Volkswagen AG unveiled an investment plan of about 8 billion euro ($9 billion) over the next three to five years, as the car maker takes another step in the electric and connected-car shift.
While rivals such as FiatChrysler and Renault explore a $35 billion deal to bulk up, Volkswagen is taking the opposite approach: slimming down.
The revamped software paltfoms will help the company increase its efficiency
as the world’s biggest auto manufacturer steps up sharing of parts and key technology across 12 automotive brands.
VW employs some 650,000 workers globally. The combined operations will have a workforce of as many as 10,000 developers, Christian Senger, head of digital car and services for the VW car brand, said in a presentation at the Frankfurt auto show.
The manufacturer had earlier outlined a plan to pool about 5,000 digital experts into a single unit that will develop “vw.os,” a uniform software operating system across all new models that will be rolled out starting next year. The software can be used across VW’s vehicle underpinnings for electric, hybrid as well as combustion-engine cars.
Earlier this year, VW started the rollout of the industry’s biggest automotive cloud with strategic partner Microsoft. With the creation of the Car.Software unit, Volkswagen’s in-house tech development will rise to at least 60% by 2025 from less than 10% now, the carmaker said earlier this year.
Accompanying the changes is a 2016 labor pact to cut 30,000 jobs worldwide at the VW brand through voluntary measures like early retirement and attrition. Net headcount is down 6,900 people as of July this year while the carmaker added about 3,400 new jobs in areas like software development of car connectivity, according to an investor presentation. VW says it has achieved 2.5 billion euros in related cost savings to far.
The first vehicle based on vw.os is the electric ID.3 hatchback VW unveiled in Frankfurt this week. Production starts in November and the vehicles will hit showrooms next year. From 2025, all new models will use the system. Currently, as many as 70 control units with operating software from 200 different suppliers need to be integrated into VW brand vehicles
VW is also spending 80 billion euros ($88.55 billion) to buy battery cells and develop electric cars and has struck a broad alliance with Ford to help share development and manufacturing costs.
The world's largest car maker owns the Seat, Skoda, Bentley, Bugatti, Lamborghini, Porsche, Ducati and Audi brands in addition Scania, MAN and VW.
A new emissions clampdown threatens jobs and profits after the European Union forced carmakers to slash carbon dioxide emissions by 37.5% between 2021 and 2030. This comes in addition to a 40% cut in emissions between 2007 and 2021.