking are very important.
Under the influence of Tesla and new car-making forces, Chinese cars have appeared "intelligent" transformation trend, traditional OEMs have also launched smart cars through cooperation or self-development, although Volkswagen has been undergoing digital transformation for many years, but the degree of product intelligence is relatively low. PwC directly pointed out in a research report that the ID series is an excellent electric vehicle, but it is not smart enough.
Perhaps recognizing this, in addition to establishing a software research and development subsidiary in China, Volkswagen Group has also recently announced that it will invite Chinese technology companies to participate in the group's global procurement to further promote the strategic transformation of software as the core.
The biggest single-market consumer preference change, in order to adapt to the changes of the times and increase the local layout, this may be the fundamental reason why CARIAD chose to set up its first software subsidiary outside Europe in China.
2030 NEW AUTO Strategy
The establishment of CARIAD is part of the Volkswagen Group's digital transformation and one of the keys to the realization of the "2030 NEW AUTO Strategy".
"Based on the development of software technology, the next fundamental change in the automotive industry is the evolution towards safer, smarter, and ultimately autonomous vehicle products. For the Volkswagen Group, this means that technology research and development, transformation acceleration and scale development will be more important than ever. ”
On July 13, 2021, Herbert Diess, Chairman of the Board of Management of the Volkswagen Group, said at the launch of the "2030 NEW AUTO Strategy".
The business involved in the "2030 NEW AUTO Strategy" is the focus of the Volkswagen Group's development in the next decade, and it is also the only way for the Volkswagen Group to transform into a software-driven mobility service provider. The strategy is roughly summarized as follows: By 2030, the Carbon Footprint of each Vehicle in the Volkswagen Group over the entire life cycle of each vehicle will be reduced by 30% compared to 2018, and the share of pure electric models is expected to rise to 50%. In 2025, the operating return on sales expectations will be raised from 7-8% to 8-9%.
The strategy was developed from the Volkswagen Group's forecast for future changes in the automotive market. Volkswagen Group predicts that the fuel vehicle market will shrink by more than 20% over the next 10 years, with personal mobility accounting for 85% of the total business, and software-related sales expected to reach 1.2 trillion euros.
In order to accelerate digital transformation, the Volkswagen Group will invest 73 billion euros in technology research and development from 2021 to 2025, accounting for 50% of its total investment, and put this figure into the Volkswagen Group's 2021 financial report, accounting for 29% of its annual sales revenue, which shows the Volkswagen Group's firm determination to transform.
At present, although Volkswagen's software technology is slightly inferior in the Chinese auto market, there is a possibility of catching up later. In the Chinese market, Volkswagen has encountered many changes in consumer preferences and has developed a keen sense of market smell.
In 2013, after discovering that SUV models were sought after by Chinese consumers, Volkswagen chose to follow suit to expand its product line of SUV models, announcing that it would release at least five SUV models from 2015 onwards. Volkswagen delivered 805,500 SUV models in 2020, accounting for 29.9% of the brand's total sales, which also shows to some extent that Volkswagen has regained this market share.
Although digital transformation is far more difficult than launching new models, with the Volkswagen Group investing heavily in the development of software platforms, the results can be used to quickly put into mass production of volkswagen group's three joint ventures in China, and with the rapid iteration of new models, Volkswagen may return to the high ground in the Chinese intelligent car market.
An insider of Nezha Automobile told The New Intelligent Driving that the perfect production, research and development, manufacturing and sales system of the traditional main engine factory and the perfect systematization ability can support the development of models, ensure the supply chain capabilities, and the sales of vehicles. This is the part that the new power car companies need to build for a long time.
In addition, traditional OEMs are more likely to have a scale effect. Traditional car companies have users' inherent trust and cognition of the brand, and have greater advantages in the coverage and dissemination of information, and it will be easier to start. When models with a certain degree of intelligent product strength come out, it is easier to gain the favor of consumers, and it is easier to obtain the "data" required for intelligent driving, such as intelligent driving, so as to drive the improvement of product strength and form a positive cycle.
summary
In 2015, the Volkswagen Group abandoned the nine-year-old slogan "Das Auto" because the simple German word for "car" made the Volkswagen Group look conceited – former Volkswagen Group CEO Martin Wendern chose this slogan to believe that only a company like the Volkswagen Group that can concentrate multiple brands and products can become a symbol of the car.
It doesn't matter whether the Volkswagen Group lets go of the conceit, but what can be seen is that after the advent of a new era of the automobile, it is reducing its dependence on traditional businesses and accelerating its turn to "New Auto".
"When I became CEO of Volkswagen five years ago, the group lacked a valuable asset that has not been able to make up for it even now, and that is time." In 2020, Dies wrote in "How We Changed Volkswagen" that he believed Volkswagen was already lagging behind the market in terms of electrification and digitalization.
Perhaps building a software development team in China, which volkswagen group believes is the best way to lead the digital transformation of the car, can help it bridge the technology gap with its competitors and become a mobility service provider.
END
The era of autonomous driving, the new story of on-board cameras
Alternative lidar? The "Heat" and "Pain" of 4D Imaging Millimeter Wave Radar